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Reading: NECA rejects proposed hike in exercise duties
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Nigeria

NECA rejects proposed hike in exercise duties

The Federal Ministry of Finance, Budget, and National Planning proposed raising tariffs on a number of products, but the Nigeria Employers'...

Chima Joseph Ugo
Chima Joseph Ugo - Editor-in-chief October 11, 2022
Updated October 11, 2022 at 10:27 AM
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NECA rejects proposed hike in exercise duties
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NECA rejects proposed hike in exercise duties
The Federal Ministry of Finance, Budget, and National Planning proposed raising tariffs on a number of products, but the Nigeria Employers' Consultative Association, or NECA, has opposed the proposal.

The organised private sector body issued a warning that the increase would impair its capacity for production and ability to support national growth.

In a statement, NECA's Director-General, Mr Adewale Oyerinde, denounced the federal government's proposed plan to raise excise taxes on alcohol, cigarettes, and spirits.

According to him, if the proposed increases are put into effect, they would represent a divergence from the previous roadmap outlined in the 2022 Fiscal Policy Measures and Tariffs Amendments (FPM 2022), which spans the years 2022 through 2024.

Oyerinde argued that a move to hike excise rates in an unsustainable manner could cause government revenue from the industry to significantly take a plunge, rather than increase.

He averred: “Historically, huge increases in excise duty often do not translate to increased revenue in the medium to long term. The more sustainable an excise regime is, the better the industry can contribute to the government treasury.

”Recent economic growth in Nigeria has been driven largely by the non-oil sector. Subjecting the sector to further hardship does not bode well for the future of the industry, or for the growth of government revenue in 2023 and beyond.

”The current minimal growth of the economy is an indication that a huge tax hike would not achieve the desired results for all stakeholders. The Organized Private Sector believes that the rate of increase in the roadmap of the Fiscal Policy Measures and Tariffs Amendments 2022 should be maintained.

”If another increase is imposed, the industry will suffer a further setback and more consumers may tilt toward purchases of products that are less expensive, typically those sourced from the illicit market on which no form of Nigerian tax (including excise) has been paid.”

“While efforts are being made to get industries back to a sustainable level and drive up employment rate, policies that could negate the little gains made so far in the economy should be suspended.”
Tags: Nigeria

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