The Managing Director of Jumia‘s hotel and flight services, Omolara Adagunodo has stated reasons the Federal Government of Nigeria should grant tax breaks to businesses in the hospitality industry.
Adagunodo who stated this in a press statement hinged the call on the fact that the hospitality industry will contribute more than it is currently to Nigeria’s Gross Domestic Product (GDP) and the economy if it is granted tax breaks.
Recall in 2017 the federal government released a list of 27 companies to enjoy the Federal Government tax break under pioneer status and the hospitality sector was missing.
Adagunodo, therefore, encouraged the federal government to include the hospitality sector in the pioneer status so that the sector can also enjoy its many benefits.
The hospitality sub-sector is currently faced with an avalanche of taxes: Registration of Hospitality Premises, Stamp Duty, Nigerian Social Insurance Trust Fund (NSIT), Industrial Training Fund [ITF] National Pension Commission (PENCOM), Nigerian Tourism Development Corporation (NTDC), Value Added Tax (VAT), Pay As You Earn (PAYE), Company Income Tax, Withholding Tax, Liquor License, Food Handlers and Health Certificate among others.
“The travel and Tourism sector accounted for 1.9% of total GDP as a direct contribution, and 5.1% as a total contribution to GDP in 2017. In monetary terms, Travel and Tourism contributed N2.298 billion to the GDP as a direct contribution and N6.205 billion as a total contribution to the GDP.
“For jobs, the sector directly generated 1.2 million jobs, that’s 1.8% of total employment (and, it’s expected to rise by 4.7% in 2018 to 1.276 million). Whereas total jobs created – both direct and indirect was 3.3 million, that’s 4.8% of total employment, ” Adagunodo added.
“This percentage GDP contribution will significantly increase as these businesses will invest the money on boosting service delivery and overall improvement in the quality of business,” she said.
Despite the efforts of the Central Bank of Nigeria in ensuring that Nigeria becomes a cashless society, some Nigerians still prefer to settle transactions via cash notwithstanding whether it is online or offline.