Development levy, business premises levy, radio and television license, fumigation license, environment protection levy, just to name a few, are some of the government-led costs of doing business in Nigeria. Tax is the elephant in the market place that we groan about and, as a people, we really need to be ingenious about. We/our administrators need to watch taxes closely as the patients are almost running the asylum and chasing innovation and props to the economy out of town.
Remember the story of the young man that job-hunted for over 3 years until his family put capital together with which he started a small business? Operatives from different ministries, departments and agencies of government (MDAs) swooped in on his shop the same day he launched and he committed to rather die there than have the MDAs fleece him. He really didn’t have a dime to spare anyway so it was either the hard way or the high way with the tax men.
Now, the taxes in consideration include all sorts of levies imposed by MDAs and different groups prior, during and after the commencement of your business. These taxes are usually christened all sorts of names but the end is always internally generated revenue (IGR) and spare change for the boys in the ‘hood.
Your ordeal with these groups is relative to the location or market you find yourself, but the drama starts once you put on the toga of a business in the market place.
Drowon is an Internet services provider. Drowon’s primary source of power is diesel generators, otherwise, its business is kaput because of the nature of public power supply. Drowon has literally adopted the public grid as its backup power source.
Due to the nature and location of its transmission equipment, Drowon is also compelled to employ man guards and smart security services at huge costs. Despite these, its losses per month at most of these locations are phenomenal. The police? Each report of vandalism, theft or loss is an additional cost to the losses already suffered, but Drowon is compelled to go grudgingly through the routine of police reports for insurance purposes.
Drowon has engaged quite a number of local staff, thus it runs quite a reasonable monthly overhead. It is a cross-cultural, multi-ethnic entity, making conscious efforts to be as balanced as possible.
Despite all the shortfalls, drawbacks, business challenges et al, Drowon is still saddled with additional expense responsibilities to MDAs, communities, youth and various gangs at their different locations. The spurious demands for taxes and levies are endless and in various names from countless MDAs and groups. It’s a miracle that Drowon is still in operation when despite all the leakages and lean turnover, its customers still demand competitive lower rates.
Dajim Limited was incorporated a few years ago as an SPV but due to circumstances beyond its control, the purpose for which it was set up is yet to happen. About 4 years down the road Dajim Limited is quietly and calmly slammed with a tax bill of N300M. It is now spending unearned resources to resolve this phantom tax.
The scariest of all these is the fierceness with which the perpetrators of these spurious demands come at their targets. Interestingly, the MDAs in some cases get lower judicial officers to tag along in perpetrating their illegalities and, but for the fight in many entrepreneurs, some are left helpless and hopeless.
This is simply a call for innovation, clarity and streamlining in the tax system such that it is not
burdensome and the taxpayers do not have to fend ordinary public utilities for themselves at humongous rates while being fleeced by different tax masters in the same fiscal period.
According to Nelson Mandela “The more informed you are, the less arrogant and aggressive you are”. This is reflected in most of our tax men but in the negative light. Just hope and pray that they don’t cross your path! But then, as long as you are in the market place, you have your troubles cut out for you with them as they literally come at you barefaced with sickles.
You may be going through these or you’re fortunate enough to have had a one-off experience with the tax men.
Please share that experience or better still, share, with us, some insight into the best way to deal with taxes and their collectors.