The Center for the Promotion of Private Enterprise (CPPE), a Non-profit Oganisation, seeking to promote business enterprises through advocacy, on Wednesday called on the finance minister to review the recent provisions to Tax Appeal Tribunals rules.
The rule compels those who have tax disputes to pay 50 percent of the amount in dispute before their appeal can be heard.
Muda Yusuf, chief executive officer, made the call at a press conference in Lagos. He submitted the rule was contrary to the principle of natural justice, and that it constitutes an obstruction to fair hearing.
“We therefore call on the finance minister to review this policy urgently. Besides, the rule is in conflict with the Federal Inland Revenue Service (FIRS) Establishment Act that set up the tribunal.
“We therefore request that this rule be expunged from the proceedings of the tax appeal tribunals in the interest of fair hearing,” he said.
CPPE commended the government for proposing the removal of the 0.25 percent of turnover levy imposed on companies for NASENI (National Science and Engineering Institute) levy.
However, he noted that new taxes are being frequently added to the myriad of taxes on the already over-burdened private sector.
These include the Education Tax, Information Technology tax, Police Fund levy, and the Tertiary Healthcare Fund levy recently passed by NASS among others.
This is in addition to the burden of dealing with multiple tax agencies from FIRS to States IRS, Customs, and so on, all trying to collect revenue and conduct tax audits. These taxes should be harmonised,” Yusuf said.
On Cash Reserves Requirements (CRR), CPPE said the CRR imposed on Nigerian banks is one of the highest globally.
The CRR which is currently at 27.5 percent it said has become a major impediment to financial intermediation by the banks. Even more disturbing it said was the fact that effective CRR is as high as 50 percent or more for some banks.
The Lagos based NGO said Ways and Means finances of the apex bank poses greater liquidity risk to the economy than bank deposits.
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“We therefore seek a reduction in CRR so that the banks can be better placed to play their primary role of financial intermediation in the economy,” Yusuf said.
On the issue of foreign exchange, CPPE has advocated for the adoption of a flexible exchange rate policy regime. “We would like to clarify that this is not a devaluation proposition. Rather, it is a pricing mechanism that reflects the demand and supply fundamentals in the foreign exchange market,”.
Yusuf further explained that It is a model that is sustainable, predictable and transparent. It is a policy regime that would reduce uncertainty and inspire the confidence of investors. It is a policy framework that would minimize discretion and arbitrage in the foreign exchange allocation mechanism.
According to him, a flexible exchange rate regime is a policy choice adopted to cope with changing demand and supply conditions in the forex market. A market rate would also deepen the autonomous foreign exchange market through the liberalization of inflows from Export Proceeds, Diaspora Remittances, Multinational Companies, Donor Agencies, Diplomatic missions etc.
He highlighted other benefits of a flexible exchange rate model to include enhancing liquidity in the foreign exchange market, reducing uncertainty in the foreign exchange market and therefore enhancing the confidence of investors, and more transparent as a mechanism for forex.
CPPE said the Nigeria Postal Bill currently in the national Assembly poses a major risk to the courier industry in Nigeria if passed in its present form.
Some of the provisions it said are oppressive and a complete negation to the principle of fair competition and a level playing field in the investment environment. It is most unfair to promote a legislation that seeks to emasculate courier companies so that the NIPOST can be saved from collapse, despite the enormity of its inefficiencies.
“We submit that these provisions be expunged from the NIPOST Bill in the interest of investors and stakeholders in the courier industry,” Yusuf said.
