The Centre for the Promotion of Private Enterprises has said the imposition of excise duty on all services will affect the business community negatively.
The centre revealed this via a statement issued by the Managing Director of CPPE, Muda Yusuf, made available on Sunday.
According to Yusuf, the provisions of the bill are too broad, inexact and wide-ranging and “makes the business community very vulnerable. There is no jurisdiction around the world where all services are liable to excise duty. Excise duties are typically specific and selective, and often imposed to disincentivise consumption or production of particular product groups.”
He added that the current open-ended provision was unfavourable to investment, and that the bill should include specifics of services to be taxed for better stakeholder engagement.
Yusuf highlighted that all services were currently liable to Value Added Tax.
Expressing concerns over the heavy taxation burden on companies and service sector, Yusuf stated, “We are concerned that companies in the service sector are already paying huge taxes in the form of company tax which is currently at 30per cent, tertiary education tax at 2.5per cent, NITDA levy at one per cent, NASENI levy at 0.25per cent, Police Trust Fund Levy at 0.005per cent and withholding tax on profit distribution at 10per cent.
“All the taxes are percentages of company profit. Additionally, there are numerous taxes and levies imposed by state governments.”
Yusuf noted that the proposal in the Finance Bill to impose 0.5per cent levy on all imports coming from outside of Africa would be an additional burden on both businesses and the citizens.
He said, “It will escalate operating expenses, production costs and fuel inflation in the economy. Most equipment, machineries, ICT equipment, medical equipment are all imported from outside of Africa.
“Imposing a levy of 0.5 per cent on this group of items will be inimical to investment, economic growth and the welfare of the citizens.”
According to him, currency depreciation had made imports very expensive with profound inflationary effects.
He said, “Currently, investors and citizens are paying 0.5 per cent levy on all imports from outside of ECOWAS. This is in addition to import duty and numerous charges and levies paid by importers at the ports.
“Many manufacturers import their raw materials from outside of Africa, especially intermediate products not available on the continent. We strongly advise against the imposition of an additional levy on imports.”
He urged the government to explore other revenue sources so as not to overburden the current crop of taxpayers.
