Why Nigeria Cannot Make Money From Tax- Oyedele, PwC Nigeria

Despite seeming desperation by the Federal Government to rake in so much from taxing individuals and corporate bodies within its boundaries, Taiwo Oyedele, Head of Tax and Corporate Services, PwC Nigeria, said the country “cannot make money from tax.”
This, he said, is notwithstanding the fact that the country is today having one of the highest company income tax rates globally, which, in itself, is a disincentive for business growth.

Speaking as part of discussants at the Finance Correspondents Association of Nigeria (FICAN) annual workshop in Lagos on Saturday, with the theme “Unlocking Opportunities in Nigeria’s Non-Oil Sector,” Oyedele assured that he is not laying a curse on the country.
He urged the authorities to change around taxation insisting that the current approach only makes compliance difficult.
“Our thinking around taxation is completely upside down as a country. Nigeria does not seem to understand that you need to be prosperous so that you can pay tax. So, tax does not just fall from heaven.

“As a government, I should help you make money so that you can pay me tax… It’s just common sense. Nigeria has a tax system that does not allow businesses to thrive, whether you are small or big,” he added.

The reason why Nigeria cannot make all of the money it requires to run its budget from tax, he continued, is not farfetched, and only arises from the government “continues to beat up the people at the bottom of the ladder.”
Unfortunately, he continued, such lowly people “cannot give you (government) what they don’t have.”
“In societies where they think things logically,” he continued, the focus is “on the top 1% who are the rich and big companies and they will get the desired tax result,” he said.

“We pay Company Income Tax, CIT 30%, education tax, 2%, whatever is left; we pay withholding tax of 10%. If you add them together, it is more than 40% already. If you now make a mistake of having a group and you say it’s a holding company, another 30%. Who does that?!”
Speaking further, he said: “When you start a business today, there is something called commencement rule. It is supposed to punish you during commencement so that you pay tax twice. It does not make sense.”
To address this challenge, the tax expert advised operators in the private sector to focus on the demand for the removal of some of these disincentives that impact their business operations negatively.

“What I keep saying to government is that I can insist that I have a pot that is this small and I say I must get 60% of this pot by all means. Or I allow this pot to be big enough and then get 10% of it. The government must remove tax disincentives.
“One thing I am asking the business community is to stop asking the government for incentives because they will think they are doing you a favour. Ask them to remove the disincentives that are not allowing us to do business,” he said.

https://investdata.com.ng/2019/09/why-nigeria-cannot-make-money-from-tax-oyedele-pwc-nigeria/#more