ENUGU, Nigeria (VOICE OF NAIJA) – President Bola Ahmed Tinubu has reiterated that he is irrevocably committed to the pledge made to run a government that will not make life difficult for Nigerians or asphyxiate corporate entities.
The government noted that the adjustments of some of these taxes were designed to raise revenue as well as address environmental and public health concerns.
This development is further demonstration of the avowed commitment of President Bola Ahmed Tinubu, to constantly dialogue with Nigerians and lend a listening ear to their concerns.
In his inaugural speech in 29 May, President Tinubu had promised to address business unfriendly fiscal policy measures and multiplicity of taxes.
Consequently, in keeping faith with his pledge to put Nigerians at the centre of government policies, Tinubu has signed the following Executive Orders:
“The Finance Act (Effective Date Variation) Order, 2023, which has now deferred the commencement date of the changes contained in the Act from May 28, 2023 to September 1, 2023. This is to ensure adherence to the 90 days minimum advance notice for tax changes as contained in the 2017 National Tax Policy.
“The Customs, Excise Tariff (Variation) Amendment Order, 2023. This has also shifted the commencement date of the tax changes from March 27, 2023 to August 1, 2023 and also in line with the National Tax Policy.
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“The President has given an Order suspending the 5% Excise Tax on telecommunication services as well as the Excise Duties escalation on locally manufactured products.
“Further to his commitment to creating a business-friendly environment, the President has ordered the suspension of the newly introduced Green Tax by way of Excise Tax on Single Use Plastics, including plastic containers and bottles. In addition, the President has ordered the suspension of Import Tax Adjustment levy on certain vehicles.”
Mr. Dele Alake, Special Adviser on Special Duties, Communications and Strategy, disclosed this to journalists during a media briefing on Thursday, in Abuja.
He said that this global practice is done with a view to giving taxpayers and businesses reasonable time to adjust to the new tax regime.
Prior to the advent of Tinubu led administration, certain tax changes were introduced via the Customs, Excise Tariff (Variation) Amendment Order, 2023 (henceforth referred to as “the Order”), and was published on the 8 May 2023. The Finance Act, 2023, was also signed into law on the 28 May 2023.
Among others, the Order introduced new Excise Duty on Single Use Plastics (SUPS), higher Excise Duties on some locally manufactured products, including alcoholic beverages and tobacco products, and Green Tax by way of Import Tax Adjustment on certain categories of imported vehicles.
Alake said that the Tinubu Administration has since noticed that some of the tax policies are being implemented retroactively with their commencement dates.
In some instances, pre- dating the official publication of the relevant legal instruments backing the policies.
He said: “We wish to state that the intentions behind upward adjustments of some of these taxes are quite noble. They were designed to raise revenue as well as address environmental and public health concerns. However, they have generated some significant challenges for affected businesses, and elicited serious complaints amongst key stakeholders and in the business community.
READ ALSO: Tinubu Orders Suspension Of Import Tax Adjustment Levy On Certain Vehicles
“Let me mention some of the problems we have identified with the aforementioned tax changes. A document known as the 2017 National Tax Policy approved by the Federal Executive Council of the last administration prescribes a minimum of 90 days’ notice from government to tax-payers’ entities before any tax changes can take effect.”
However, the evidence part of the gaps pointed out earlier, both the Finance Act 2023 and the Customs, Excise Tariff Order 2023, did not give the required minimum notice period, thus putting businesses in violation of the new tax regime even before the changes were announced.
Following this, it was gathered that many of the affected businesses are already contending with the rising costs, falling margins and capacity underutilization due to the various macroeconomic headwinds as well as the impact of the Naira redesign policy.
He recalled that Excise Tax increases on tobacco products and alcoholic beverages from 2022 to 2024, which had already been approved, are also being implemented.
Alake noted that a further escalation of the approved rates by the current Administration presents an image of policy inconsistency and creates an atmosphere of uncertainty for businesses operating in Nigeria.
“The Excise Tax of 5% on telecommunication services has generated heated controversy. There is also a lack of clarity regarding the status of this tax, just as players in the sector also complain about the imposition of multiple taxes on their operations.
“We have also seen that the Green Taxes, including the Single Use Plastics tax and the Import Adjustment Levy on certain categories of vehicles require more consultation and a holistic approach to the country’s net zero plan in a manner that does not impact the economy negatively,” he added.