As Nigerian consumers continue to seek palliative measures to cushion the effects of the new Finance Bill recently signed into law by President Muhammadu Buhari, the resultant effects of the bill would be a weaker consumer spending that will put regulators on the hedge and test their resolve to protect consumers.
Under the new bill, consumers are expected to pay 7.5 percent Value Added Tax (VAT) on products and services. However, the threshold for the N 50 stamp duty on receipts was raised to N10, 000 from its initial N1, 000.
These charges, especially the n50 point-of-sale (pos) charges will be passed on to the consumers by the merchants in an attempt to grow their bottom line (profit). Hence, the needs for regulatory authorities like the Federal Competition and Consumer Protection Commission (FCCPC) and the Lagos State Consumer Protection Agency (LASCOPA) to up their game.
Expectedly, the president explained that the finance bill will reform Nigeria’s tax laws to align with global best practice, support MSMEs, incentivize investments in infrastructure and capital markets, and raise government revenues.
“It is a good development for us as regard the stamp duty and that means event have over taken the initial legal action initiated by the agency; but none the less, I think it is important we still have engagement with the merchants,” said Kemi Olugbode, the general manager of the Lagos State Consumer Protection Agency (LASCOPA).
According to her, the agency was keen on persecuting merchants for infractions on the N50 Point-of-sale (PoS) charges before the quick intervention of some critical stakeholders who calls for caution and advised that LASCOPA delay the legal action pending the signing into law of the new Finance Bill.
Earlier in the month, LASCOPA engaged stakeholders in the banking sector on the several complaints raised by Lagosians on the N50 PoS charges and stamp duty. However, as a following up to that engagement, LASCOPA will further engage merchants and other stakeholders on its resolve to protect Lagosians against unfair trade practices in the state. “We scheduled a meeting with them for 31 January to let them know the present position of things. It is a good development,” said Olugbode, positing that it is better to engage all parties involved before pressing charges for infractions.
Olugbode further stated that LASCOPA will continue to engage and encourage merchants that it is very wrong to partake in these infractions; as it clearly amount to an unfair trade practice that can be regarded as exploitation of the consumers, which is not acceptable by the agency.
Similarly, the Lagos Chamber of Commerce and Industry (LCCI) had earlier warned of a weaker consumer spending in its forecast for 2020. “We expect economic growth to remain subdued at around 2 per cent by 2020 as consumer demand, as well as private sector investment, will most likely remain weak. We are of the view that failure by the government to fix structural constraints with regards to fixing power challenges and rehabilitating deplorable road networks will perpetuate the poor productivity and performance of the sector,” said Muda Yusuf, the DG of the LCCI.
SEYI JOHN SALAU
