Sellers of sachet water, commonly called pure water in Nigeria pay at least six different taxes and levies daily.
The levies are often referred to as ‘stickers’, and paid daily to their local government as well as other agencies in their local communities.
Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, revealed this during an interview with TVC’s Deji 360 on Monday.
He acknowledged the significant contribution of the informal sector to the nation’s GDP, employment rate and the economy at large, but lamented that the small businesses close within a short time after establishment as a result of the burden of taxes on the informal sector.
Oyedele emphasised the need for businesses in the informal sector to be encouraged through fiscal incentives, adding that the committee was advocating to the National Assembly for the suspension of these levies as they only stifle economic growth in the country.
“You are going to ask yourself is there any country where they have been very successful with their tax system by chasing everyone? The answer is no.
“You can’t find anyone like that. You cannot become wealthy by taxing poverty,” Oyedele said.
He further said the committee’s proposal to the federal government was a provision that 95 per cent of the informal sectors be exempted from all forms of tax payment to help encourage economic growth and development in the country, adding that their analysis showed that only 5% of the informal sector can afford the taxes imposed on them.
“The idea is we want to support the very important segment of our economy to be able to grow. They contribute a lot to our employment and our GDP, but they struggle. Many of them cannot survive 3 to 4 years so they set up those businesses then they go under. In large part, taxes are accountable for many of those reasons,” Oyedele added.
