NBCC calls on Finance Ministry to review fiscal policy measures

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3 years ago

The Nigeria-British Chamber of Commerce (NBCC) has expressed concern over reported plans by the Federal Ministry of Finance, Budget and Financial Planning to effect a hike in the specific excise component of some products.

The products include alcoholic and non-alcoholic beverages and tobacco: a significant digression from its recently adopted 2022 Fiscal Policy Measures and Tariffs Amendments (FPM 2022) roadmap, which covers the excise expansion from 2022-2024 as approved by the president in March 2022.

In a press release issued by the President and Chairman of the Council of NBCC, Mrs Bisi Adeyemi, the NBCC called for a thorough review of the policy considering its impact on the Nigerian business environment.

“While we understand and appreciate the need to improve Federal Government income, a holistic review of the peculiarities of Nigeria’s current micro and macroeconomic realities as well as the impact of these on businesses and Nigerians specifically, should be undertaken.

“This is to ensure sustainability and minimise the negative impact on the affected sectors including the value chain which will be the hardest hit. Long and medium-term plans and policies that will allow for the engagement and input of all stakeholders usually yield optimal outcomes,” she said.

“The manufacturing sector is currently contending with sundry issues, which include skyrocketing energy costs, rising inflation, foreign exchange scarcity, poor and inadequate infrastructure, increasing difficulties associated with ease of doing business, and other headwinds that increasingly challenge competitiveness in the global market.

“A recent report by the National Bureau of Statistics shows that the value of manufactured goods traded for the second quarter of 2022 fell by 36 per cent compared to the same period in 2021! Even as manufacturers adjust to the approved excise increase in the FPM 2022, the aforementioned conditions are being exacerbated by the fragile state of the country’s economy.

Speaking further, Adeyemi implored the Federal Government to retain the approved excise regime, as contained in the approved FPM 2022, covering the period from 2022 to 2024, and to urgently engage with the affected sectors, chambers of commerce, the organised private sector and other stakeholders, noting that any sudden hike in excise would be counterproductive.

“The benefits of the retention cannot be overemphasised, some of which include a steadily increasing tax contribution from the affected sectors which will be delivered by the 2022 FPM; these sectors are able to support the government’s objective of reducing the high rate of unemployment reported to be at about 33.3 per cent.

“It also improves the inflow of foreign direct investment as investors’ confidence is strengthened by the Government’s continuous demonstration of its willingness to create an enabling environment through stable and consistent policies.”

“Insights from these discussions with the affected sectors, chambers of commerce, the organised private sector and other stakeholders should form the basis of well-rounded policies.

“We also implore the government to institute measures to plug current sources of revenue loss such as oil theft as this will reduce the over-reliance on taxes from a struggling manufacturing sector in the short term,” she added.

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