Elumelu: Multiple taxation kills 95% of small businesses in Nigeria
Tony Elumelu, Chairman of the proprietary investment company, Heirs Holdings, says multiple taxations and levies kill 95 percent of small and medium scale businesses in Nigeria.
Elumelu made this statement on Thursday while speaking at the Lagos Business School Alumni Association 2017 Alumni Day in Lagos.
He said five percent of the small businesses that survived after one year was a big disincentive to the nation in terms of employment creation.
The entrepreneur said multiple business regulations, multiple taxation and inconsistent government policies affect SMEs’ competitiveness and their ability to attract capital in their investment climate.
He said despite the multiple taxations, Nigeria remains the lowest in the world with 10 percent tax contribution to gross domestic product (GDP).
“It seems we have a big problem, because, with high taxation and multiple levies, it is expected we should have very high tax revenue,’’ he said.
He said the government should find out the reason for the discrepancy between desired growth and development.
He urged the government to create a more conducive environment that would encourage survival of SMEs in order to reduce the unemployment rate.
“Government doesn’t create jobs, it is the right enabling environment for SMEs that create jobs.”
He urged the government to streamline all taxation and levies across the three tiers of government to avoid the collapse of SMEs.
President, Lagos Business School Alumni Association (LBSAA) and Managing Director of Standard Chartered Bank, Mrs Bola Adesola, commended Mr. Elumelu’s passion for the growth of the business environment in Nigeria.
“Many people are not aware but Tony Elumelu started the Competitive Council because he was concerned about the conditions of business in Nigeria. I still recall when he called me and invited me to one of the early meetings. At that time the National Competitiveness Council of Nigeria (NCCN) was actually birthed by an idea from Tony Elumelu. It eventually became an established council chaired by Mr Segun Aganga, the then Minister of Trade and Investment with Mr Elumelu and Aliko Dangote as the co-chairs and a secretariat was set up,” she said.
Taiwo Oyedele, head of tax and corporate advisory services, PwC Nigeria, called for the amendment of the constitution to ensure coordination among the three tiers of government and their agencies.
Oyedele said the multiplicity of government agencies with the same work function was becoming worrisome.
“You don’t need tax incentives for people to do business, we just need to remove the disincentives,” he said.