Home News Finance Bill: CPPE makes recommendations to aid final assent

Finance Bill: CPPE makes recommendations to aid final assent

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The Centre for Promotion of Private Enterprises (CPPE) has made recommendations on the 2023 Finance Bill to assist government’s decision making process and mitigate impact on the business community upon assent to the bill.

Dr Muda Yusuf, Founder, CPPE, in a statement on Sunday in Lagos, commended President Muhammadu Buhari for withholding assent on the 2023 Finance Bill to allow for broader consultation and inclusiveness in the legislative process.

This, according to him, is in line with democratic standards of law making.

Yusuf described the provision which was to allow the imposition of excise duty on all services in the proposed bill as too broad, inexact and wide ranging, making the business community very vulnerable.

He noted that there was no jurisdiction around the world where all services were liable to excise duty, stating that practically all services were currently liable to Value Added Tax(VAT).

He added that the service sector was very strategic to the Nigerian economy, contributing 54 per cent to Gross Domestic Product (GDP), 53 per cent to employment and was currently the largest contributor to government tax revenue.

“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 per cent , tertiary education tax at 2.5 per cent, NITDA levy at one per cent.

“Others are the NASENI levy at 0.25 per cent, Police Trust Fund Levy at 0.005 per cent and withholding tax on profit distribution at 10 per cent.

“Excise duties are typically specific and selective, and often imposed to disincentivise consumption or production of particular product groups.

“The current open-ended provision is inimical to investment and makes the imposition of excise duties arbitrary, indiscriminate and unpredictable.

“The bill should contain specifics of services to be taxed for better stakeholder engagement,” he said.

Yusuf said the provision which sought to impose 0.5 per cent levy on all imports from outside of Africa, would be an additional burden on both businesses and citizens.

According to him, the development will escalate operating expenses, production costs and fuel inflation in the economy.

He noted that most medical, Information and Communication Technology (ICT) and other manufacturing equipment and machineries were all imported from Africa.

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

“Already, currency depreciation has made imports very expensive with profound inflationary effects.

“Currently, investors and citizens are paying 0.5 per cent levy on all imports from outside of ECOWAS in addition to import duty and numerous charges and levies paid by importers at the ports.

“We strongly advise against the imposition of an additional levy on imports,” he said.

Yusuf also decried the proposal to increase tertiary education tax from 2.5 per cent to three per cent, saying the development was too soon to propose another increase as the last was done two years ago.

“Besides, companies are still contending with several macroeconomic, structural, global and regulatory headwinds and so will be inequitable to increase the tertiary education tax at this time.

“We should be a lot more creative in our revenue drive so as not to overburden the current crop of tax payers as the tax base is still extremely narrow and should be widened,” he said.

Yusuf also said that plans to hike company income tax on gas flaring companies was ill-timed, seeing that the ongoing Russia-Ukraine war presented a great opportunity for investment into the Nigerian gas sector.

The CPPE founder added that the proposed 50 per cent tax was not consistent with the essence of the recently enacted Petroleum Industry Act [PIA].

He charged government to explore other gas flaring mitigation measures, which must be proportional to the volume of gas flared.

(NAN)

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