The federal government has been urged to halt the proposed tariff hike for the manufacturing sector, according to the Nigeria Employers Consultative Association.
Nairametrics reported that according to them, the introduction of excise duty on single-use plastics and the Import Adjustment Tax levy on vehicles of 2000 will have disastrous effects on the manufacturing sector.
The FG’s 2023 Fiscal Policy Measures seek to increase taxes on excise duty on alcoholic beverages, cigarettes, and tobacco products.
This information was provided in a statement by its Director-General, Mr. Adewale-Smatt Oyerinde, which called for the Fiscal Policy Measures for 2023 to be reversed.
The NECA chief urged FG to revert to the 2022 FPM roadmap intended to expire in 2024.
The head of NECA further stated that the Nigerian manufacturing industry is not prepared for the higher tariffs, stating:
“While the government’s new FPM would primarily have an impact on manufacturers, it also has the potential to disrupt the value chain of the organized private sector, with implications for all Nigerians.
“Although the government needs financial support, the planned increases will drive up the loss of jobs, increase manufacturing costs and diminish Nigerian manufacturers’ ability to compete in both domestic and global markets.”
The proposed increases, according to NECA, could worsen smuggling, stunt business expansion in the impacted industries, encourage the production of counterfeit goods, lower Nigerians’ purchasing power, and ultimately lower the government’s projected revenue overall.
“With businesses already paying more than 60 separate taxes and levies, the best the government can do is avoid overtaxing the industry or driving many more to relocate to other climes.”
“The 2023 FMP, as proposed, will neither promote economic growth nor achieve the long-term revenue projection of the government.”
Recall that the federal government’s new tax system includes increased levies on alcoholic beverages, foreign cars, and single-use plastics.
With approximately a month left in The President, Major General Muhammadu Buhari’s term, the government expanded the list of goods that are prohibited from entering the country.
The Federal Government would charge N75 for each litre of imported wine, stout, or beer under the recently implemented levies.
Additionally, new taxes are to be imposed on automobiles, with 2-liter engine vehicles subject to a 2% new tax and 4-liter engine vehicles to a 4% new tax.
This declaration is made in the updated Fiscal Policy Measures for 2023, which is included in a circular dated April 20, 2023, and signed by the Minister of Finance, Budget, and National Planning, Zainab Ahmed.
