Business
Stakeholders Decry Nigeria’s Tax System
Stakeholders have warned that the country’s tax system has been identified as the major challenges affecting the growth of companies operating in Nigeria and preventing the entrance of new ones.
Specially the General Secretary, Independent Shareholders Association of Nigeria, Mr Adebayo Adeleke, said that capital market investors are not happy with the tax policy of Nigeria, and that they have complained to the government that they are overtaxed.“As investors, we would be taxed for stamp duties on secondary market transactions and on withholding tax on dividend. It is a multiplicity of taxes on investment securities which can hinder the growth of the capital market,” he said.
He encouraged the government to abolish stamp duties and as well reduce withholding tax on dividend considering the meltdown in the capital market.
A market analyst who spore under anonymity noted that it is the duty of the companies to pay tax in support of the government in its performance of social responsibility in the society. However the degree of taxation in a system propels incentive or disincentive depending on the administration of taxation of government, he said.
This, he said, if improperly administered, become multiplied as is being experienced in the country now.
He explained that it is the duty of companies to render economic services while the government has a responsibility to render social services, and added that the way government imposes multiple taxation on the productive sector the economy has become a disincentive.
He stated that many countries of the world have continued to refine their tax laws to make them more investor- friendly. He suggested the same to the Nigeria government as a way to encourage more quality companies to seek quotation on the Nigeria Stock Exchange (NSE).
The Managing Director of Laksworth investment & Securities Limited, Mr Kayode Awotile, pointed out the multiple tax system has affected industries profitability as well as returns on investment. He therefore, called on the federal government to reduce the 10 per cent withholding tax on dividend and the corporate tax.
Awotile pointed out that tax incentives would encourage new companies to invest in Nigeria as well as impact positively on performance of the existing ones. He urged the government to hasten the revival of the power sector and ensure constant power supply, noting that most companies depend wholly on generators for daily activities.
Credit to Nigeria’s private sector rose to N83.26 trillion in June 2026 from N81.04 trillion in May, signifying a positive balance of N2.22 trillion month-on-month.
Year-on-year, the figure represents a nine per cent increase compared with the N76.13 trillion recorded in June 2025. The latest figures come as the CBN continues to balance efforts to control inflation with the need to support economic growth and expand credit to businesses.
The CBN data shows that credit to Nigeria’s private sector increased by approximately 2.74 per cent month-on-month between May and June 2026. Also, the CBN data noted that credit to the government fell slightly to N40.03 trillion from N40.38 trillion. Other assets, net, dropped to N10.76 trillion from N12.63 trillion.
The credit surge signifies sustained growth in lending to businesses and other private-sector borrowers during the month. The rise in private sector credit was recorded alongside an increase in net domestic credit, despite declines in credit to government and other assets.
Further analysis of the report says that compared with June 2025, private sector credit rose by about N7.13 trillion yea-on-year but net domestic credit increased by approximately N1.87 trillion during the month.
The CBN’s relatively tight monetary policy stance notwithstanding, more banks still loaded funds to the private sector within the period. The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) held its 306th meeting on July 20 and 21.
The Committee reviewed recent developments in the global and domestic economies, assessed emerging risks to the outlook and considered their implications for monetary policy and retained all rates.
The Committee decided to retain the Monetary Policy Rate at 26.5 per cent; the Standing Facilities Corridor around the MPR at +50/-450 basis points and retain the Cash Reserve Requirement (CRR) for Deposit Money Banks at 45.00 per cent, Merchant Banks at 16.00 per cent, and non-TSA public sector deposits at 75.00 per cent.
The MPC decision means that credit extension in the private sector will likely continue to rise because of rising confidence in the sector and calls by stakeholders for banks to invest in the private scetor instead of government securities.
