The Organised Private Sector (OPS) is opposed to the plan to introduce a Corporate Social Responsibility (CSR) Tax on businesses in Nigeria through the CSR Commission Bill.
The bill is currently before the National Assembly and will; require corporations to conduct research and investigations of the needs of host-communities, identify socially responsible behaviour of organisations in compliance with the legislation, classify corporations and ranke them by size and magnitude of investment to determine the level of corporate social responsibility expected of them.
The OPS is a statement said, “The OPS is concerned of the effects the CSR Bill would have on operators in the real sector of the economy, as well as on the standard of living of the citizenry, if passed into law. The position of the business community had been communicated to the lawmakers through a recent Public Hearing on the Bill in Abuja and also through two stakeholders’ meetings in Lagos.
“Hence, the OPS has decided to draw the attention of all and sundry to this obnoxious bill being considered by the lawmakers. The OPS, having reviewed the bill, is totally opposed to it. This is because the bill is not in the interest of the business community, the citizenry and the economy, and it contradicts the Federal Government’s drive of promoting real sector development, as encapsulated in the seven-point agenda and the Vision 2020 document of this administration.
”Any attempt to introduce a CSR Tax on businesses will constitute additional burden to the multiplicity of taxes which the Federal Government is presently addressing. This could also discourage genuine local and foreign investors currently operating in the country, and prospective ones, thereby eroding the gains being achieved by the Federal Government on the attraction of Foreign Direct Investment (FDI).
“The business community is unanimous in opposing this obnoxious sill based on the following: No country in the world has legislated on Corporate Social Responsibility {CSR), as it is voluntary and not mandatory; hence, OPS strongly opposes the CSR Bill in its entirety.
”CSR is a voluntary initiative undertaken by companies to positively impact on their immediate operational environment and does not require any law.
The cost of doing business in Nigeria is already high, which has continued to pose grave challenge for enterprises. Businesses are already over-burdened with over 150 multiple taxes and levies from the federal, states and local governments; there is, therefore, no need for more “taxes”.
“The functions, which the CSR Bill seeks to assign to the commission, are already within the purview of existing government departments and agencies such as the Ministry of Environment (for environmental issues); Ministry of Labour, the Corporate Affairs Commission and the Ministry of Internal Affairs.
”International best practices have never been to mandate CSR and corporate governance through legislation, but rather encourage companies to voluntarily carry out CSR and good governance.
”A number of companies in Nigeria are already committing trillions of naira on CSR activities. The bill will further encourage corruption in the country as enforcement officers would, as usual, take undue advantage of the situation to extort money from companies.
“The OPS, therefore, wishes to make the following recommendations to the Federal Government and leadership of the National Assembly: The idea of legislating CSR should be stopped and the CSR Bill jettisoned. This is in view of the fact that the establishment of a commission on CSR will create a new avenue for corruption in Nigeria. It would also not be in the best interest of Nigerians or assist in realising the seven-points agenda and Vision 2020 of this administration.
”Government should offer tax incentives to companies that are socially responsible and are already involved in CSR activities as a form of encouragement to those companies and others who may wish to emulate their action,”
"The views and opinions expressed in these comment(s) or article(s) do not necessarily reflect the views or opinions of NGEX, its partners or its affiliates."
Ladi Lagos, Nigeria July 20, 2009
How can the government that has the constitutional duty to provide basic amenities for its people through the judicious use of tax money shift that responsibility to the over-taxed and over-regulated businesses.
What businesses need is less tax not more taxes so they can expand business, provide value for their shareholders and provide more employment.
This is a bad bill, it is ill-conceived, retrogressive and shifting of responsibility from those who collect our taxes and steal the money to those who are trying to do legitimate business in the country.
