Nigeria’s ease of doing business environment, instead of fostering growth and opportunity, has given rise to burdensome challenges for businesses, especially small-scale enterprises in transportation, hospitality, catering, and tourism. Even medical tourism ventures are plagued by excessive taxes and levies, leading to preventable losses of life.
The proliferation of taxes and levies continues to hamper the return on investment in the tourism sector, stifling employment opportunities and growth. Industry stakeholders from across the economic spectrum are raising their voices and seeking solutions to alleviate this burden.
Unfortunately, those responsible for protecting and providing tax relief and assistance have chosen to wash their hands of the impending doom, suggesting that those burdened by tax and levy regimes should resort to legal action.
Recently, the president of the Federation of Tourism Associations of Nigeria (FTAN), Mr. Nkereweum Onung, established a legal review committee to assess the implications of the Nigeria Tourism Development Authority (NTDA) and National Institute for Hospitality and Tourism Studies acts on industry growth and survival. It appears that the FTAN leader is aiming to challenge or find alternative paths within these regulations, which seem to disproportionately target the private sector through complex registration, classification, and grading requirements that strangle struggling operators.
Entrepreneurs in Nigeria face numerous tax obligations, including company income tax, stamp duty tax, value-added tax, personal income tax, TV and radio licenses, Pencom tax, and many others. The anticipation of about 17 pending bills on levies awaiting National Assembly approval adds to the anxiety among industry players.
Today, it’s not uncommon for eateries, holiday accommodations, and hotels to forego Google location applications due to exorbitant signage fees. Across Lagos, Abuja, Owerri, Aba, and other state capitals, industry players are subjected to absurd levies such as underground water tax, environmental pollution fees, property fencing fees, generator usage fees, land use charges, building renovation permits, liquor license fees, and parking fees.
Instead of fostering an environment for investment and employment opportunities, the multitude of taxes and levies have pushed many operators and their businesses into the intensive care unit of an unfriendly government and a challenging ease of doing business environment.
While government agencies and ministries thrive off the burden of taxes and levies imposed on the private sector, Nigerian business owners struggle to survive, relying on temporary relief but with no sign of escaping their plight.
Unfortunately, there is a lack of comprehensive statistics on the impact of these unfriendly levies, as well as informed assessments of the sector’s growth potential that could attract local and international investors.
Operators’ pleas and grievances rarely catch the attention of oppressive government regulatory agencies, and in many cases, their hired tax consultants act as coercive enforcers, leaving business owners helpless and resorting to fasting and prayer.
Hospitality and catering businesses struggle to afford customs duties on imported equipment, often resorting to local alternatives to stay afloat. However, even this route is burdened with additional levies, including rising production costs, electricity bills, and standardization requirements that could jeopardize the local fabrication market.
Taxi, car hire, and logistics companies face daily harassment from uniformed government-sanctioned thugs, resorting to intimidation and occasionally taking the law into the excessive actions of regulatory bodies when alerted, perpetuating the belief that the fetish priest cannot cure the diseases inflicted by his master, the Devil.
It is an understatement to say that taxes and levies continue to hinder business growth in the tourism industry.