Dr Muda Yusuf, Chief Executive Officer, Center for Promotion of Private Enterprise (CPPE), Lagos, has called on the Federal Government to cut down to the barest minimum, Nigeria’s tax rate of 34 per cent as it is the highest in the world.
He stated this in his reaction to the current debate on tax matters.
Dr Yusf is of the opinion that if the current rate subsists, it will serve as a disincentive to honest businessmen and stifle investments in the country.
He said, “An economy that desires job creation, economic inclusion, investments and poverty reduction, should have an accommodating tax regime for investors”.
According to him, corporate tax in Nigeria is 30 per cent, but effective corporate tax is much more than that. There is a Tertiary Education Tax of 2.5 per cent of profit; NITDA levy of 1per cent of profit; NASENI levy of 0.25 per cent of profit; Police Trust Fund levy of 0.005 per cent, which brings effective corporate tax to about 34 per cent. This rate is one of the highest in the world, compared with Africa Corporate Tax at 27.6 per cent; the Asian average at 19.52 per cent; European Union at 19.74 per cent and the global average is 23.37 per cent.
Dr Muda Yusuf, however, advised that the Federal Government should place much emphasis on direct taxation in order to incentivise investment in tune with the nation’s National Tax Policy.
