The Stranglehold of Multiple Taxation: A Threat to Nigerian Businesses and Employment —NDIFREKE IKPE OBONG

The Stranglehold of Multiple Taxation: A Threat to Nigerian Businesses and Employment —NDIFREKE IKPE OBONG (Snippsy)

Introduction

In Nigeria, the issue of multiple taxation has reached a boiling point, threatening the very existence of businesses and sabotaging employment prospects. The burden of multiple taxes is crippling businesses, forcing them to downsize, or, in some tragic cases, cease operations altogether. This financial suffocation is a stark injustice to businesses, hindering their growth, and ultimately sabotaging employment opportunities in the country. The time has come for a digital tax collection system, one that abolishes the outdated, unjust practices that see “area boys” or “thugs” making arbitrary demands for taxes, even when these levies have already been duly paid to multiple tiers of government and various agencies.

The Injustice of Multiple Taxation

Businesses in Nigeria are grappling with a deeply unjust system of taxation, which is pushing them to the brink. The multiple taxations imposed by federal, state, and local governments, along with various agencies, not only deter investment but also stifle economic growth. This unjust system has grave consequences for both established enterprises and budding startups.

• Strangling Businesses: Multiple taxation strangles businesses, forcing them to allocate a significant portion of their earnings to a myriad of taxes. The resulting financial burden affects their ability to expand, innovate, and hire more employees.
• Forced Downsizing: With excessive taxation, many companies find themselves unable to sustain their current workforce. This leads to forced downsizing, increasing the unemployment rate and contributing to the economic hardship faced by many Nigerian families.
• Stifled Entrepreneurship: For those considering starting a business, the complex and punitive tax system acts as a deterrent. The fear of multiple taxation discourages entrepreneurial initiatives, thus stunting economic progress.
• Arbitrary Collection: Adding to the injustice is the arbitrary collection of taxes by “area boys” or self-proclaimed tax collectors, who often demand payments even when legitimate taxes have been duly paid to government agencies. This practice is not only illegal but also a threat to business continuity.
• Lack of Transparency: The lack of transparency in tax collection is a significant issue. Businesses are left in the dark regarding the proper allocation of their tax payments, fostering mistrust in the system.

Digital Tax Collection: A Way Forward

To address this grave injustice and to put Nigeria back on track towards economic prosperity, a comprehensive overhaul of the tax collection system is essential. Transitioning to a digital tax collection system offers several benefits:

• Efficiency: Digital tax collection streamlines the entire process, making it more efficient and transparent. It reduces the likelihood of corruption and arbitrary collections.
• Eliminating Duplicate Taxes: With a centralized digital system, the issue of businesses paying the same tax to multiple tiers of government is eliminated. This ensures that businesses only pay their dues once.
• Accessibility: A digital system provides businesses with easy access to their tax records, ensuring transparency and accountability. This reduces the potential for underhanded dealings.
• Reduced Compliance Costs: Businesses can save substantial amounts of money on compliance costs. They will no longer need to allocate resources to navigate the complexities of the current tax collection system.
• Promotion of Entrepreneurship: A fair, efficient, and transparent tax system will encourage entrepreneurship, stimulate economic growth, and create new employment opportunities.

Nigeria at a Crossroads

Nigerians must recognize that the current system of multiple taxation is a grave injustice, crippling businesses and stifling economic growth. Accepting this hardship as the norm is not the answer. While our counterparts in other parts of the world continue to progress, Nigeria remains stagnant, held back by outdated and unfair policies.

It is crucial for the government to acknowledge the economic toll of multiple taxation and the significant impact on employment. The implementation of a digital tax collection system is not merely a suggestion; it is an urgent necessity for Nigeria’s economic survival and prosperity.

In Conclusion

The stranglehold of multiple taxation in Nigeria is a profound injustice that is sabotaging businesses, employment, and economic growth. The transition to a digital tax collection system is not just a step forward; it is a leap towards a brighter future. Nigeria must join the global community in embracing modern tax collection practices to stimulate economic growth, promote entrepreneurship, and create a fairer, more prosperous society. The time for change is now.

Ndifreke Ikpe Obong (Snippsy)