The Manufacturers Association of Nigeria (MAN) has stated that multiple taxation is affecting the operations of manufacturers in the country and their participation in the African Continental Free Trade Area (AfCFTA) agreement.
The Director General, MAN, Segun Ajayi-Kadir, said this yesterday at the closing of the 26th Annual Tax Conference of the Chartered Institute of Taxation of Nigeria (CITN), with the theme: ‘Sustainable Tax Culture and Economic Roadmap for Nation Building’.
He stated that the increased taxation for Internally Generated Revenue (IGRs) has led to heavier tax burdens than anticipated, impacting manufacturers’ profitability and competitiveness.
He said, “Duplication of taxes increases production costs and final prices of goods and services, eroding profit margins and hindering investment incentives.
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“MAN’s survey conducted in 2023 reveals numerous taxes with overlapping effects, adding complexity and burden to businesses. Sales tax and Value Added Tax (VAT), mobile advertising charges, education levies, tenement rates, land use charges, and parking fees contribute to financial burdens for manufacturers.
“Multiple taxation discourages investment, stifles entrepreneurship, and hampers economic growth, affecting SMIs disproportionately. The Nigerian manufacturers’ competitiveness in the global trading environment has declined due to the multitude of taxes. This tax burden may hinder the sector from maximising potential gains in the AfCFTA.”
Also, the Chief Executive Officer of Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, added that manufacturers in Nigeria were overburdened with high cost of operation.
He noted that there is an urgent need for the government to ensure a more sustainable environment for businesses, especially the manufacturers who, according to him, were grappling with huge energy costs, huge logistics costs, supply chain challenges, forex volatility, and customs duty exchanges.
On his part, President of the CITN, Mr Samuel Agbeluyi, who commended the federal government for its effort to reform the country’s tax system, also noted that an effective tax system was critical towards addressing the socio-economic challenges in the country.
He said there is a need for the government to consider the economic situation in the country before embarking on any tax policy.
He said with the government relying heavily on non-oil revenue to fund the 2024 budget, it was important to build a sustainable tax culture capable of improving government tax revenue significantly.
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