Despite President Bola Tinubu's tax reform promises aimed at providing relief, evidence shows that Nigerian businesses continue to grapple with multiple levies imposed by various tiers of government, undermining the intended benefits and increasing operational costs.
Reform Promises vs. Reality
President Tinubu had assured the business community that his administration's tax reforms would streamline the tax system and reduce the burden on enterprises. However, a recent report by Nairametrics reveals that businesses are still subjected to a complex web of taxes, levies, and charges from federal, state, and local governments.
The report highlights that despite the government's commitment to ease doing business, many companies are paying over 50 different types of taxes and levies, ranging from development levies to market fees, which cumulatively erode profit margins and stifle growth.
Impact on Business Operations
Business owners interviewed by Nairametrics expressed frustration over the lack of tangible relief. One manufacturer noted that his company pays at least 25 separate levies annually, including waste disposal fees, signboard charges, and environmental levies, in addition to company income tax and VAT.
The multiplicity of taxes has forced some businesses to consider relocating or scaling down operations, as compliance costs become prohibitive. This trend poses a significant risk to job creation and economic diversification, which are central to the administration's economic agenda.
Calls for Coordinated Tax Reform
Experts argue that without a coordinated approach to tax reform, the government's efforts will remain ineffective. They recommend harmonizing tax collection across different government levels and simplifying the tax code to reduce compliance burdens.
According to the report, the government has yet to address the fundamental issue of overlapping tax jurisdictions, which leads to double taxation and administrative inefficiencies. Until these structural problems are resolved, businesses will continue to suffer, and the promised relief will remain elusive.
The report concludes that while the intention behind the tax reforms is commendable, the implementation has not yet translated into real benefits for businesses. Stakeholders are calling for urgent action to align policy with practice, ensuring that the reform actually delivers the promised relief to the private sector.
