Lagos State risks losing investors in table water production to neighbouring Ogun and Oyo States on the back of multiple levies that are suffocating businesses and hitting hard on their bottom-line.
“Our members are poised to relocate to Ogun and Oyo. We have 2,600 members, with each employing at least 20 workers,” Clementina Ativie, president, Association of Table Water Producers of Nigeria (ATAWAP), Lagos State chapter, said in Lagos.
“We want to clearly know what to pay annually and to whom. Government should ensure that one central body collects the taxes in an orderly manner and we will prevail on some of our members who have left to return to Lagos. We have the market here,” Ativie said.
She said the group has complained severally and petitioned the government on the issue of multiplicity of levies imposed by different agencies of the government with overlapping functions and roles but all to no avail.
She said the group was prepared to move out en masse to get a hub in Ogun State, saying that this would cost Lagos State about N1billion in revenue.
Lagos is Nigeria’s economic capital and fifth biggest economy in Africa, hosting thousands of businesses, including multinationals. However, it is hobbled by multiple taxation, which is forcing businesses to consider a more favourable Ogun State. Certainty of taxation is an important canon used by investors to determine how friendly or hostile a business environment is.
One manufacturer told BDSUNDAY that in one day, 21 different tax and levy collectors stormed his factory, making unnecessary demands.
Data generated from the Manufacturers Association of Nigeria (MAN) show that Ogun State got 69.9 percent (N313.62 billion) of total manufacturing investment (N449 billion) in the second half (H1) of 2016.
In the first six months of 2016, N165.61 billion was invested by manufacturers in Nigeria but 33 percent of it (N54.55 billion) went to Ogun, highest among all the zones.
Out of the N180.12 billion invested in the whole of manufacturing and agro-allied industries in Nigeria in the first six months of 2015, N128.3 billion went to Ogun, representing 71.23 percent. The Ikeja and Apapa industrial zones in Laos got only N15.74 billion and N6.98 billion respectively.
In 2014, investors pumped in N691.77 billion, out of which N514.87 billion went to Ogun State, representing 74.42 percent.
Apapa and Ikeja in Lagos contributed N15 billion and N85 billion in investments, which represent 15 percent of the total within the period under review.
“We are happy with Ogun because of incentives from the government. It is also becoming more attractive,” said Frank Udemba Jacobs, president of MAN in 2016.
The Lagos State tate government is, however, seen taking measures to contain the situation. The state ministry of finance is consulting with relevant stakeholders with a view to harmonising taxes and levies collected by different agencies.
Akinyemi Ashade, the state commissioner for finance, said the consultations are borne out of concerned about continued complaints by businesses and that the government has resolved to deal the situation.
“We are here to deliberate and fashion out a way of harmonising the taxes, levies and fees by all revenue generation agencies of government in the state and local government areas,” said Ashade at a recent tax forum organised by the ministry of finance.
Mostly involved in the multiple levies collection from the water producers are the Ministry of the Environment, Lagos Water Regulatory Commission, Lagos Environmental Protection Agency (LASEPA). The government is also to monitor the level of compliance by the local governments with the approved list of levies and taxes collectable by the councils.
Approved list of taxes and levies for the councils include shops and kiosks rates, open market levy, tenement rates (in areas where land use charge does not apply), licensing fee for sale of liquor, slaughter slab license fee (in abattoirs under local government control), marriage, birth and death registration fees. Others are street naming registration fee, motor park levy, parking fee on local government streets or roads (as may be approved by the state government), domestic animal licence fee (excluding poultry farmers), licence fees for bicycles, trucks, canoes, wheelbarrows and charts (other than a mechanically propelled trucks) among others. But agents engaged by the local governments are alleged to always go out of this approved list.
Ativie said most times, the levies and taxes are demanded by the officials with obvious threat to shut factories of members, leading to a lot of undercurrent transactions, with the state government short-changed in the process by the levies collectors.
JOSHUA BASSEY & ODINAKA ANUDU
