The Organised Private Sector (OPS), comprising the Manufacturers Association of Nigeria (MAN), Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), as well as economic experts have described President Bola Tinubu’s signing of four Executive Orders as a landmark decision.
The President, who said the action was part of his bid to improve the nation’s business environment, also stated that he has no intention of increasing taxes in the country.
Some of the suspended taxes were issued through Executive Orders by former President Muhammadu Buhari at the twilight of his administration.
They include Corporate Income tax, Import duties, Export duties, Excise duties, Rents, Capital Gains tax, Personal Income tax, Value Added tax, Stamp duties, Property tax, Licenses, Motor Parking fee, Motor Vehicle fee, Withholding tax, Land tax, Market License fee, Road tax, Business Premises, dividend tax, NHIS levy, Advert fee, Regulation fees, the new NYSC levy.
In their separate reactions on the import of the orders, the various private sector umbrella bodies, said the action was a step in the right direction.
“Manufacturers Association of Nigeria has been calling for the reversal of some of these unpopular, ill-conceived policies. We are certainly excited about it. It looks like we are coming to the end of the era of impunity”, says Chairman of Apapa branch of MAN, Dr. Frank Onyebu.
“I say this with due respect to the fact that MAN held extensive discussions with the immediate past regime on the need to not put additional tax burden on manufacturers who are mostly struggling to stay afloat. Suffice it to say that despite the agreement reached with government representatives, the government still went ahead to enact these draconian policies that are now being shelved.
I therefore give kudos to the new administration. I think that it has taken a number of positive actions within a relatively short space of time. We are encouraged by the new policy direction of this government and hope that it will be sustained. The government needs to take more steps to address the issue of multiple taxation. It needs to be careful not to kill the goose that lays the golden eggs.
“We welcome and support an era of consultation with stakeholders prior to policy decisions. We need the government to not just consult but to actually listen to arguments presented by stakeholders and take them into consideration while enacting policies. We need to build trust. We need to build businesses not destroy them. We need to make our operating environment business friendly. I must warn that neighbouring countries with better business environment are waiting to snap up our existing factories.
“I need to emphasize that manufacturing remains the backbone of any thriving economy. The manufacturing sector should therefore be nurtured and supported to reach its full potential. An attractive operating environment will attract more investment. Ultimately the government would generate more revenue from a larger number of thriving businesses than attempting to skin existing businesses out of existence.
In his reaction, CEO of Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf argued that the decision of the president to revert some of the taxes was commendable and demonstrates the fact that he is a listening and responsive president.
“Given all the challenges that the economy has been facing, especially on the fuel subsidy removal , it is only fair that we reduce other taxes otherwise many businesses will go under,” he said.
“Secondly, these taxes have implications for inflation and the citizens have been complaining about the high cost of living, production and operating cost. FIRS wants to introduce VAT for the informal sector. It’s unnecessary, not even now that people are crying over the high cost of living and doing business. They will be going round and collecting taxes. We don’t need that.”
Also reacting, President, NACCIMA, Chief Dele Kelvin Oye, said the NACCIMA welcomes the recent interventions by the Federal Government on some recent tax changes. “We appreciate the administration’s commitment to ensuring that Nigerian businesses are not unduly burdened by unfavourable policies,” he said.
“We note that the tax changes were intended to raise revenue while addressing important public health and environmental concerns. However, the lack of adequate notice and clarity on the implementation of the changes has resulted in significant challenges for affected businesses, including rising costs, falling margins and capacity underutilisation.
“We commend the decision by President Bola Ahmed Tinubu to sign executive orders deferring the commencement of the tax changes as contained in the Finance Act and Customs, Excise Tariff (Variation) Amendment Order. We also support the suspension of the 5per cent Excise Tax on telecommunication services, the Excise Duties escalation on locally manufactured products, the Green Tax on Single Use Plastics, including plastic containers and bottles, and the Import Tax Adjustment levy on certain vehicles.
“We urge the Federal Government to continue to engage with stakeholders and implement policies that are business-friendly and promote sustainable economic growth. We believe that the private sector is essential to achieving the government’s goal of higher GDP growth and reduced unemployment rate through job creation.”
Meanwhile some finance and economic experts have applauded President Bola Ahmed Tinubu for signing three executive orders halting the implementation of major tax programmes designed by his predecessor, Muhammadu Buhari. The executive orders affect the Finance Act, Customs tariff and telecoms tax and they resonate with manufacturers who wanted more illumination on tax changes and adequate notice for adjustments, as specified in the 2017 National Tax Policy.
Also commenting, Nigeria’s first professor of the capital markets, Uche Uwaleke, noted that the signed Executive Orders were a welcome development that would enhance the business environment and consequently improve the country’s ranking in the ease of doing business.
“The suspension of the proposed import tax adjustment levy on certain vehicles and the excise tax on telecommunications and other locally manufactured products will help to moderate the rising inflation and increase productivity.
“Also, the Finance Act Variation Order 2023 is equally in order to enable taxpayers to adjust to the new provisions in line with the National Tax Policy.
“Much as these developments will help moderate rising inflation, more measures with direct impact on the population need to be put in place in order to significantly ameliorate the adverse consequences of the fuel subsidy removal. These should include the immediate roll out of palliatives promised by the government”, he said.