The Nigeria Employers Consultative Association (NECA) has urged the Federal Government to suspend the implementation of its proposed tariff increases in the manufacturing sector.
In a statement issued in Lagos, its Director-General, Mr. Adewale-Smatt Oyerinde, also called for the reversal of the 2023 Fiscal Policy Measures (FPM).
He advised the government to revert to the 2022 FPM roadmap designed to lapse in 2024.
The approved 2023 FMP includes Supplementary Protection Measures for the implementation of the ECOWAS Common External Tariff (2022 – 2026).
It includes increased excise duty on alcoholic beverages, cigarettes and tobacco products; introduction of excise duty on single-use plastics and Import Adjustment Tax levy on vehicles of 2000 cc and above.
Minister of Finance, Budget and National Planning, Mrs Zainab Shamsuna Ahmed confirmed President Muhammadu Buhari’s approval of the 2023 FPM on May 12.
NECA stated, however, that the newly-introduced FPM and tariff increases were not only worrisome, but also landmines for businesses in the affected sectors.
“While the government’s new FPM will largely affect manufacturers, it also has the potential to disrupt organized private sector’s value-chain with consequential effects on Nigerians as a whole.
“While we understand government’s revenue challenges, the proposed increases will spike production costs and reduce the competitiveness of Nigerian manufacturers in local and international markets.
“With recent reports of unemployment rate hovering above 40 per cent, the economy will be further hard-pressed to withstand the likely loss of jobs that will follow these increases,’’ NECA stated.
Its director-general stressed that the proposed increases, if implemented could aggravate smuggling and stifle growth of businesses in affected sectors.
Oyerinde added that it could promote the production of fake products, reduce purchasing power of Nigerians and ultimately reduce government’s projected revenue across board.
“With more than 60 different taxes and levies currently being paid by businesses, the best that government can do is not to overburden the sector or cause relocation of many more to other climes.
“With about 20 bills pending at the National Assembly with financial implications for businesses, government will do well not to overburden the organised private sector.
“The 2023 FMP, as proposed will neither promote economic growth nor achieve the long-term revenue projection of government,’’ Oyerinde stressed.
