In fulfilment of his promise to address business unfriendly fiscal policy measures and multiplicity of taxes, President Bola Tinubu has signed four Executive Orders.
They include the postponement of the Finance Act 2023 and the suspension of the 5% Excise Tax on telecommunication services
The action announced at a press briefing in the presidential villa, Abuja, on Thursday by Dele Alake, Special Adviser on Special Duties, Communications and Strategy, aims to put Nigerlans at the centre of government policies.
The Orders are the Finance Act (Effective Date Variation) Order, 2023, which has now deferred the commencement date of the changes contained in the Act from May 23, 2023, to September 1, 2023.
According to the presidential spokesman, this is to ensure adherence to the 90 days’ minimum advance notice for tax changes as contained in the 2017 National Tax Policy.
The second one is the Customs, Excise Tariff (Variation) Amendment Order, 2023, which shifts the commencement date of the tax changes from March 27, 2023, to August 1, 2023, and is also in line with the National Tax Policy.
The other Executive Order signed by the president suspends the 5% Excise Tax on telecommunication services as well as the Excise Duties escalation on locally manufactured products.
The last Executive Order also suspends the newly introduced Green Tax by way of Excise Tax on Single-Use Plastics, including plastic containers and bottles.
Tinubu also ordered the suspension of the Import Tax Adjustment levy on certain vehicles.
Alake explained that this is in the president’s commitment to creating a business-friendly environment.
He said “As a listening leader, the President issued these orders to ameliorate the negative impacts of the tax adjustments on businesses and chokehold on households across affected sectors.
“His Excellency will not exacerbate the plight of Nigerians.”
Flanked by Ms Doris Aniettie, member of the Presidential Advisory Council on Finance; Special Adviser to the President on Revenue, Mr Zacc Adedeji; and Adenike Laoye of the Office of the Chief of Staff to the President, Alake recalled that upon taking over the reins of government, the President promised to run a government that will not make life difficult for Nigerians or asphyxiate corporate entities in spite of the challenges.
According to him, the federal government is irrevocably committed to this pledge.
He recalled that prior to the advent of the administration, certain tax changes were introduced via the Customs, Excise Tariff (Variation) Amendment Order, 2023 published on the 8th of May 2023 and the Finance Act, 2023, which was signed into law on the 28th of May 2023.
Listing some of them, the presidential spokesman said: “The Tinubu Administration has since noticed that some of the tax policies are being implemented retroactively with their commencement dates, in some instances, pre-dating the official publication of the relevant legal instruments backing the policies.
“This lacuna has created some challenges in implementation.
“Indeed the intentions behind upward adjustments of some of these taxes are quite noble. They were designed to raise revenue as well as address environmental and health issues of concern.
“However, they have generated some significant challenges for, and elicited serious complaints amongst key stakeholders as well as in the business community.”
According to him, some of the problems identified with the tax changes include the 2017 National Tax Policy approved by President Muhammadu Buhari’s administration prescribing a minimum of 90 days notice from the government to tax-payers before any tax changes can take effect.
He argued: “This global practice is done with a view to giving taxpayers and businesses reasonable time to adjust to the new tax regime.
“However, both the Finance Act 2023 and the Customs, Excise Tariff Order 2023 did not give the required minimum notice period, thus putting businesses in violation of the new tax regime even before the changes were gazetted.
“As a result of this, many of the affected businesses are already contending with the rising costs, falling margins and capacity underutilization due to the various macroeconomic headwinds as well as the impact of the Naira redesign policy.”
He also noted the Excise Tax increases on tobacco products and alcoholic beverages from 2022 to 2024, which had already been approved, are also being implemented.
Alake maintained that a further escalation of the approved rates by the current administration presents an image of policy inconsistency and creates an atmosphere of uncertainty for businesses operating in Nigeria.
He further said: “The Excise Tax of 5% on telecommunication services has generated heated controversy.
“There is also a lack of clarity regarding the status of this tax, just as players in the sector also complain about the imposition of multiple taxes on their operations.
“We have also seen that the Green Taxes, including the Single Use Plastics tax and the Import Adjustment Levy on certain categories of vehicles, require more consultation and a holistic approach to the country’s net zero plan in a manner that does not impact the economy negatively.
“In his inaugural speech, His Excellency, President Bola Ahmed Tinubu promised to address business unfriendly fiscal policy measures and Prultiplicity of taxes.”
He explained that it was in fidelity to the pledge to put Nigerlans at the centre of government policies that President Tinubu signed the Executive Orders.
Alake reiterated Tinubu’s commitment to reviewing complaints about multiple taxation, local and anti-business inhibitions.
He added: “The Federal government sees business owners, local and foreign investors as critical engines in its focus on achieving higher GDP growth and an appreciable reduction in the unemployment rate through job creation.
“The government will, therefore, continue to give requisite stimulus by way of friendly policies to allow businesses to flourish in the country.
“President Bola Tinubu wishes to assure Nigerians by whose mandate he is in power that there will not be further tax raise without robust and wife consultations undertaken within the context of a coherent fiscal policy framework.”
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