Tax reforms: NECA hails Tinubu’s ‘bold intervention’, calls for review of diesel VAT

The Nigerian Employers Consultative Association (NECA) says the decision by President Bola Tinubu to suspend the implementation of the Finance Act 2023 will foster a more conducive business environment and reduce the cost of doing business.

Adewale-Smatt Oyerinde, NECA director-general, in a statement on Thursday, lauded the president for signing four executive orders on taxation.

TheCable had reported the signing of the orders, which includes the suspension of the 5 percent excise tax on telecommunication services.

The federal government also suspended the import adjustment tax (IAT) imposed on certain vehicles and the green tax on single-use plastics (SUPs).

Oyerinde said the president’s “bold intervention” has been welcomed with “great enthusiasm”.

“Particularly notable are the suspension of the five percent excise tax on telecommunication services and the excise duties on items like tobacco, beer, wine/spirits, and the 10 percent green tax by way of excise tax single-use plastics,” he said.

“Additionally, the import tax adjustment of 2 percent and 4 percent on imported motor vehicles of varying engine capacities have been put on hold.

“We are genuinely thrilled by the new executive orders; these amendments will undeniably enhance the operating environment and alleviate the high cost of doing business in Nigeria, especially in light of the recent fuel subsidy removal.”

The NECA director general, however, said there is a need for further action, noting that the government should reconsider the introduction of a value-added tax of 7.5 percent on diesel imports and the “outdated” practice of minimum taxation.

According to Oyerinde, these issues, if not addressed, may undermine the gains made by the recent reforms.

“Our businesses continue to be weighed down by these additional tax burdens; it is high time we reviewed such practices that deter economic growth and create hurdles in the path of doing business,” he said.

Oyerinde reaffirmed the association’s commitment to collaborate closely with the current administration.

He advocated further policy changes that could significantly enhance the Nigerian business environment and contribute to national economic prosperity.