By Merit Ibe
The Centre for the Promotion of Private Enterprise (CPPE), has expressed worry over the hasty passage of the 2022 Financial Bill, saying there was practically no room for public hearing and engagement with stakeholders in the consideration of the bill.
The centre posited that the rushed passage of the Bill by the National Assembly calls to question the representative role of the Assembly.
The Chief Executive of the Centre, Dr Muda Yusuf, noted that it was curious and puzzling that the Senate gave just 24 hours’ notice for stakeholders to attend a public hearing on the bill, which is a piece of legislation that has profound implications for investment, citizens welfare and the Nigeria economy.
According to him, 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 January 13, 2023. The bill has since been forwarded to the President for assent.
Dr Yusuf said the haste to pass the bill was incomprehensible.
The Bill that has been passed contained the following provisions, among others: Imposition of excise duties on all services with rates to be determined by a presidential order.
Imposition of 0.5 per cent tax on all eligible imports from non-African countries to fund Nigeria obligations to international organizations. An increase in Tertiary Education Tax from 2.5 per cent to 3 per cent of company profit.
He said all of these have far-reaching implications for investors and citizens; will affect the cost of production; operating cost and would undermine investors’ confidence.
“It has profound inflationary implications. It will effectively move corporate tax to almost 35 per cent which is one of the highest globally.”
He appealed to President Muhammadu Buhari not to leave a legacy of unbearable tax burden for investors in the Nigerian economy, noting that the torrent of taxes, levies, fees were crippling businesses.
Yusuf therefore urged the President to withhold assent on the 2022 Finance Bill until the National Assembly properly engages stakeholders as required by legislative protocols.
The bill effected wide ranging amendments on the following legislations: Companies Income Tax Act, Customs, Excise Tariff Act, Personal, Income Tax Act, Petroleum Profits Tax Act, Stamp Duties Act, Value Added Tax Act, Capital Gains Tax Act, Corrupt, Practices and Other Related Offences Act and the Public Procurement Act.
Yusuf lamented that that the National Assembly hurriedly passed the bill without the benefit of input from citizens whom they were elected to represent. “This is a major letdown by the National Assembly in its representation role in our democracy.
“The action is not consistent with the ideals and principles of our democracy because sovereignty belongs ultimately to the people. What the National Assembly has done is tantamount to disrespect, disregard and contempt of the Nigerian people and the business community. “
“Currently, corporate tax is 30 per cent; there is tertiary education tax of 2.5 per cent; NITDA tax of 1 per cent; NASENI Levy of 0.25 per cent; Police Trust Fund tax 0.005 per cent.
Meanwhile, the National Assembly has already passed a bill imposing 1 per cent tax for NYSC fund [awaiting the assent of the president] and another 1 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.
“Meanwhile, companies currently pay 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.”