The organised private sector (OPS) has urged the Federal Government to introduce practical economic measures to save the real sector from collapsing.
Adewale-Smatt Oyerinde, the director-general of Nigeria Employers’ Consultative Association (NECA), who make the call in Abuja, weekend, listed a number of challenges faced by the real sector which, according to him require urgent action by the government.
Oyerinde identified the shortage of foreign exchange, stringent regulatory environment to non-alignment of fiscal and monetary policies, all of which he said have combined to stifle and impose difficulty on doing business in Africa’s biggest economy.
Speaking further, the NECA DG said, “It is obvious to all discerning stakeholders that the nation is faced with acute and self-inflicted revenue challenges and a rising debt profile, among many others.
“Even with the nation’s current level of indebtedness, the government is still poised to borrow over N11 trillion to finance the 2023 national budget.”
The Federal Government had made a cumulative expenditure proposal of over N19 trillion in the 2023 national budget, which is a 15.4 percent increase over the 2022 estimate.
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Oyerinde observed that while it was necessary and critical to generate revenue to fund not only the 2023 national budget, and liquidate the interests accruing on the debts, the government itself would do well not to further burden the real sector with additional taxes and stringent regulatory environment.
Listing issues that were already crushing organised businesses, the NECA DG noted that “while debt and paucity of revenue are challenges that are acknowledged, organised businesses should not be made to suffer the lack of proper economic planning and political will that have pervaded successive administrations.
“At the last count, organised businesses are presently faced with over 50 different taxes, levies and fees at all tiers of government, some of which are duplicated. Currently, at the National Assembly, there are over five different bills, which seek to impose various taxes and levies on organised businesses in addition to the notable taxes and levies which are of general application, such as The National Information Technology Development Levy (NITDA Levy), Education Tax (or Tertiary Education Tax), National Social Insurance Trust Fund (NSITF), Company Income Tax (“CIT”), Television and Radio License Fee, Local Content Levy, Stamp Duty, among others,” he said.
Oyerinde further observed that while taxes were global phenomenon, governments all over the world seek to protect their most productive sectors rather than tax them out of existence.
He said it was strange that at a time when the government should do all that is necessary to protect businesses from total collapse and reduce the increasing unemployment rate, there are proposals to further increase Excise Tax on select products, including the spirits, alcoholic and non-alcoholic products. According to him, “this action will not only reduce the competitiveness of the industries but will also increase the cost of doing businesses and further reduce the potential sustainability”.
While emphasising the need for the government not to over-burden enterprises and also making recommendations on ways out of the debt and revenue quagmire, Oyerinde stated that “it is in the best interest of government to protect the real sector rather than tax it out of existence.
“As the AfCFTA comes into full swing, Nigeria cannot afford to become a dumping ground for cheap imported products because we have refused to protect local businesses. Over the years, we have urged the government to expand the tax net, take a bold step towards stopping the oil-theft industry, take more than a cursory look at national assets that are laying waste and address the national embarrassment called the petrol subsidy regime. There is no justification why the nation’s four refineries are still moribund after many Turn-Around-Maintenances.
It will be counter-productive for the government to continue tightening the noose on legitimate businesses that are contributing to national growth while there exist obvious wastages and inefficiency in government yet unattended to.
As a panacea to the ever reducing direct foreign investment, rising unemployment and multi-facet revenue challenges, the government and its agencies must protect local businesses and make the operating environment more hospitable” he added.
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