A tax expert and partner with Price water Cooper (PwC), Taiwo Oyedele, has said the current tax regime in Nigeria does not encourage informal businesses aspiring to formalize their operations.
Oyedele spoke during a panel discussion at the Special Policy Dialogue Colloquium, entitled “Policy Change – The Enabler of Sustainable Growth”, organized by the Financial Derivatives Company in Lagos on Monday.
He said: “Under the AfCFTA, we will need to formalize so many businesses because if you are not formalized, you can’t play in Africa.
“In Nigeria today, if you have your business not registered with the Corporate Affairs Commission (CAC) and you want to be fully tax compliant, the maximum income tax you pay is about 19 percent. If you make the mistake of formalizing it and you register with the CAC, your tax goes up to 42 percent. How would that make sense for anybody to do?”
He said the country needs a mindset change to help drive policy in the right direction.
“The biggest things we have to do to make the most impact are not the most difficult. They are around policies. The road, the rails and the ports will take time, but policies can give you result in a few months,” he added.
He charged the nation’s government to carry out a specific assessment, saying “most of the things we need to do are things that are good for us anyway, with or without the free trade area. They are good for human beings, good for businesses and the economy.”
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