Africa’s richest man, Aliko Dangote, highlighted the significant challenges faced by entrepreneurs in Africa, pointing out that the Nigerian Federal Government imposes a 52% tax on every N1 his company earns in profit, He made these comments during the Africa CEO Forum in Kigali, Rwanda on Monday.
Dangote stressed the importance of aligning government policies with industrial development, warning that policy inconsistencies could drive businesses into bankruptcy.
He acknowledged some positive government measures, particularly in the energy sector, such as the Petroleum Industry Act (PIA) and the issue of electricity tariff payments.
“In Nigeria, the current government has made notable progress in the energy sector, especially with the Petroleum Industry Act (PIA). While it might not be perfect, it’s a good start. However, the biggest challenge we face as entrepreneurs in Africa is the inconsistency in policies.”
“The government may set a policy today and change it tomorrow, which can lead to business failures,” Dangote said.
He emphasized that government policies need to be mutually beneficial, “Policies should be a win-win strategy.”
“You need both hands to clap, Somebody recently commented on the profits we’re making in cement, but I reminded them that for every N1 I earn, the government takes 52% through various taxes So, it’s not an easy business Everyone is benefitting.”
Despite taxes contributing 10.8% to Nigeria’s real Gross Domestic Product (GDP), the issue of multiple taxations remains a significant barrier to business operations.
To address this, President Tinubu launched the Presidential Committee on Fiscal Policy and Tax Reforms, appointing PwC’s Africa tax leader, Mr. Taiwo Oyedele, as its chair.
The committee aims to reduce the number of taxes from 52 to fewer than 10 and to transform the Federal Inland Revenue Service (FIRS) into the Nigeria Revenue Service (NRS), which will harmonize all federal tax collection activities.
Additionally, the committee recommends tax exemptions for small-scale businesses and export activities.
According to Oyedele, the committee’s report will be submitted to the National Assembly by September.
