By Bimbola Oyesola, [email protected]
The Organised Private Sector (OPS) has cried out that increase in taxes and other tariffs are killing businesses in the country.
This is even as it has called on President Muhammadu Buhari not to sign into law the new National Youth Service Corps (NYSC) levy, warning that it would further increase the burden of doing business in Nigeria.
President of the Nigeria Employers Consultative Association (NECA), Taiwo Adeniyi in his address during the association’s 65th Annual General Meeting (AGM) in Lagos reasoned that the introduction of a new NYSC Levy on businesses, while industries groan under the weight of many challenges will have negative consequences on Organized businesses.
“We urge the President, in his usual magnanimous way to refuse assent to the NYSC Bill passed into law by the National Assembly,” he said.
He expressed that members of the OPS have noted with great concern the dangerous trend of continuous introduction of new levies, taxes and charges at all levels of government.
According to him, in the last one-year, Organized Businesses have been faced with increase in electricity tariff without corresponding improvement in service delivery; sky-rocketing diesel and other energy costs among many others.
He said, “We also call on the Tax authorities and, indeed, the Federal Ministry of Finance, Budget and National Planning that rather than the introduction of new taxes to fund the National budget and other developmental projects, efforts should be stepped up to expand the tax net and block the numerous leakages in Government institutions.”
He lamented that the rising cost of diesel has increased the costs of businesses and puts them at risk as their costs have increased significantly.
Adeniyi opined that the impact of the increase in the price of diesel on cost of operation is due to the country’s poor power situation and the reliance on the importation of diesel.
He advocated that in the short run, the government can support businesses by providing financial support to SMEs to survive the current high operating cost induced by high diesel prices.
“In the medium and long term, the government needs to focus on the power and refinery production capacity adding that an improvement in the power situation would reduce businesses’ reliance on diesel to power their operation.
“Also, the government needs to intensify efforts to increase the number of functioning refineries in the country thereby increasing domestic production of refined petroleum products, including diesel.
“Improvement in the power situation and an increase in domestic diesel production would reduce expenditure on diesel, and reduce their overall cost of operation,” he stated.
He expressed that the rising cost of diesel is partly due to the Russia-Ukraine conflict.
“The economic sanctions imposed on Russia, a leading oil producer in the international market, have disrupted the global distribution chain for crude oil. As a result, diesel produced from crude oil is currently in low supply, resulting in a hike in its price. With the poor power supply in the country, most businesses depend on diesel-powered generators for electricity to carry out their production and other activities.”