The Centre for the Promotion of Private Enterprise (CPPE) has called for a total review of the Finance Bill 2022, which President Muhammadu Buhari denied assent to on Tuesday, citing some irregularities.
CPPE, in a statement, said the bill was hastily passed by the National Assembly without inputs from key stakeholders.
According to the statement signed by the founder/CEO, CPPE, Dr. Muda Yusuf, there is no room for a public hearing and engagement with stakeholders in the consideration of the bill.
“This is a piece of legislation that has profound implications for investment, citizens’ welfare and the Nigerian economy. It is curious and puzzling that the Senate gave just 24 hours notice for stakeholders to attend a public hearing on the bill. The public notice was published on 21st December 2022 for a public hearing scheduled for 22nd December 2022. There is no better expression that to say there was a deliberate exclusion of stakeholders from this important legislative process,” CPPE said.
It noted that the House of Representatives gave a more generous notice of about three weeks.
“But in a sudden and baffling twist of events, the House passed the bill before the date of the advertised public hearing, which was 13th January 2023.”
The Finance Bill 2022 contained provisions such as the imposition of excise duties on all services with rates to be determined by presidential order, imposition of 0.5 per cent tax on all eligible imports from non-African countries to fund Nigeria’s obligations to international organisations, an increase in Tertiary Education Tax from 2.5 per cent to three per cent of company profit.
“All of these have far-reaching implications for investors and citizens. It will affect the cost of production; it will affect the operating cost and would undermine investors’ confidence. It has profound inflationary implications. It will effectively move corporate tax to almost 35 percent which is one of the highest globally,” CPPE noted.
It added: “Currently, corporate tax is 30 per cent, there is tertiary education tax of 2.5 percent, NITDA tax of one per cent; NASENI Levy of 0.25 per cent; Police Trust Fund tax 0.005 percent.
“Meanwhile, the National Assembly has already passed a bill imposing one per cent tax for NYSC fund (awaiting the assent of the president) and another one per cent Tertiary Health Levy is being planned.
“In the meantime, investors are grappling with macroeconomic headwinds including depreciating exchange rate, illiquidity in the official forex window, spiking energy cost, weak purchasing power, rising interest rate and surging inflation.
“Companies currently pay a multitude of taxes, fees, levies to state governments, local governments and regulatory agencies. This is not the way to promote economic recovery, job creation and poverty alleviation. Already 133 million citizens are in extreme poverty. These measures would further impoverish the citizens as these additional taxes would be ultimately borne by them.”
The advocacy group appealed to Buhari “not to leave a legacy of unbearable tax burden on investors in the Nigerian economy”, saying the situation is crippling businesses.