Multiple taxes worry women entrepreneurs

Mrs Latifat Balogun is the chief executive officer (CEO) of Hatlab Place, Abuja.  In the past months, she has paid different taxes to different government organs. She narrates her experience. “The Federal Capital Territory is collecting tax; Abuja Municipal Area Council (AMAC) is charging another. Sometimes, the FCT will call it business premises charges, while […]

Mrs Latifat Balogun is the chief executive officer (CEO) of Hatlab Place, Abuja.  In the past months, she has paid different taxes to different government organs. She narrates her experience.

“The Federal Capital Territory is collecting tax; Abuja Municipal Area Council (AMAC) is charging another. Sometimes, the FCT will call it business premises charges, while AMAC will call it petty licensing for businesses and shops. 

“We also have things like tenement rates. This has increased our operational expenses,” Balogun lamented.

She is not alone expressing this concern. Mrs Omololami Ajani, the Managing Director of Wood et al Limited, has had to pay multiple taxes as well.

“For instance, if I have to supply goods/furniture in Kwali Area Council, I have to get their license which is valid for a year even if it is a one-day delivery. If the truck goes to another area council, it has to get their documentation as well. If we don’t do this and they arrest our drivers, we have to pay a fine. 

“A lot of them are unnecessary and unexpected taxes. This is costing us as business owners,” she explained. 

According to the just released World Bank’s Doing Business Report 2018, Nigeria ranks 145 of 190 countries from 181 in 2016 with tax payment burden. 

Under the current Nigerian laws, taxation is enforced by the three tiers of government: federal, state and local governments. These are enforced and guided through various laws and agencies which include the Income Tax Management Act, Companies Income Tax decree, Joint Tax Board as well as a few others. All these were created with the purpose of ensuring strict adherence to tax payment and to discourage the issue of tax evasion. 

However, Nigerians still decry the amount and number of taxes levied on them and their businesses.

In a study titled ‘Tax Compliance Costs of Small and Medium Scale Enterprises in Nigeria’ by Emmanuel Eragbhe and Kennedy Modugo (2014), published in the international Journal of Accounting and Taxation, they noted that Nigerian SMEs bear considerably high tax compliance cost, which stifles their innovation and growth. 

The study also reveals that on the average, “The SMEs overall Tax Compliance Cost (TCC) in Nigeria is about N108,594 per annum and the values range from N14,500 to N725,000 per annum. Smaller SMEs were found to have an average TCC of N219,601 per annum as against N123,047 TCC per annum for larger SMEs, which implies the existence of tax compliance costs regression in Nigeria.”

An official of the FCTA who does not want his name in print says what the FCTA charges are fees for registration of business premises but now that the FCT Inland Revenue Service Board is constituted, then it will handle all issues of taxation.

 The Chief Revenue Officer of Abuja Municipal Area Council (AMAC), Chief Danlami Awaje, however, said there is no multi-taxation in the area council. 

He said the council’s taxes were collected in relation to the provisions of its bye laws. 

 “Generally whatever business you are doing as far as it is in AMAC, aside the taxes paid to regulatory agencies for operating a business in the domain of AMAC, you have a duty to pay operational permit regardless of the business,” Awaje said. 

“Every charge we bring to any organisation is backed by our bye-law and any business owner that has issues with us, when he comes here we clarify the issue. If you operate your business within AMAC, you have a duty to pay us taxes for that. 

He said harmonisation of taxes was not easy because the demands were not coming from the same agencies. 

But business owners like Balogun said government should harmonise taxes. “We are saying the governments should look at it and harmonise all their taxes. Let them emulate what Kaduna State is doing. Kaduna State has a single document stating all the taxes a business owner will pay in a year.  

“So, let them harmonise the taxes and lets know what and what we are paying for,” Balogun explained.

She also has another plea.  “The staff they send to enforce these laws should have a human face and not harass business owners, shutting their businesses at will. Also, we don’t what to deal with agents we want to deal directly with government,” she added.