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By Merit Ibe
The Manufacturers Association of Nigeria (MAN) has hailed the suspension of the obnoxious aspects of the 2023 Fiscal Policy Measures, which arbitrarily imposed additional tax burden on the sector, saying the development has removed looming clog on its operations and productivity.
Director General of the association, Segun Ajayi-Kadir made the remarks following the recent signing of four executive orders which included the suspension of excise tax and duties on locally manufactured products by President Bola Tinubu.
He said manufacturers in the affected sector are pleased and can now reconnect with the projections and plans made in the beginning of the year and expects that the Customs Service will now stand down the requirements for compliance with the excise escalation and the registration for the green tax.
Explaining, he noted that the last administration had revised upward the excise duty as contained in the 2023 fiscal policy measure without any impact assessment and adequate consultation with stakeholders in the manufacturing sector.
While realising that government needs funds, the DG noted that it is advisable that it focuses on expanding the tax base by developing a strategic framework that will bring a substantial number of taxable individuals and businesses that are not in the tax net into the fold.
He viewed that the pursuit of tax increments on already tax-burdened industries was inimical to the growth of the manufacturing sector and not in the overall interest of the citizens who are the ultimate consumers.
“Some of the added tax burdens in the 2023 fiscal policy measures are the arbitrary introduction of a green tax and escalation of the excise duty on alcoholic beverages, wines and tobacco in violation of subsisting government approved roadmap.”
These,the DG said clearly contradicted government’s commitment to maintaining policy stability to boost investment and enhance business confidence in the manufacturing sector. “We indicated that the policy is an additional burden too high to bear, as we were also struggling with low patronage, high borrowing cost and huge energy costs in a highly inflationary environment.
“So, the unwarranted and clearly disingenuous escalation of excise and introduction of new taxes in the 2023 Fiscal Policy Measures had the potential impact of truncating the business projections of producers and assaulting the purchasing capability of the average Nigerian.”
Ajayi-Kadir said it is therefore worthy of commendation that President Ahmed Tinubu took due and far-sighted notice and consideration of the concerns.
“ In keeping with the trend of positive policy initiatives that we have seen with his administration, the four executive orders released has put paid to the anxieties of manufacturers in the affected sectors in particular and operators in the expansive value chain in general.”
He said going forward, MAN will continue to value fruitful dialogue and engagement with the government, with a view to improving the manufacturing environment in particular and the economy in general.
“The sector is already strained by several familiar challenges, including high interest rate and inadequate long-term fund, poor infrastructure, low demand for locally manufactured products, high energy cost in the face of low energy supply, multiple taxation etc.
We look forward to further engagements that will give fillip to the new policy measures President Tinubu has enunciated, so that the challenges that would emerge could be effectively mitigated.
“For instance, one can see the possibility of inadequacy of forex and a lot of pragmatism is needed to ensure a massive inflow and strategic release.”
