By Cross Udo, Abuja
In a bid to curb multiple taxations as complained by a cross-section of Nigeria and the business class, President Bola Tinubu has signed four Executive Orders which include the suspension of the five percent Excise Tax on telecommunication services as well as the Excise Duties escalation on locally manufactured products.
The President also suspended the 2023 Finance Act 2023 deferring the date of its commencement from 28th May, 2023 to 1st of September, 2023.
Some of the suspended taxes were issued through Executive Order by former President Muhammadu Buhari at the twilight of his administration.
The presidency said when the new administration talked about revenue management, it is not only in tax collection, stressing that the starting point is the economic policy as its aim is not to tax poverty and production.
The Special Adviser to the President on Special Duties, Communications, and Strategy, Dele Alake disclosed this while briefing State House correspondents yesterday at the Presidential Villa Abuja.
According to him, some of the tax policies are being implemented retroactively with their commencement dates, and in some instances, pre-dating the official publication of the relevant legal instruments backing them.
Alake had led the members of the administration’s Revenue Team to brief State House newsmen at the Presidential Villa, Abuja.
Others on the team were Special Adviser to the President on Revenue, Mr Zacc Adedeji; Ms Doris Aniettie, a member of the Presidential Advisory Council on Finance and Other Related Matters; Adenike Laoye, from the Office of the Chief of Staff to the President.
*Reverses Buhari’s Finance Act, 2023
He said President Tinubu also signed the Finance Act (Effective Date Variation) Order, 2023, which now defers the commencement date of the changes contained in the Act from May 23, 2023, to September 1, 2023.
He explained that this is to ensure adherence to the 90-day minimum advance notice for tax changes as contained in the 2017 National Tax Policy.
Tinubu also signed The Customs, Excise Tariff (Variation) Amendment Order, 2023, shifting the commencement date of the tax changes from March 27, 2023, to August 1, 2023, and also in line with the National Tax Policy.
He said, “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 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 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.”
According to him, Tinubu intends to listen to the concerns of the Nigerian people and alleviate the negative impacts of the tax adjustments, rather than exacerbate the challenges faced by the citizens.
He further explained that the decision is in fulfillment of Tinubu’s promise to address business unfriendly fiscal policy measures and multiplicity of taxes.
He reiterated the President’s commitment to reviewing complaints about multiple taxation, local and anti-business inhibitions.
He assured that the Tinubu administration will continue to give requisite stimulus by way of friendly policies to allow businesses to flourish in the country.
He said the l President assured Nigerians that there will not be further tax raise without robust and wide consultations undertaken within the context of a coherent fiscal policy framework.
He said, “In closing, the President wishes to reiterate his commitment to reviewing complaints about multiple taxation, and anti-business inhibitions. The Federal Government sees business owners, and 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 sacred mandate he is in power that there will not be further tax raise without robust and wide consultations undertaken within the context of a coherent fiscal policy framework.”
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-day notice from the government to tax-payers before any tax changes can take effect.
“This global practice is done to give 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 underutilisation due to the various macroeconomic headwinds as well as the impact of the Naira redesign policy,” he said.
*Suspends 5% Excise Tax on telecom services
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.
The Presidential spokesman 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.
“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 multiplicity of taxes.”
He explained that it was in fidelity to the pledge to put Nigerians at the centre of government policies that President Tinubu signed the executive orders.
Reacting to a question on whether the President’s action would affect the Petroleum Tax and if new taxes would be introduced, the Special Adviser on Revenue, Mr Adedeji, said that the President intended to lighten tax burdens, harmonise and manage already existing taxes in the best interest of Nigerians.
“As you rightly said that there’s a plan or possible proposal for Petroleum Tax, if you look at the current price templates that have already been included, so this suspension has nothing to do with that. So the pricing structure that you have for PMS today, all those have been included, there are no new taxes that we’re bringing in.
“As my colleague has said, one of the key focuses of this administration is to harmonise our taxes, the way we collect them. Mr. President wants to simplify and make it friendly to business, the way we operate taxes in Nigeria. As we know, when we talk about revenue management, it’s not only in tax collection, the starting point is our economic policy because our aim is not to tax poverty.
“Our aim is not to tax production. We aim to increase our productive activities, and capacity to produce, then we can tax our consumption and that is the direction of our economic planning and then we want to increase the trust that we have in the government. If you have observed what has happened in the last months that we’ve been here, we’ve kept our words, part of what we are doing today, just to increase this trust that we’re here to do what’s best for the country.
“Lastly is that we have a robust plan to improve our collection management, the compliance management because that is what is needed. So we’re not going to impose new taxes, it’s the one that that we’ll improve the collection, the management, and the efficient use of those resources.
“That is the pledge and promise of Mr. President, which we’re here to make sure comes to reality,” he said.
Reacting to a question on whether the President’s action would affect the Petroleum Tax and if new taxes would be introduced, the Special Adviser on Revenue, Mr Adedeji, said that the President intended to lighten tax burdens, harmonise and manage already existing taxes in the best interest of Nigerians.
“As you rightly said that there’s a plan or possibly proposal for Petroleum Tax, if you look at the current price templates that have already been included, so this suspension has nothing to do with that. So the pricing structure that you have for PMS today, all those have been included, there are no new taxes that we’re bringing in.
“As my colleague has said, one of the key focuses of this administration is to harmonise our taxes, the way we collect it, Mr President wants to simplify and make it friendly to business, the way we operate taxes in Nigeria. As we know, when we talk about revenue management, it’s not only in tax collection, the starting point is our economic policy, because our aim is not to tax poverty.
“Our aim is not tax production. We aim to increase our productive activity, and capacity to produce, then we can tax our consumption and that is the direction of our economic planning and then we want to increase the trust that we have in the government. If you have observed what has happened in the last months that we’ve been here, we’ve kept our words, part of what we are doing today, just to increase this trust that we’re here to do what’s best for the country.
“Lastly is that we have a robust plan to improve our collection management, the compliance management because that is what is needed. So we’re not going to impose new taxes, it’s the one that that we’ll improve the collection, the management, and the efficient use of those resources.
“That is the pledge and promise of Mr. President, which we’re here to make sure comes to reality”, he said.
