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SMEs: Multiple Taxation, Dearth of Infrastructure Hurting Our Businesses



Evaluation of Public Accountability and Tax Culture among Tax Payers in Nigeria
  • SMEs: Multiple Taxation, Dearth of Infrastructure Hurting Our Businesses

Small and Medium Enterprises (SMEs), particularly those on the Ikorodu axis of Lagos State, have cried out that excessive taxation and dearth of supportive infrastructure, among other harsh operating environment-related challenges, are taking a huge toll on their businesses.

Some of the small business owners in Ikorodulamented that constant and multiple demands for taxes by various agents of the government were hurting their profitability and threatening the sustainability of their businesses.

For instance, Logistics &Facility Manager, Hallel Engineering Company, Mr. Adeolu Akinpelu, said his company was faced with the challenge of double taxation by the government under various names and categories.

Akinpelu said there was a need for the government at all levels to harmonise the various taxes to be paid by different categories of businesses, to avoid the current situation where businesses, particularly SMEs, are forced to pay the same taxes but with different sub-heads.

He argued that multiplicity of taxes was having debilitating effects on SMEs by cutting into their profit margin. Besides, those who could not cope with the excessive taxation have been forced to either close shop or relocate to other climes where tax regimes are SME-friendlier.

To the CEO of Zaiphie Transformation, a firm of make-up artists, Miss Ifeoma Ikechukwu, the challenges facing SMEs in Ikorodu area of Lagos go beyond tax. She said the perception of Ikorodu as being in the backwaters of civilisation due to lack of infrastructure was a pain in the neck of small business owners.

The beauty artist said: “The price of makeup and hair products increases daily, and it is affecting my business. But, unfortunately, people see Ikorodu as an undeveloped area and insist that our products must be cheap without recourse to the fact that we all buy from the same market,”

Miss Ikechukwu lamented that the location of her business in Ikorodu was a major disincentive as customer patronage was low because of the poor infrastructure in the area, such as regular supply of electricity, potable water and good roads, among others.

She, therefore, called on the state government to improve the infrastructure in the area in order to boost SMEs and ultimately, create jobs.

Similarly, Managing Director, Marthridge Stitches, Mrs. Martha Aimuemojie, complained that because of poor infrastructure in Ikorodu, many of her customers are unable to locate her business address.

According to her, the difficulty by prospective customers in locating her business address affects the price of her goods and services. She expressed regrets that location determines the price of goods and services, whether one is good or not in the business.

Another dealer in beauty products, who gave her name only as Mrs. Orakwe, however, said the hurdles before SMEs in Ikorodu cannot be divorced from the general economic downturn plaguing the nation following the collapse of oil prices at the international market.

Orakwe said the economic recession that gripped the country since the crisis started has forced many people to re-order their priorities, as many Nigerians now prefer to feed their families first before thinking of buying beauty products and indeed, other products and services.

Apart from the economic downturn, Orakwe also lamented that the seeming gradual disappearance of the apprenticeship culture from the SME landscape was not helping matters. She said nowadays most apprentices want to make money rather than learn from their masters.

She added that apprentices learn the trades now are cajoled to do so. She decried the lazy and poor work culture among the youth, and called for a paradigm shift.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade experience in the global financial markets.