Fiscal policy: Tax increase, import duty provisions’ll hurt economy – CPPE
The Centre for the Promotion of Private Enterprise (CPPE) has said some tax and import duty provisions in the 2023 fiscal policy measures of the Federal Government would significantly hurt the Nigerian economy.
Director of the centre, Dr Muda Yusuf, who made the statement following the recently released Fiscal policy measures, said the construction and transportation sectors are also vulnerable to fiscal policy-induced downside risks.
Yusuf noted that some of the measures could exacerbate inflationary pressures which are detrimental to economic growth and manufacturing, construction and transportation sectors.
“It is a double whammy for economic players to contend with a regime of high import duty, and prohibitive tax rates amid a depreciating currency,” he said.
He explained that fiscal policy measures must seek to ensure a good balance between objectives of revenue generation, boosting domestic production, enhancing the welfare of citizens, promoting economic growth, deepening economic inclusion, facilitating job creation and recognizing societal ethos, beliefs and values.
On the excise duty on beverages, drinks and wines, Yusuf said it should be noted that the Ad valorem tax is based on the value of the product, which makes the impact even more injurious to industrialists, adding that sustaining current investments in these sectors would be a herculean task.
“These policy measures failed to reckon with the multifarious challenges which industry operators are currently grappling with, some of which include weak and declining consumer purchasing power, Naira exchange rate depreciation which is taking a huge toll on the cost of production, and high energy cost,” the statement said.
He added that multiple taxes and levies are already being imposed on the industry players.
According to him, the implications for the sector and the economy include dr op in sales for investors in the sector, a negative effect on tax revenue from the sector, and loss of direct and indirect jobs which could be in a couple of millions.
