Minister of Finance, Zainab Ahmed
Stakeholders protest FG’s ‘inimical, ill-timed’ excise tax hike
Organised private sector operators in the country have rejected the Federal Government’s decision to raise tax on excise duty, which they described as ‘ill-timed, anti-economic growth.’
The stakeholders comprising members of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Nigeria Employers’ Consultative Association (NECA), Manufacturers Association of Nigeria (MAN) and the Nigerian Association of Small and Medium Enterprises (NASME), frowned at the timing of the decision announced by the Minister of Finance, Mrs Zainab Ahmed, as contained in a circular dated April 20, 2023
Reacting to the Federal Government decision, via a joint statement signed by the Director-General, MAN, Segun Ajayi-Kadir; Director-General, NACCIMA, Olusola Obadimu; Director-General, NECA, Adewale Oyerinde; Director-General, Ifeanyi Oputa; and Director-General, NASSI, and Eke Ubiji, the private sector operators demanded an immediate reversal of the hike.
According to the private sector business operators, the hike is unwarranted, ill-timed and inimical to the growth and development of the Nigerian economy in general, and the manufacturing sector in particular.
The groups noted that the manufacturing sector is presently grappling with unprecedented challenges including the sustained scarcity of naira, limited access to foreign exchange, a struggling economy and persistent inflation, alongside perennial problems of multiple taxation and epileptic power supply, arguing further that the proposed increase in excise tax would harm any progress made in the area of recovery.
Continuing, existing challenges in the country’s business sector ‘had resulted in a record crash in sales for most businesses running into billions of Naira, with the result that manufacturers are struggling to remain in business, amidst looming job cuts, mothballing of factories and total shutdown of businesses.’
“Increasing excise rate at this time is extremely ill-advised and may sound the death knell for affected businesses and their contribution to the national economy, even as the broader manufacturing sector continues to deteriorate.
“In light of the above, the OPSN respectfully requests the Federal Government to urgently reverse the increase in excise rates to protect the affected industries and the dependent businesses in their extended value chain from imminent collapse with calamitous consequences for the economy.
“We further request that the Federal Government suspends excise taxes in the manufacturing sector for a minimum of six months, to arrest the alarming decline in the sector,” the statement read.
The groups, however, advised the Central Bank of Nigeria (CBN) to prioritise foreign exchange (forex) allocations to the manufacturing sector of the Nigerian economy.
