State Govs Oppose End to Multiple Taxes

State governments in Nigeria are averse to ending the scourge of multiple taxes which form substantial sources of their internally generated revenues (IGR) despite the damages the taxes are doing to the overall economy, Nigeria CommunicationsWeek has learnt.

Omobola Johnson, minister of Communications Technology said that state governors are reluctant to stop taxes which they see honey pot.

Johnson who was represented by John Ayodele, permanent secretary, Ministry of Communication Technology, at a one-day ‘Focused Industry Roundtable’ organised by the Universal Service Provision Fund (USPF) in Lagos said “Going by provisions of the Constitution of the Federal Republic of Nigeria, States have a right to legislate on how they generate funds. But we’re looking at what is best for the overall good of the country”.

The minister added however that the National Executive Council (NEC), which comprises the President and his entire cabinet and state governors, has set up a five-man Committee headed by Ibrahim Hassan Dankwambo, Gombe State governor to review Nigeria’s tax regime with a view to ending the multiple tax regime.

The Dankwmbo Committee was set up following an earlier report on the vexed issued submitted to NEC last April.

The Committee’s terms of reference includes seeking solutions and ways of sharing taxable funds across the three tiers of governments as an appeasement to the governors. He is expected to turn in his Committee report before December 2013.

Both local and foreign investors see multiple tax regimes as much vexing as poor power supply.

Several industry groups have previously called on the government to bring the unwholesome practice to a stop.

 Jackson Iniobong, chairman of Cross River and Akwa Ibom states Manufacturers Association (MAN), said it inhibits competiveness.

Meanwhile, the USPF said it is set to build 1000 telecom base stations (BTS) and lay 3000 kilometres of fibre networks annually across the country with a view to increasing infrastructure capacity.

Maikano Abdullahi, secretary of the Fund said the project would be private sector driven and implemented with the USPF providing financial assistance to will investors.

He noted that previous efforts at increasing infrastructure capacity failed due to adoption of poor implementation strategy. “The big operators were not attracted to the scheme because it was not financially viable for them to participate. Every investor wants to put his money in a project that would give reasonable returns on investment. But what we are proposing is open to every operator and would be enticing enough for all to participate,” said Abdullahi.

The USPF project also includes funding broadband connectivity to all universities and teaching hospitals in a bid to lift their profile. “We aim to connect all federal and state universities with dedicated fibre; this also includes teaching hospitals and their medical colleges. We also believe that universities would be able to share bandwidth infrastructure. We already are in the process of connecting 17 universities. Again, the USPF does not handle projects, but we are partnering with private investors while facilitating access to funding,” said Abdullahi.