Financial Energy Review
……..as Corporate Tax is Raised to 35 Percent Highest Globally……..
Director,Centre for The Promotion of Private Enterprise, CPPE,Dr. Muda Yussuf, has urged President Muhammadu Buhari to withhold assent on the 2022 Finance Bill until the National Assembly properly engages stakeholders in line with legislative protocols.
His appeal was sequel to the hurried passage of the 2022 Finance Bill by the National Assembly without requisite engagement with Nigerians.
Yussuf,in a statement on Sunday,said there was practically no room for public hearing and engagement with stakeholders in the consideration of the bill which has profound implications for investment, citizens welfare and the Nigeria economy.
“It is curious and puzzling that the senate gave just 24 hours’ notice for stakeholders to attend a public hearing on the bill. The public notice was published on 21st December 2022 for a public hearing scheduled for 22nd December 2022. There is no better expression of deliberate exclusion of stakeholders from this important legislative process.
“The House of Representatives gave a more generous notice of about three weeks. But in a sudden and baffling twist of events, the House passed the bill before the date of the advertised public hearing which was 13th January 2023. The bill has since been forwarded to the President for assent. This haste is incomprehensible.
” t is regrettable that National Assembly hurriedly passed the bill without the benefit of input from citizens whom they were elected to represent. This is a major letdown by the National Assembly in its representation role in our democracy.
“The action is not consistent with the ideals and principles of our democracy because sovereignty belongs ultimately to the people. What the National Assembly has done is tantamount to disrespect, disregard and contempt of the Nigerian people and the business community”
According to him,the Bill that has been passed contained the following provisions, among others: Imposition of excise duties on all services with rates to be determined by a presidential order.
He reasoned that imposition of 0.5% tax on all eligible imports from non-African countries to fund Nigeria obligations to international organizations and an ncrease in tertiary education tax from 2.5% to 3% of company profit have far-reaching implications for investors and citizens.
He said it will affect the cost of production; it will affect operating cost and would undermine investors’ confidence,stressing that has profound inflationary implications and will effectively move corporate tax to almost 35% which is one of the highest globally.
He said:”Currently, corporate tax is 30%; there is tertiary education tax of 2.5%; NITDA tax of 1%; NASENI Levy of 0.25%; Police Trust Fund tax 0.005%. Meanwhile, the National Assembly has already passed a bill imposing 1% tax for NYSC fund [awaiting the assent of the president] and another 1% Tertiary Health Levy is being planned.
“In the meantime, investors are grappling with macroeconomic headwinds including depreciating exchange rate, illiquidity in the official forex window, spiking energy cost, weak purchasing power, rising interest rate and surging inflation.
“Meanwhile, companies currently pay multitude of taxes, fees, levies to state governments, local governments and regulatory agencies.This is not the way to promote economic recovery, job creation and poverty alleviation. Already 133 million citizens are in extreme poverty.
“These measures would further impoverish the citizens as these additional taxes would be ultimately borne by them.We appeal to President Buhari not to leave a legacy of unbearable tax burden for investors in the Nigerian economy. The torrent of taxes, levies, fees is crippling business”
