By Onome Amuge
Kawai Technologies, a member organisation of the Lagos Chamber of Commerce and Industry (LCCI) has called for a reformation of Nigeria’s complex tax system and high burden of taxation on businesses and industries, particularly the withholding tax system.
The full service supply-chain, procurement and logistics company, stated this during a recent meeting with a delegation from the LCCI, led by Michael Olawale-Cole, president of the 134-year old representative business organisation.
During discussions centred around the current state of the economy, challenges faced by businesses were raised, among which is the withholding tax system and its adverse impact on the performance of Nigerian businesses.
Withholding Tax in Nigeria is a form of advance payment of income tax. It is defined as a payment on account of the ultimate income tax liability of the taxpayer or company.
Akinbo Akin-Olugbade, the managing director of Kawai Technologies, said withholding taxes can significantly impact cash flows of businesses, as they reduce the amount of cash available, leading to potential liquidity issues, making it difficult for businesses to manage their day-to-day operations, meet their financial obligations and invest in growth opportunities.
Akin-Olugbade also noted that the complexity of the withholding tax system and the inability to recover excess withholding taxes or utilise them to offset other taxes beyond corporate income taxes can add additional administrative and compliance burdens on businesses, which can further impact their cash flows.
“This system as it currently stands foreshadows the opportunity for Nigeria to grow its own Amazon, Walmart and other billion-dollar giants, as pricing is raised to offset the impact of these taxes, thus reducing competitiveness of Nigerian companies on the international stage,” the MD said.
The discussions also identified the need for corporate research and development, and the importance of accurate economic forecasting for businesses to drive economic growth and promote innovation.
On his part, Olawale-Cole reiterated the role of the LCCI to promote and protect the interests of its members and the business community in Lagos.
The LCCI president listed the benefits of being a member of the organisation to include:
-Access to networking opportunities with other businesses, government officials, and industry experts;
-Information on business opportunities, market trends, and government policies that impact businesses in Nigeria.
-Access to training and capacity building programmes that enhance their skills and knowledge, helping them to grow their businesses and compete effectively in the market.
