Signages: Businesses demand consolidated taxation from government
In an attempt to give small and medium scale enterprises (SMEs) some breathing space for survival, under the difficult economic environment, operators in the sub-sector have suggested to Lagos State Signage and Advertisement Agency (LASAA) and similar agencies across the country to consolidate taxation of signages at firm’s branches.
SMEs, which are struggling under severe economic conditions, obviously need the signage for brand visibility, but when the signages at their various branches are taxed at various points by LASAA and its like, local government councils and other agencies, the burden becomes heavy on the firms to break even.
“It will be important if an agency like LASAA will consolidate tax of a firm’s signages. SMEs will appreciate it if they tax a signage of a firm in a particular location and forego tax on same firm’s signage in other locations or branches,” Jonathan Alabebe, CEO, Brand Futurz, told BusinessDay.
To make it seamless for SMEs to pay single tax on signage instead of paying for every signage mounted in all their branches, Alabebe said an agency could collect the taxes for distribution to all the local government councils. He regretted the issue of double taxation in the advertising industry, describing it as worrisome. “There are local government officials on the road collecting taxes, LASAA and similar agencies in other states are there, this kills the start-up firms and at the end employment is not generated,” he said.
According to him, the coming of social media has assisted some firms for corporate and product marketing, but platform is not enough.
Alabebe wondered why various aspects of the SME sub-sector have not sponsored research to ascertain the impact of multiple tax on businesses, saying “there is no strong advocacy” from the sector and that is why government runs away with multiple tax with its negative implications on businesses.
Due to the multiple taxes, some firms, especially in Lagos State, now operate without signages identifying them or indicating what they do. This underground operations by many businesses could be noticed from Ikeja to Magodo, Ogudu, Ojodu, Festac, Yaba and Surulere, where many businesses are without signs.
Other experts who spoke with BusinessDay attributed this underground operations to fear of LASAA, who make what they described as ‘exorbitant’ charges on such signages at their business premises.
Non display of such signages by some operators in the SME sub-sector is due to fear and misunderstanding of LASAA operations, Fayo Williams, a pharmacist, told BusinessDay, saying “the way the LASAA calculates their square meter on those signages and imposition of fines is confusing.”
According to her, LASAA fees calculation and procedure need to be simplified.
Placement of signages at business premises is a promotion strategy, which is one of the marketing tools employed to attract customers, and the reverse has implications on employment, Williams said.
Rotimi Idowu, a large format printer based in Lagos, said some businesses removed their signages while others operated without signages for fear of the LASAA charges. Bolaji Finnih, CEO of RightClick, an IT firm, also believed that the fear to avoid LASAA taxes was the major reason some organisations operate without signages.
But he cautioned that the non signages would amount to lack of brand recognition and visibility. It also questions the credibility of the organisations and creates the impression that the business is not big and may not be able to handle some big businesses.
In his view, Segun Aluko, a media agency operator, said operating without signages was for fear of both LASAA, local government officials and others who come for all manners of taxes.
He was particularly worried on taxes on branded vehicles across some states, saying “I pay tax for branding my vehicle in Lagos and if the vehicle gets to Oyo or any other state, they demand for tax also. At the end, I will end up paying heavily on the same vehicle.” He requested that states should come together to harmonise branded vehicle taxes.
Apart from other taxes, some LASAA rates for wall and roof signs up to one square meter are N26,400 for high streets, N17,280 for signs at restrictive areas, while normal areas attract N10,560. Signs that are up to five square meter attract N40,800 per annum in high streets, N26,880 in restrictive areas and N16,320 in normal areas. Signages up to 13 square meter attract N20,160 in rural areas, N40,320 in normal areas, N67,680 in restrictive areas, and N100,800 in high street.
DANIEL OBI
Media Business Editor