Article summary
- Increases counterproductive as it will aggravate the current rate of unemployment, encourage smuggling and discourage Foreign Direct Investment (FDI).
- Multi-dimensional challenges currently being faced by organised businesses
- They add it will also reduce the purchasing power of Nigerians.
The Nigerian Employees Consultative Association (NECA) warned that the recent plan by the FG to increase taxes is counter-productive as it will aggravate the current rate of unemployment,
NECA added that it will also encourage smuggling and discourage Foreign Direct Investment (FDI).
This was disclosed in a statement by Mr Adewale-Smatt Oyerinde, the Director-General of NECA in Abuja, reacting to plans by the FG to lift duties and levies.
Counter Productive
NECA urged FG to suspend the increase in Excise Duty and the introduction of new taxes and levies across board, citing that the business climate is not ready for it, adding:
- “The Road-map as previously agreed on Excise should be adhered to, in the spirit of policy consistency.
- “The increases, if implemented, will be counter-productive as it will aggravate the current rate of unemployment, encourage smuggling and discourage Foreign Direct Investment (FDI).
- “It will also reduce the purchasing power of Nigerians and actively promote the relocation of businesses to other countries (Corporate-Japa).
- “With the multi-dimensional challenges currently faced by organised businesses, a gift that Nigerians do not want is increase in taxes.”
Tax Burden
NECA uurged such acts leave a of tax-burdens that would endanger the fragile growth achieved in the economy on the altar of revenue generation, adding that Nigerian businesses are dealing with over 60 different taxes, levies and fees paid by businesses annually, he said:
- “As the Voice of Organised Business in Nigeria and a critical Stakeholder in Nigeria’s economic renaissance, we reaffirm our commitment to Decent Work, Responsible Enterprises and protection of Workers and Enterprise rights through all legal and legitimate means.
Backstory
Nairametrics reported last week that Federal Government introduced a new set of taxes on alcoholic beverages, imported vehicles and single-use plastics in its new tax regime.
The government has also added to the list of items banned from being imported into the country with about a month to the end of President Muhammadu Buhari’s administration.
- The Federal Government said under the new tax regime, N75 per litre will be charged on beer, stout and imported wine, adding that this new excise duty on beer and stout will be increased to N100 per litre in 2024.
- The Federal Government also revised the import prohibition list with the inclusion of new items.
- Additional taxes are to be levied on motor vehicles with a 2% new tax on 2-litre engine vehicles, while 4-litre engine vehicles will attract a 4% new tax.
