Fostering Private Sector Participation In Policy Making Through Taxation Reform

Fostering Private Sector Participation In Policy Making Through Taxation Reform
06 Sep

The growth of the Nigerian economy has, over the years, remained stunted as a result of many factors, one of which is the challenge faced by businesses through un-coordinated tax administration leading to what is referred to, in common parlance, as multiple taxation. Currently, most businesses in Nigeria consider the tax environment as unfriendly and a disincentive to businesses. It engenders loss of man-hours to both the government and businesses and increases the cost of doing business in Nigeria; some businesses including manufacturing companies in Nigeria have shut down production and in some cases, have relocated their factories to other West African countries which were considered to be more investment friendly.

By 1996, some military Governments introduced the use of Tax consultants in tax administration. This increased the number of taxes and levies collected by the three tiers of government. These astronomical increases also led to sporadic reaction by the business community in the country and prompted the Federal Government to direct the Joint Tax Board to review and harmonize tax administration in Nigeria.

As a result of the persistence of this problem , the Manufacturers Association of Nigeria (MAN) in collaboration with the Centre for International Private Enterprise (CIPE) USA, carried out a study on Fostering Private Sector Participation in Policy Making through Taxation Reform across three pilot states (Lagos, Ogun and Oyo) in Nigeria. 1,298 questionnaires were administered, 1,014 were retrieved and analysed, while 17 Chief Executive Officers of selected companies were directly interviewed. The study was aimed at understanding the nature of multiple taxation and its effects on businesses. The result would form the basis for appropriate advocacy programmes intended to influence policy formulation processes of government with a view to reducing the tax burden and make Nigerian businesses more competitive.

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