Tuesday, November 7, 2017 1:33PM / Deloitte
The World Bank Group (World Bank) on Tuesday, 31 October 2017, published its 2018 Doing Business Report (the Report) in which Nigeria is now ranked 145th among 190 economies on the ease of doing business index. Nigeria gained 24 places on the latest ranking, an improvement on the prior year’s ranking of 170.
According to the Report, Nigeria alongside El Salvador, India, Malawi, Brunei Darussalam, Kosovo, Uzbekistan, Thailand, Zambia and Djibouti are the top 10 improved countries on the ease of doing business index. Nigeria’s improvement on the ranking is a result of a slew of reforms carried on by the Presidential Enabling Business Environment Council (PEBEC) to improve the business environment in Nigeria.
The PEBEC team worked with various stakeholders across private and public sectors to implement a sixty-day action plan which touched on the various elements that flowed into the doing business assessment. Without doubt, the latest ranking is a direct consequence of the focused pursuit of what the PEBEC Secretariat described as “low hanging fruits” with fundamental impacts on the business environment. The target was to move up by a minimum of 20 positions, with the expectation now greatly exceeded.
Based on the 2018 Report, Nigeria improved in seven indicators with the greatest overall jump being on access to credits. Nigeria is now adjudged as the 6th best country in the world in terms of access to credit and the 2nd best in Africa. Nigeria is the 3rd best country in Sub-Saharan Africa in terms of the protection offered to minority shareholders.
The ease of paying taxes improved by 11 positions with Nigeria now ranked 171st globally and 35th in Sub-Saharan Africa. The improved ranking is traceable to the new efforts at leveraging technology and simplifying the process of filing tax returns and paying taxes. The fact that the overall doing business ranking for Nigeria is much better than the ease of paying taxes is a pointer to the amount of efforts required to get the tax system simplified. Nigeria’s position as the 35th country out of 48 African countries covered in the report should continue to create the hunger and passion at making fundamental structural changes to the system of taxation in Nigeria. The crux of the issue with Nigeria tax system is structural and a fall-out of our federal structure. The quantity and quality of legislation governing our tax system require urgent change.
It is important to note that only Lagos and Kano were covered by the World Bank survey. While this result may be a fair reflection of the overall business environment, the sample size should be put in perspective. For example, while some taxpayers have started taking advantage of the Integrated Tax Administration System (ITAS) to submit their tax returns online, most of the tax filings in 2017 were done manually as most tax offices are yet to migrate to the e-filing platform and still require taxpayers within their jurisdiction to submit manual returns. As the Tax Authorities intensify their campaign and work towards National roll-out of initiatives that are still on pilot in few States, the effect will be felt in more places.
While it is certain that Nigeria’s economy stands to benefit from an improved ranking on the ease of doing business index, all hands must be on deck to ensure that the initiatives that brought about this progress are sustained and improved upon. Nigerian businesses and taxpayers must also take the challenge of demanding for quality service and insisting that reform initiatives announced by government are actualized. Constant feedback and suggestions for improvement should also be provided to affected agencies and organs of government based on field experience. This will ensure that the improvement being noticed is sustained for the collective benefit of the business community.