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A member of the organised private sector of Nigeria (OPSN) has called on the federal government to avoid increasing the burden on operators in the real sector of Nigerian economy with additional taxes and stringent regulatory environment.

This call was made yesterday by the Director General of the Nigeria Employers’ Consultative Association (NECA), Mr. Adewale-Smatt Oyerinde, in a statement titled, “Beyond Rhetoric: NECA Calls for Urgent Action to Save the Real Sector.”  

Oyerinde stated that while it was necessary and critical to for government to generate revenue to fund the 2023 national budget and liquidate interest accruing on its debts, “government will do well not to further burden the real sector with additional taxes and stringent regulatory environment.”

He argued that, “it is in the best interest of government to protect the real sector rather than tax it out of existence.”  

He further stated that even though, “debt and paucity of revenue are challenges that are acknowledged, organised businesses should not be made to suffer the lack of proper economic planning and political will that have pervaded successive administrations.

“At the last count, organised businesses are presently faced with over 50 different taxes, levies and fees at all tiers of government, some of which are duplicated.

“Currently, at the National Assembly, there are over five different bills, which seek to impose various taxes and levies on organised businesses in addition to the notable taxes and levies, which are of general application, such as The National Information Technology Development Levy (NITDA Levy), Education Tax (or Tertiary Education Tax), National Social Insurance Trust Fund (NSITF), Company Income Tax (“CIT”), Television and Radio License Fee, Local Content Levy, Stamp duty, among others.

“While taxes are global phenomenon, governments all over the world seek to protect their most productive sectors rather than tax them out of existence.”

Ayorinde found it strange, “that at a time when government should do all that is necessary to protect businesses from total collapse and reduce the increasing unemployment rate, there are proposals to further increase excise tax on select products, including the spirits, alcoholic and non-alcoholic products.”

According to the director general of NECA, “this action will not only reduce the competitiveness of the industries but will also increase the costs of doing businesses and further reduce their potential sustainability.”

He stated unequivocally that, “it is in the best interest of government to protect the real sector rather than tax it out of existence.

“As the AfCFTA comes into full swing, Nigeria cannot afford to become a dumping ground for cheap imported products because we have refused to protect local businesses.

“Over the years, we have urged government to expand the tax net, take a bold step towards stopping the oil-theft industry, take more than a cursory look at national assets that are laying waste and address the national embarrassment called the petrol subsidy regime.

“There is no justification why the nation’s four refineries are still moribund after many Turn-Around-Maintenances.

“It will be counter-productive for government to continue tightening the noose on legitimate businesses that are contributing to national growth while there exist obvious wastages and inefficiency in government that are yet unattended to.

“As a panacea to the ever reducing Foreign Direct Investments, rising unemployment and multi-facet revenue challenges, government and its agencies must protect local businesses and make the operating environment more hospitable.”  

He added that it was no gainsaying that organised businesses have witnessed varied challenges in recent months, including shortage of foreign exchange and stringent regulatory environment to non-alignment of fiscal and monetary policies, which when combined makes doing business difficult in Nigeria.

The NECA noted that it was obvious to all discerning stakeholders that the nation is faced with acute and self-inflicted revenue challenges and a rising debt profile, among many others.

But added that, “even with the nation’s current level of indebtedness, the government is still poised to borrow over N11 trillion to finance the 2023 national budget. Currently, the government had made a cumulative expenditure proposal of over N19 trillion in the 2023 national budget, a 15.4 per cent increase over the 2022 estimate.”