Jumia Request Tax Break for Hospitality Business
The Managing Director of Jumia’s hotel and flight services, Omolara Adagunodo has urged the Federal Government to add the hospitality sector among the list of companies granted tax breaks, with the assumption that the industry will contribute more to Nigeria’s economy if the numerous taxes were cut. She made the suggestion to the Federal Government on the importance of granting tax breaks to businesses in the hospitality sector.
Adagunodo said if the government considers granting tax breaks to the hospitality sector, the businesses will contribute more than it is currently contributing to Nigeria’s Gross Domestic Product (GDP) and the economy.
The Federal Government had released a list of 27 companies to enjoy the government’s tax break under pioneer status in 2017, and the hospitality sector was missing. In a statement released on the company’s website, Adagunodo encouraged the government to include the hospitality sector in the pioneer status so that the industry could 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.
Adagunodo defended her request with figures, stating that the hospitality sector contributed N6.205 billion as a total contribution to the GDP, and will contribute more if tax breaks are granted to the sector.
“The travel and tourism sector accounted for 1.9 per cent of total GDP as a direct contribution, and 5.1 per cent 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 per cent of total employment (and, it’s expected to rise by 4.7 per cent in 2018 to 1.276 million).
She said “Whereas total jobs created – both direct and indirect was 3.3 million, that’s 4.8 per cent of total employment. 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.”
E-commerce operator Jumia has announced a partnership with travel technology firm Amadeus. Under the terms of the deal, Amadeus will provide a mobile booking platform. Jumia, which began offering flight booking services in 2017, has seen over 400 per growths in the last one year.