Africa’s richest man, Aliko Dangote, has said that the Federal Government takes 52% tax on every N1 his company earns in profit in the country, highlighting the challenges of entrepreneurship in Africa.
The business mogul made this disclosure in a statement on Friday in the ongoing Africa CEO Forum in Kigali, Rwanda.
Dangote, addressing the necessity for alignment between government policies and industrial development in Africa, mentioned that inconsistencies in policies could lead to business bankruptcy.
Dangote also acknowledged certain government positive policies like the Petroleum Industry Act (PIA) as steps in the right direction, especially for the energy sector.
“In Nigeria, I think the current government has done quite a lot in the energy sector. For instance, the issue of payment of electricity tariff and the Petroleum Industry Act (PIA).
“It might not be 100% perfect, but it’s a start. But I think the biggest challenge that we have as entrepreneurs in Africa is the inconsistencies in policies.
“The Federal Government can say that the goalpost is here today, and then tomorrow move it to some other place. These are the main issues and they can bankrupt anybody.
“What our political leaders need to understand is that policies should be a win-win strategy. Like they say, you can’t clap with one hand. You have to clap with two.
“Someone was saying the other day that we’re making so much money in cement etc. Later on, I reminded the person that for every N1 I turn around, government collects 52% through various taxes. So it’s not a tea party. Everybody is benefitting,” Dangote said.
What you should know
Despite tax to real Gross Domestic Product (GDP) accounting for 10.8%, the issue of multiple taxations continues to pose a significant barrier to the ease of doing business.
- Upon assuming office, President Tinubu inaugurated the office of the Presidential Committee on Fiscal Policy and Tax Reforms and the subsequent appointment of PwC’s Africa tax leader Mr. Taiwo Oyedele, as chair of the committee.
- As part of its core mandate, the committee plans to reduce the number of taxes from 52 to less than 10 and also change the Federal Inland Revenue Service (FIRS) to Nigeria Revenue Service (NRS) which will harmonise all tax collection activities of the Federal government.
- In addition, the committee recommends an exemption in tax for small-scale businesses and export activities in the country.
- According to Oyedele, the report of the committee will be submitted to the National Assembly by September.
(Nairametrics)
