Uduegbunam ChukwujamaThe Centre for the Promotion of private Enterprise (CPPE) is disturbed by the rushed passage of the 2022 Finance Bill by the National Assembly. It calls to question the representation role of the Assembly.
In a statement on Sunday January 1, 2023, Director Of CPPE, Dr Muda Yusuf, said Nigeria’s lawmakers gave no room for public hearing and engagement with stakeholders while considering the bill.
“This is a piece of legislation which has profound implications for investment, citizens’ welfare and the Nigeria economy. It is curious and puzzling that the senate gave just 24 hours’ notice for stakeholders to attend a public hearing on the bill,” Yusuf said.
Recall that the public notice was published on 21st December 2022 for a public hearing scheduled for 22nd December 2022. The CPPE believes that there is no better expression of “deliberate exclusion of stakeholders from this important legislative process.”
The House of Representatives gave a more generous notice of about three weeks. But in a sudden and baffling twist of events, the House passed the bill before the date of the advertised public hearing which was 13th January 2023.
The bill has since been forwarded to the President for assent. This haste is incomprehensible.
The bill effected wide ranging amendments on the following legislations:
- Companies Income Tax Act
- Customs, Excise Tariff Act
- Personal Income Tax Act
- Petroleum Profits Tax Act
- Stamp Duties Act
- Value Added Tax Act
- Capital Gains Tax Act
- Corrupt Practices and Other Related Offences Act
- Public Procurement Act
CPPE described as “regrettable” the fact that the National Assembly hurriedly passed the bill without the benefit of input from citizens whom they were elected to represent. “This is a major letdown by the National Assembly in its representation role in our democracy. The action is not consistent with the ideals and principles of our democracy because sovereignty belongs ultimately to the people, Yusuf said.
READ ALSO: Senate Sets Up Special Committee To Probe CBN’s N22.8trn Loan To Buhari’s Gov’t
“What the National Assembly has done is tantamount to disrespect, disregard and contempt of the Nigerian people and the business community,”
The Bill that has been passed contained the following provisions, among others:
- Imposition of excise duties on all services with rates to be determined by a presidential order.
- Imposition of 0.5% tax on all eligible imports from non-African countries to fund Nigeria obligations to international organizations.
- An increase in Tertiary Education Tax from 2.5% to 3% of company profit.
All of these have far-reaching implications for investors and citizens. It will affect the cost of production; it will affect operating cost and would undermine investors’ confidence. It has profound inflationary implications. It will effectively move corporate tax to almost 35% which is one of the highest globally.
READ ALSO:How To Curb Inflationary Shocks On Nigerian Economy, By Muda Yusuf
Currently, corporate tax is 30%; there is tertiary education tax of 2.5%; NITDA tax of 1%; NASENI Levy of 0.25%; Police Trust Fund tax 0.005%. Meanwhile, the National Assembly has already passed a bill imposing 1% tax for NYSC fund [awaiting the assent of the president] and another 1% Tertiary Health Levy is being planned.
In the meantime, investors are grappling with macroeconomic headwinds including depreciating exchange rate, iliquidity in the official forex window, spiking energy cost, weak purchasing power, rising interest rate anld surging inflation.
Meanwhile, companies currently pay multitude of taxes, fees, levies to state governments, local governments and regulatory agencies. The 2022 Finance Bill as presently passed will worsen the situation. “This is not the way to promote economic recovery, job creation and poverty alleviation. Already 133 million citizens are in extreme poverty. These measures would further impoverish the citizens as these additional taxes would be ultimately borne by them,” Muda Yusuf argued.
“We appeal to President Buhari not to leave a legacy of unbearable tax burden for investors in the Nigerian economy. The torrent of taxes, levies, fees are crippling businesses,” Yusuf said.
Calling on President Muhammadu Buhari to refrain from signing the Bill into law, the CPPE said: “We submit that the President should withhold assent on the 2022 Finance Bill until the National Assembly properly engages stakeholders as required by legislative protocols.”
Follow Us