Home News ACCI commends tax harmonization plans in FCT

ACCI commends tax harmonization plans in FCT

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The Abuja Chamber of Commerce and Industry (ACCI) said it welcomed the declaration by the Minister of Federal Capital Territory Administration, Alhaji Muhammad Bello, on plans to harmonise tax policy within the territory to ease the burden of multiple taxation on SMEs.

The President of ACCI, Alhaji Al-Mujtaba Abubakar made the commendation in a statement he personally signed and made available by the media officer, Latifaat Opoola in Abuja on Wednesday.

The ACCI President said in the statement, “We appreciate the Minister’s acknowledgement of the challenges faced by businesses within the territory due to series of levies, charges and taxes from Federal, FCTA and Area Council Administration.

“Multiple taxation within the FCT and the larger national economy has imposed crippling consequences on businesses. The fallout has been many failed businesses, rising level of inflation, the non-thriving of existing ones and the lack of capacity to engage many unemployed youth.

“We want to note that lower taxes when also harmonised enhance prosperity of the economy. As an SME nation, expanding the base and health of the business sector is a smart choice to exit recession and adjust to the pandemic economic disruption.

“It is thus gratifying to note that FCTA is taking the lead to ease the tax burden on SMEs. Such an action will have multiplier effect on the FCT economy, leading to more job creation and reduction of poverty rate.

“The path of lower taxation to speed up the growth of the economy is a tested tool that has helped many economies. Japan, Taiwan, South Korea, Singapore, old Hong Kong, Russia, Australia, and Israel are some of the non-western countries that have, in the last 100 years, managed to move their countries from “developing” to “developed” economies through a combination of lower tax rate and high tax base.

The statement also noted that ACCI “is of the view that governments at all level should focus on increasing the tax base rather than the tax rate”.

According to official data, as a percentage of GDP, Nigeria taxes represent 6.1%, one of the lowest in the world. The tax-to-GDP ratio in South Africa was 29%, Ghana 18%, Egypt 15% and Kenya 18%, says the OECD in a 2019 report.

“More businesses and citizens should be brought under the tax regime albeit with reduced and well harmonised rates that is devoid of multiple taxation.

“We want to note that the tax policy reform being contemplated by the FCT administration is of direct significance and interest to us at the ACCI. Our members are negatively impacted by multiple taxation.

“The economy of the Territory is also stunted by this crippling tax regime. It is therefore our pleasure to identify and work with the FCTA to accomplish these noble objectives.

“We consequently call on the FCTA to engage critical stakeholders in this very laudable reform. This will ensure that all relevant inputs are integrated before the finalisation of the reform plan. The ACCI is ready to provide interactive policy reform platform in support of the process.

“As a leading business Chamber in the FCT and a Grade A Chamber in Nigeria, the Abuja Chamber of Commerce and Industry is looking forward to engaging and working together with government at all levels as well as other social partners, in delivering the vision of a successful and prosperous Nigeria”, Alhaji Abubakar further noted. (theconclaveng)

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