By Mathew Dadiya
President Bola Tinubu, Thursday suspended the suspends the Finance Act 2023 introduced by former President Muhammadu Buhari towards the end of his administration, deferring the date of its commencement from 28th May, 2023 to 1st of September, 2023.
The President also signed four Executive Orders (EOs) into law, to curb what it described as arbitrary multiple taxation policy in the country in line with his policy of creating conducive environment for businesses to thrive.
Special Adviser to the President on Special Duties, Communication and Strategy, Dele Alake disclosed this during an interactive session with State House Correspondents at the Presidential Villa, Abuja.
They include the Customs, Excise Tariffs Amendment Order, 2023, as well as the imposition of 5% Excise Tax on Telecommunication Services, amongst others.
Among the Executive Orders signed into law by the President Tinubu, includes the Finance Act (Effective Date Variation) Order, 2023, has now deferred the commencement date of the changes contained in the Act from May 23, 2023 to September 1, 2023 to ensure adherence to the 90 days minimum advance notice for tax changes as contained in the 2017 National Tax Policy.
The second Order involves the Customs, Excise Tariff (Variation) Amendment Order, 2023.
He said Mr President has given an Order suspending the 5% Excise Tax on telecommunication services as well as the Excise Duties escalation on locally manufactured products.
“The fourth EOthe suspension of the newly introduced Green Tax by way of Excise Tax on Single Use Plastics, including plastic containers and bottles.
“In addition, the President has ordered the suspension of Import Tax Adjustment levy on certain vehicles.
“As a listening leader, the President issued these orders to ameliorate the negative impacts of the tax adjustments on businesses and chokehold on households across affected sectors. His Excellency will not exacerbate the plight of Nigerians.
“Indeed the intentions behind upward adjustments of some of these taxes are quite noble. They were designed to raise revenue as well as address environmental and health issues of concern. However, they have generated some significant challenges for, and elicited serious complaints amongst key stakeholders as well as in the business community.”Alake said.
According to him, the Tinubu Administration has since noticed that some of the tax policies are being implemented retroactively with their commencement dates, in some instances, pre-dating the official publication of the relevant legal instruments backing the policies.
This lacuna, the president noted, has created some challenges of implementation.
Some of the problems the Tinubu administration has identified with the aforementioned tax changes, a document known as the 2017 National Tax Policy approved by the Federal Executive Council of the last administration prescribes a minimum of 90 days notice from government to tax-payers before any tax changes can take effect.
He further explained that “this global practice is done with a view to giving taxpayers and businesses reasonable time to adjust to the new tax regime.
“However, both the Finance Act 2023 and the Customs, Excise Tariff Order 2023 did not give the required minimum notice period, thus putting businesses in violation of the new tax regime even before the changes were gazetted.
“As a result of this, many of the affected businesses are already contending with the rising costs, falling margins and capacity underutilization due the various macroeconomic headwinds as well as the impact of the Naira redesign policy.”
Recall that Excise Tax increases on tobacco products and alcoholic beverages from 2022 to 2024, which had already been approved, are also being implemented.
“But a further escalation of the approved rates by the current Administration presents an image of policy inconsistency and creates an atmosphere of uncertainty for businesses operating in Nigeria.
“The Excise Tax of 5% on telecommunication services has generated heated controversy. There is also a lack of clarity regarding the status of this tax, just as players in the sector also complain about the imposition of multiple taxes on their operations.
“We have also seen that the Green Taxes, including the Single Use Plastics tax and the Import Adjustment Levy on certain categories of vehicles require more consultation and a holistic approach to the country’s net zero plan in a manner that does not impact the economy negatively,” Alake stated.
The President at his inaugural speech, promised to address business unfriendly fiscal policy measures and multiplicity of taxes, and has in fidelity to the pledge to put Nigerlans at the centre of government policies signed the four EXecutive Orders.