OSINBAJO AND EASE OF DOING BUSINESS
The demand for tax clearance certificate for registration of business is a big hindrance, argues Idang Alibi
One of the things that has endeared Vice- President Yemi Osinbajo to many Nigerians is his apparent zest or determination to get this byzantine, serpentine, octopoidal and imperially aloof, lumbering-locomotive of a system that we have to ‘move’ like a supersonic jet so that we can quickly get results and get ourselves out of the economic wilderness we are in right now.
I do not know why each time I am moved in my spirit to do a note to the Vepee, I find myself compelled to go Obahaigbonic, that is, adopt the use of high sounding and cascading adjectives in a manner that one of our former federal lawmakers, the one and only Hon. Patrick Obahaigbon, has become famous. Is it because the man is a politician, professor, lawyer and a pastor, a personification of professionals who love words and talk and so I feel instinctively drawn to try to use words that will draw his attention to what I am saying? And by the way, this is just by the way.
Most concerned Nigerians have by now become aware of the country’s Number Two man’s tireless crusade to ensure that government clears most of the obstacles that were originally put in place to regulate conduct and promote honesty, transparency and accountability, but which have, ironically, become hindrances to doing business some of which require speed and timeliness.
During his first stint as Acting President, the Buhari government came out with an Executive Order which focused on the theme of fast-tracking government machinery to make it easier for doing business which has become most identified with Osinbajo. But tried as the man, there are still several unintended obstacles to doing business with ease and speed in Nigeria, especially for small or #Too Young-to-Cope business outfits.
One area I want to cite here is the demand for Tax Clearance Certificate (TCC) for registration to bid for contracts from Federal ministries, departments and agencies (MDAs) or to obtain loans to expand or consolidate on one’s business. It is very alright that in a country where ordinary and corporate citizens are notorious for not being willing to discharge their basic obligation of paying appropriate tax to government, they are required to show evidence of being good citizens before they can be eligible for consideration in benefiting from any public largesse such as contracts or loans.
But well-meaning as this requirement is, it has, in practical reality, become a great hindrance for doing business now in our country, especially for #Too-Young-to-Cope businesses. Why so?
Sir, in case no one has drawn your attention to this yet, let me humbly do so. Before you can get a tax clearance certificate, the FIRS demands that you hire a chartered accountant to go through your company’s books and get audited accounts for three years or according to the number of years your company has been in business. This, ordinarily, should be quite an easy thing to do. But this is Nigeria, a country where the system seems designed to be like the hydra-headed monster called the octopus. When you try to decapitate one head another grows quickly and becomes even more dangerous than the one you had cut off.
Nigeria is truly an amazing country. Every effort made to solve a simple problem always tends to complicate, compound and even confound the original simple problem. The demand for tax clearance certificate was meant to address the problem of tax dodging or avoidance and the loss of revenue by government. Yet, the requirement for TCC has now created some unintended very harmful effect on companies and individuals. It has, in fact led to the death of many young companies and is threatening the lives of many more. Sir, when companies die they are no longer in a position to contribute to the economy or even pay tax, the original reason for the TCC. But how, exactly, is the institution of TCC causing the death of companies? you may ask.
Sir, to be able to obtain this TCC from FIRS, you are required to approach a chartered accountant to look at your company’s books and come up with audited accounts for three years. When you do, the accountants will take one look at your records and ask for a hefty professional fee for each of the years in consideration which is quite often beyond the reach of those companies I have chosen to call #Too-Young-to- Cope.
Sir, I always choose to go personal in order to provide practical, honest and believable evidence to support the point I seek to make. In order to key into this administration’s desire to diversify our economy through agriculture and other sectors, members of the Idang Alibi household set up a private limited liability company called Idang Alibi Farms Limited in September, 2015 to engage in plantation agriculture and processing.
Having thrown in practically everything we have to get the business going, we decided to seek a facility from a bank. A vital part of the requirement before we can put up application for consideration is the almighty tax clearance certificate. We approached a chartered auditor who charged us a princely amount which I am too shy to mention here because our young company does not simply have the money to pay!
If we are to bid for say a contract from the government, we shall also be required to show certificates of registration with PENCOM, NSTIF and BPP. A friend of ours with whom I shared our ordeal with the chartered accountant told me pointblank that we need nothing less than N500, 000 before we will be able go through all these documentations. This, you can easily admit, sir, is an obstacle that is not in any way an ease to doing business. Note, sir, that this is just to be eligible to be considered for a contract or loan! Sir, to tell you the truth, if Idang Alibi Farms Limited were to earn an amount like N500, 000 for business year 2017, we will stage a thanksgiving party and humbly invite a personage like you to it, rather than give it to someone else in order to be able to obtain some document to qualify for anything that we are not even sure will guarantee our getting the facility or eligibility we are seeking.
To my Bekwarra people of Northern Cross River State, using N500, 000 as a ‘non-refundable fee’ for preparing you to be eligible for a loan or grant or anything else you are not too sure of getting is like sacrificing an elephant hoping for a good hunting expedition! If my kinsmen hear that Idang Alibi Farms Limited led by me has done this, they will surely send a delegation to me in Abuja that I should go back to the village for spiritual cleansing or purification of the ‘bad cloud or air’ they are convinced must have enveloped us, caused, no doubt, by evil forces.
What should his Excellency do in the circumstance? Society is dynamic. If a measure adopted to solve a particular problem fails, government, the superintendent of societal affairs, should have the courage to take action by modifying or altogether doing away with that failed or failing measure. Now our society has become digitalised. The tax office should have a platform where the particulars of all individuals and companies are stored which it should follow in demanding for tax. The demand for TCC is outdated. But more importantly, TCC is now not a spear against tax dodging but a tool that is killing the economy in a non-perceptible manner.