Tax harmonisation in Ogun

CONCERNED with boosting ease of doing business in Ogun State, Governor Ibikunle Amosun is set to remove vestiges of disincentives to business development through an executive bill on tax harmonisation. Multiple taxation is a major headache of big businesses and small and medium scale enterprises (SMSEs). For the latter, multiple levies may sound the death knell or put the enterprise on tenterhooks for years. Multiple taxation adds to the cost doing business, which is transferred to the consumers. It impacts on profitability and ultimately leads to job losses in the name of right-sizing or down-sizing in order for the company to stay afloat. For developing economies such as Nigeria, the effects of multiple taxation are much worse. Unfortunately, over 30 per cent of revenue from these levies end in private pockets, being illegally collected by touts in and out of uniform and is not available to government to improve infrastructure for the general good. Therefore, it is commendable that the Ogun State government has taken the bull by the horns, starting with the recent launch of Haulage Harmonization Tickets and the executive bill titled, “The Bill on Harmonised Revenue and Other Charges Law of Ogun State, 2018,” which is now at the Committee Stage.

According to the state government, the new initiative will, among others, “streamline the process of toll collection and ease of doing business in the state, end illegal and multiple taxation, reduce time wasting and unwarranted embarrassment by touts, reduce operational costs and leakages, enhance transparency and accountability and increase the IGR of the state,among others.” At the Thursday, 12th July, 2018 Breakfast meeting Governor Ibikunle Amosun held with industrialists and prospective investors in the state, the efforts of the state government towards ensuring Ogun remains the investors’ destination of choice were highlighted. The Taxes and Levies Harmonisation Bill now before the House of Assembly will no doubt provide the legal framework for the achievement of the dream of the state government towards removing all barriers to business development.

As a testament to the economic achievements recorded by the present administration and its continuous drive towards industrialization, Ogun State had from the last position in 2010 World Bank Doing Business in Nigeria report emerged in 2014 to be among the top five in the report of the global financial institution. The remarks of the World Bank remain evergreen and soul-lifting:

“Ogun improved on three of the four Doing Business indicators benchmarked. The construction permitting system was radically overhauled, with the state government authorities decentralising the approval system and a new committee monitoring delays. Building permit applications and payments can now be made simultaneously in district offices. Private professionals issue environmental-impact assessments in accordance with the conditions and templates set out in a framework agreement. The certificate of completion is issued on the spot, immediately following the final inspection.”

To begin a business in Ogun State, according to the World Bank, “Entrepreneurs no longer need to travel to Ibadan or Lagos, thanks to the Federal Inland Revenue Service’s new stamp duty office in Abeokuta. In addition, the state Ministry of Commerce and Industry abolished the requirement for a physical inspection of the business premises – today, a proof of company address, such as a utility bill, is sufficient. A business premises permit is issued on the spot upon payment of the fee. Finally, Ogun’s Bureau of Lands digitalised property records with the aim of enabling electronic title searches and making property registration more efficient.” The Amosun government has clearly lifted Ogun from economic obscurity to popularity. From the data collated by the Manufacturing Association of Nigeria (MAN), 75 per cent of Foreign Direct Investment (FDI) into the sector came to Ogun State between 2014 and 2016. This is no mean achievement considering the trajectory of the state in industrial development.

Today, there is hardly any industry worthy of note in Nigeria that is not in Ogun State. Ogun has become the industrial hub of Nigeria due to the friendly business environment created by the present government. There’s hardly any week that Governor Amosun won’t be invited to inaugurate one multi-billion naira company or the other with potential for thousands of direct and indirect jobs being a source of joy for the state’s helmsman.  It is not surprising, therefore, that Ogun has made phenomenon progress in its Internally Generated Revenue in recent years, moving from an average of N750 per month by the previous government to about N6.5 billion monthly within the six years of the current administration. Indeed, the National Bureau of Statistics (NBS) has consistently rated Ogun in recent years as only next to Lagos State in terms of IGR.  According to BusinessDay, “Lagos and Ogun states are fast moving away from other states in the country in financial capacity, following their ability to generate over 60 per cent of their revenue internally… This means that in the event of a failure or shortfall in allocation from the Federation Account, the two states can internally generate at least N63 out of every N100 needed monthly.”

The One-Stop-Shop Investment Centre created by the Ibikunle Amosun administration has further broken the back of delay in business transactions to the delight of prospective and new investors. With the ongoing massive investments in road and power infrastructures, there is no doubt that the current harmonisation policy on haulage revenue and the Taxes  and Levies Harmonisation Bill, when passed into law by the House of Assembly, will further enhance the ease of doing business in the state and contribute further to the socio-economic well-being of residents.

• Soyombo writes in from Abeokuta, Ogun State, via [email protected]