Charles Nwaoguji
The Manufacturers Association of Nigeria (MAN) has advised the Federal Government not to go ahead with increase in Value Added Tax (VAT) plan as this would affect the manufacturers and man in the street.
Its President, Mansur Ahmed, said such move by the government would be counter-productive, especially in the light of the still awaited minimum wage.
Ahmed, who stated this at the association’s 48th Annual General Meeting held recently in Lagos, said that the Federal Executive Council went ahead and approved the increase in VAT from 5 per cent to 7.5 per cent, which is subject to National Assembly approval and stakeholders’ engagement amendment of the VAT Act.
He called on the government to address the numerous challenges in the tax system and the results of that engagement is felt in the business environment today.
Also, speaking at the event, the Chairman, MAN Apapa branch, Mr. Frank Onyebu, commended the Federal Government on its new policy that restricts provision of foreign exchange (forex) for food importation.
Onyebu, however, stressed the need for the government to provide further clarification on the items it is imposing restriction on to ensure that items that form inputs for manufacturers are excluded from the list. He lamented the sluggish manufacturing sector and its contribution to the Gross Domestic Product, GDP, saying that the sector has remained stunted despite government’s effort at reposition it via reforms.
Onyebu noted that sourcing forex for importation by manufacturers has also remained a challenge in the country. “Challenges range from funding, especially long-term funds, high interest rate, foreign exchange availability, poor support infrastructure, multiple taxes and levies,” he said.
Others, according to him, include policy somersaults, absence of core industries that would produce raw materials, insecurity, inadequacy of support systems to encourage the growth of small and medium scale industries.