The Lagos Chamber of Commerce & Industry (LCCI) has reemphasised that multiple taxation has continued to pose a significant challenge to businesses.
The president of LCCI, Gabriel Idahosa stated this at the LCCI-FIRS Organised Private Sector stakeholders’ engagement with the theme ‘Emerging Tax Matters’.
Idahosa explained that “in recent times, Nigeria’s tax system has undergone significant transformations driven by reforms and policy changes to boost revenue, simplify compliance, and address critical fiscal challenges.
“Under its new leadership, the Federal Inland Revenue Service (FIRS) has set ambitious goals to increase tax collection by 57 per cent, targeting a revenue of N19.4 trillion for 2024. This projection includes N9.96 trillion from oil revenue and N9.45 trillion from non-oil sources, signalling a shift toward non-oil revenue generation to strengthen the economy.
“Despite these efforts, Nigeria’s current tax-to-GDP ratio stands at just 10.86 per cent, far below the African average of about 15 to 20 per cent. The government aims to achieve a tax-to-GDP ratio of 18 per cent within the next three years through the newly introduced tax reforms. Reaching this goal requires a concerted effort from both the public and private sectors, along with targeted reforms aimed at simplifying tax policies and encouraging compliance.”
He added that in July 2023, the Presidential Committee on Fiscal Policy and Tax Reforms was inaugurated with the mandate to overhaul Nigeria’s fiscal and tax policies to enhance revenue collection, reduce multiple taxation and streamline tax administration, saying that several key recommendations have emerged from this Committee, with both immediate and long-term objectives designed to modernise Nigeria’s tax system.
He pointed out that “the private sector is indispensable in Nigeria’s economic development and, by extension, its tax base. However, multiple taxation continues to pose a significant challenge to businesses. The committee has recommended a suspension of certain taxes that disproportionately burden SMEs and the less affluent, a move expected to foster a more conducive environment for business growth and compliance.”
He also said there is also a growing need for collaboration between the private sector and government to ensure that tax policies support business innovation and competitiveness, saying “for instance, recommending tax breaks for wage increases and removing barriers to foreign currency-denominated transactions can create a more robust investment environment.”
He added that “as we move forward in 2024, Nigeria’s fiscal policy is at a critical juncture and for the reforms to succeed, the government must foster trust through transparency and fairness, while businesses and citizens must embrace a culture of tax compliance.”
The executive chairman, Federal Inland Revenue Service (ECFIRS), Dr. Zaach Adedeji said that tax education and public awareness are vital for fostering a culture of tax compliance.
Represented by the acting director, Medium Taxpayers Department, South, Oti Olaniyi stated that “as we explore various tax incentives to stimulate local industries, we must emphasise the need for transparency and effectiveness in the implementation of these incentives.”