Fed Govt's decision to withhold assent on finance bill is good, says Yusuf

CPPE's CEO, Yusuf 

By Favour Ajibade

The Federal Government is working in line with the democratic standards, by withholding assent on the 2023 Finance Bill for growth,the Chief Executive officer, Centre for Promotion of Private Enterprises (CPPE), Mr Muda Yusuf , has said 

He said that the idea would pave way for broader consultation, participation,  inclusion in the legislative process, a development, which democracy requires.

According to him, there would be no room for law making  process and implementation of socio-economic policies, if laws are being made in that direction.

While reacting to the decision by the government to withhold assent to 2023 Finance Bill, he said that provisions of the Bil are  too broad, inexact and and makes the business community very vulnerable.

According to him, there is no jurisdiction in  the world where all services are liable to excise duty, adding that the current open-ended provisions  is inimical to investments since it makes the  imposition of excise duties arbitrary, indiscriminate and unpredictable.

He therefore advised that the Bill should contain specifics of services to be taxed for better stakeholder engagement.

“The service sector is a very strategic sector in the Nigerian economy, contributing 54% to GDP and currently the largest contributor to government tax revenue. It also accounts for an estimated 53% of employment.

Yusuf said: “We are concerned that companies in the service sector are already paying huge taxes in the form of company tax which is currently at 30% , tertiary education tax at 2.5%, NITDA levy at 1%, NASENI levy at 0.25%, Police Trust Fund Levy at 0.005% and withholding tax on profit distribution at 10%. All the taxes are percentages of company profit. Additionally, there are numerous taxes and levies imposed by state governments.” 

He reminded the Government that investors in the sector pay various sums as fees and levies to regulatory agencies, warning that “High tax burden on businesses is detrimental to investment and job creation and could ultimately undermine revenue generation prospects of government” and that Revenue drive should rather focus on efficiency, effectiveness and equity as major policy objectives of taxation.

The CPPE, equally, warned that the proposal in the Finance Bill to impose 0.5 per cent levy on all imports coming from outside of Africa will be an additional burden on both businesses and the citizens.

He said this will escalate operating expenses, production costs and fuel inflation in the economy. Most equipment, machineries, ICT equipment, medical equipment are all imported from outside of Africa.

“Imposing a levy of 0.5% on this group of items will be inimical to investment, economic growth and the welfare of the citizens.

“Already, currency depreciation had made imports very expensive with profound inflationary effects. Currently, investors and citizens are paying 0.5% levy on all imports from outside of ECOWAS. This is in addition to import duty and numerous charges and levies paid by importers at the ports.

“Many manufacturers import their raw materials from outside of Africa, especially intermediate products not available on the continent. We strongly advise against the imposition of an additional levy on imports.” he said.