How SMEs groan over Abuja’s taxes, others
Micro, Small and Medium Enterprises are grappling to survive multiple taxations and a difficult business environment in the nation’s capital, Abuja.
In 2021, the Federal Capital Territory (FCT), Abuja, ranked 17 on Nigeria’s subnational ease of doing business survey conducted by the Presidential Enabling Business Environment Council chaired by Vice President, Prof Yemi Osinbajo.
One of such firms struggling in a tough business environment is Rayuwa Bakery and Fruital Jugo. Its Operations Manager, Jerry Akpago, said the start-up firm with 20 workers has spent nearly N2 million on taxes.
He said the bakery, which produces confectioneries and juice, pays over 15 types of levies within the FCT yearly: waste disposal, gas emission, tenement rent and many more.
“In the end, the profit margin is very slim and that is why most businesses keep increasing their prices too. Apart from the government taxation that comes on board you still have your daily running that you have to do, you have gas for production, diesel for generator, electricity to buy and in house maintenance of equipment, so you see in the end the cost of running is quite high and the profit margin very slim,” he said.
The manager said government policies are not favourable.
“The greatest favour the government can do for entrepreneurs is to look into multiple taxes which is the killer of business. We run the business at a very high cost, the risk is even higher because you do everything by yourself—you pay for your security, water, electricity, you bear all the risk and cost associated with your business without government help or intervention,” he said.
He appealed to the federal government to reduce tax, streamline the task for entrepreneurs and business owners to succeed.
Recently, the Minister of State for FCT, Dr Ramatu Aliyu, told participants at a tax retreat that multiple taxation would be addressed for the benefit of business owners in the territory.
Dr Aliyu acknowledged the acrimony between the FCT Administration and the Area Council authorities as it relates to the collection of levies, rates, charges and other demands.
However, beyond multiple taxation, Akpago said Rayuwa Bakery, whose motive is to create employment for young people and to produce quality products, is grappling to keep prices steady due to the high price of raw materials.
Every week, the bakery uses about 40 bags of flour for bread.
“The Nigeria market is not what we used to know. The price of everything has gone up completely, but we have refused to let it deter us. We do all in our power to cut down the prices of our confectioneries even though the gain is not as much as it is supposed to be,” he said.
The bakery has increased the price of a loaf of bread from N400 to N450 per loaf due to the high price of raw materials but the price of the juice has remained the same, he noted.
He said people are willing to buy products as long as they get their money’s worth even as the patronage level is quite encouraging.
“There are lots of taxes and then the cost of raw materials has skyrocketed within the past few months. This makes it very difficult for the bakery to operate, but in the past five months that we started we have increased our price just once,” he said.