Nigeria’s economy operating costs, production costs, and inflation will increase as a result of the 0.5% tax that is being imposed on all imports from Africa for the 2023 Finance Bill.
This information was provided to Nairametrics by Dr. Muda Yusuf, Director of the Centre for the Promotion of Private Enterprise, titled, “Tweaking the 2023 Finance Bill and Options for Unlocking Revenues” in 2023.
The head of CPPE applauded the Presidency’s decision to refuse assent to the 2023 Finance Bill, arguing that it is in accordance with democratic ideals of lawmaking and ensures inclusion in the legislative process.
According to Dr. Yusuf, the Finance Bill includes a proposal to implement a 0.5% fee that will increase operating costs.
“The proposal in the Finance Bill to impose 0.5% levy on all imports coming from outside of Africa will be an additional burden on both businesses and the citizens. It will escalate operating expenses, production costs and fuel inflation in the economy.
“Most equipment, machinery, ICT equipment, and medical equipment are all imported from outside of Africa.
“Imposing a levy of 0.5% on this group of items will be inimical to investment, economic growth and the welfare of the citizens.”
He added that Nigerian companies are already dealing with profound inflationary effects due to currency depreciation.
“Already, currency depreciation had made imports very expensive with profound inflationary effects. Currently, investors and citizens are paying 0.5% levy on all imports from outside of ECOWAS.
“This is in addition to import duty and numerous charges and levies paid by importers at the ports.”
He continued by saying that the depreciation of the naira has already had a significant impact on inflation for Nigerian businesses.
Noted by CPPE Especially for intermediate goods that are unavailable on the continent, many industries import their raw materials from outside of Africa. We strongly caution against levying an extra tax on imports.
This month, the Nigerian Senate formally enacted the Finance Bill 2022.
The proposed bill, according to Minister of Finance, Budget, and National Planning Zainab Ahmed, is based on five key policy pillars which includes; tax equity, climate change, job creation/economic growth, tax incentives reform, revenue generation/tax administration.
Chargeable assets, the exclusion of losses, and the replacement of commercial assets are some of the other features of the Finance Bill, according to Finance Minister Zainab Ahmed.
A number of financial laws, including the Federal Inland Revenue Service Act, the Customs Excise Tariff Act, the Personal Income Tax Act, the Company Income Tax Act, and the Stamp Duties Act, were recommended for modification in the 2022 Finance Bill.