Africa’s richest businessman and Chairman of Dangote Group of Companies Worldwide, Aliko Dangote, says tax holidays are great sources of revenue that entice companies to invest and have the freedom to expand.
With tax holidays, he said companies had the room to reinvest what they would have paid as taxes to the government in order to grow, expand and later pay higher and more taxes to the government, offer greater opportunities and help grow the economy.
Dangote said this at the 2018 African Transformation Forum organised by the African Centre for Economic Transformation (ACET) in Accra.
Other speakers at the forum were Ghana’s President, Nana Addo Dankwa Akufo-Addo, and his Rwandan counterpart, Paul Kagame, who is also the Chairman of the African Union; the Vice President of Cote d’Ivoire, Daniel Kablan Duncan, and the Executive Vice President of Unilever Ghana-Nigeria, Yaw Nsarko.
He added that after benefitting from tax reliefs, the total amount the companies paid after the period was huge.
Dangote cautioned that it was when tax rates were too high that people looked for avenues to evade tax, adding that “the less you charge, the more you can widen the net and collect a lot of taxes from a lot of people.”
He gave an example of the taxes he had paid to the Nigeria government after the expiration of tax breaks for his companies, citing his sugar factory, whose tax holidays expired in 2006 and between 2007 and 2017 paid a quarter of a trillion naira (about $2694.44 million) in taxes.
Dangote said last year alone, group Dangote paid N100 billion (about $277.78 million) in taxes, adding that while his companies grew and expanded, it benefitted the people.
He said tax holidays gave his companies a lot of room to accumulate cash to reinvest and added that three of his food processing companies would be paying N2 trillion or $5.54 billion as taxes in the next five years.
Dangote stated that one of the major pointers he looked for before investing in any country was the quality of leadership, especially if the leader was a man of his words.
He said if he considered establishing a business in Ghana, he would first pick the speech of the President and check if he had been able to execute quite a lot of the things he promised to do, especially his promise to turn around the economy and bring down interest rates.