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Multiple taxation, overregulation, government bureaucracy and unnecessary taxes are the major reasons businesses in Nigeria are suffering.
This was the submission of a panel of experts at a policy dialogue meeting on government regulation of the private sector, with a special focus on tobacco industry, titled: Moving from regulation to policy action – the challenge, organised by the Initiative for Public Policy and Analysis in Lagos, Tuesday.
Decrying the nation’s business environment low ranking in various global rankings, two of which are unenviable 169th position out of the 170 countries sampled in the World Bank ‘Ease of Doing Business’ index and the Economic Competitiveness Index 124 of 140, among others, the experts pointed out that Nigeria must begin to stop paying lip service about diversification of the economy and formulate policies that would help improve ease of doing business.
One of the panellists, Vincent Nwani, director of Research and Advocacy Lagos Chamber of Commerce and Industry, noted that multiplicity of taxes, security, and contract sanctity were key issues affecting the diversification of Nigeria economy.
Read Also: Multiple taxation affects economic growth – expert
“On an estimate, companies suffer a loss of up to 25% due to regulatory infractions in Nigeria, hence the need to review the tax structure and streamline the number of taxes/levies and their rates with a possibility of having a One-Stop-Shop model,” he said.
For Damilola Olajide, a health economist, said the overly regulated tobacco industry was depriving manufacturers of their social responsibility to the society, which include funding cancer research in health institutions or smoking cessation programmes.
Speaking on the topic balancing regulations and product health hazards, he, therefore, called on the federal government to pay attention to reducing inequalities in smoking-related diseases, especially targeting the poor segments where prevalence is relatively high rather than burden the tobacco companies with unnecessary tax and levies.
Despite the health serious concerns often raised by health experts and civil society groups about tobacco
due to health consequences for consumers, Olajide noted that the tobacco companies have a significant role to play just like every other industry in the manufacturing sector, in the nation’s economic recovery and growth.
“Tobacco being a lifestyle product, even with incremental tax hikes on the product may do very little or nothing to dissuade people from smoking , imposition of a 150 percent hike in the tax paid by tobacco companies while imports attract only 60 percent implies that imported tobacco will be more affordable than those produced in Nigeria, there will be an immediate impact on government revenue, and the longer-term impact of factory closure and job losses will make an already bad situation worse.”
He added that it made no sense whatsoever to encourage a policy that would make imports cheaper than their local substitutes, no matter the product, be it rice, sugar, or tobacco. The revenue generated from tax, if effectively use could help in the implementation of more interventions such as smoking national cessation services.
“Tobacco use and alcohol consumption are complementary. These complementary interventions are required for effective regulation, imposing tax on tobacco will only increase stress on people already facing financial hardship; that could lead to more people smoking as a stress relief mechanism,”
For Jiti Ogunye another panellist called on the private sector to develop an interest in the lawmaking process in Nigeria.
“We cant leave everything to the government and policy makers, businessmen in the country must begin to play an important role in supporting bills that will help promote the ease of doing business in Nigeria.”
Also speaking Chairman of the House of Committee on Information Odebunmi Olusegun Dokun assures the private sector that all hands are on deck to ensure an enabling environment for businesses in Nigeria.
Represented by his special assistant Al Marruf Ajibolu, Dokun, he said the house is working relentlessly to realise Nigeria’s potential and to set a right environment for business to succeed, adding the results have been encouraging in substantial improvement in key macro-economic indicators like GDP growth, inflation, fiscal deficit, as well as foreign investments.
