FREEPRESS – The Peoples Democratic Party, Manufacturers Association of Nigeria, Lagos Chamber of Commerce and Industry and some economists have opposed the Federal Government’s intention to introduce new taxes to improve revenue generation to fund the proposed 2019 budget.
The Coalition of United Political Parties comprising over 40 political parties is also against the move.
President Muhammadu Buhari on Wednesday presented a proposed N8.83tn budget for next year, with N6.97tn projected as revenue.
The Minister of Finance, Mrs Zainab Ahmed, said on Friday in Abuja that the government had resolved to mobilise more domestic revenue to enable it to fund the 2019 budget.
She said, “We are doing what we can, and very soon we will be generating new revenue initiatives, which will include a new set of taxes and excise duties but also working with the Federal Inland Revenue Service and the Nigeria Customs to enhance measures for enforcement and also for compliance.
“By doing what we are doing, we might have to go to the National Assembly to amend some laws that we have identified which have some gaps, some loopholes. We are doing everything we can to make sure our budgets are better funded, going forward, and it will start from 2019.”
But stakeholders in the political and economic sectors on Friday faulted the move to impose more taxes on Nigerians.
The CUPP described the plan to introduce new taxes and excise duties to fund the 2019 budget as a bad economic policy.
The coalition’s first national spokesman, Imo Ugochinyere, said this in an interview with Saturday PUNCH.
Ugochinyere said the decision was a clear indication that President Muhammadu Buhari no longer had an idea on how to run the country.
He also wondered why the government would find it difficult to fund the budget with the revenues it claimed it had generated from different agencies and the recovery made by the Economic and Financial Crimes Commission.
He said, “You are aware of the crude oil sales that they said was over N7tn; there is the remittance of the Federal Inland Revenue Service that the chairman said is almost N6tn; the Nigeria Customs said it had remitted almost N1.5tn; JAMB said it had remitted N7.8bn; the people in NIMASA said they have almost N21bn. They also said the TSA had saved us some money that I don’t have the figure offhand.
“So what is the economics behind the raising of taxes? How much is the budget? Is it not slightly over N8tn? So why do they need to raise taxes when the revenue they said they had raised, including the recovery they said the EFCC had made and the leakages they said they had blocked, give us over N20tn?
“It is either they are lying about the figures they released about what they have generated or they are lying about the figures about the leakages they claimed they have blocked. If not, there will be no justification for increase in tax.”
The PDP National Publicity Secretary, Kola Ologbondiyan, said, “The party rejects any tax increase for Nigerians because it is proportional to increase in the pain, anguish, hunger and suffering of the people. There are currently multiple taxes which are already killing the economy. Now for the FG to increase taxes, that will further impoverish Nigerians and destroy more businesses.”
The Director-General of LCCI, Mr Muda Yusuf, noted that the government had a major challenge with funding.
He said, “We are dealing with a situation where government revenue can barely fund the recurrent expenditure. It is a fiscal crisis.
“But the way to boost revenue is not to increase taxes or increase the tax rate; the way forward is to expand the capacity of the economy to pay more taxes. This would only happen if there is growth. Introducing new taxes or raising tax rates would further hurt the economy and may even result in lower revenue performance.”
An economic analyst and a director at MAN, Mr Ambrose Oruche, said imposing more taxes on companies would not be the best policy direction.
He suggested that the government should expand its tax net to include the people in the informal sector not paying taxes instead of overburdening those paying.
He said with the introduction of excise duties, multiple taxation both legally and illegally in the country, imposing additional taxes on businesses would cause them to either cut corners or close up shop.
A former Chairman of the Coalition of Northern State Chambers of Commerce, Alhaji Suleiman Miu, said the government should first create an enabling environment for firms to thrive.
He said, “I don’t think imposing more taxes on companies is the best course of action to take at a time like this. Productivity in the real sector is very low, and people are talking of minimum wage. A firm cannot go through all that and still survive.
“It will cause companies to collapse, increase unemployment and crime rate in the country. What the government needs to do is widen its tax base. There are many firms that are not paying taxes.”
The Managing Director/Chief Executive Officer, Financial Derivatives Company Limited, Mr Bismarck Rewane, said, “The minister of finance is right in her aspirations to do that. But the point is that there is a correlation between taxes being paid and the impact of government expenditure on their (taxpayers’) lives. Right now, Nigerians believe, wrongfully or rightfully, that they are not getting a good deal, and therefore there is a crisis of false expectation.”
A former Commissioner for Budget and Planning in Ekiti State, Mr Debo Ajayi, said it would be against conventional wisdom to introduce new taxes “at a time when businesses are struggling.”
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