The Center for the Promotion of Private Enterprises (CPPE) said the demand for excise duty on all services would leave the business community vulnerable.
young Joseph, director of the CPPE, announced on Sunday in a statement entitled “Tweaking the 2023 Finance Bill and Options for Unlocking revenue in 2023”.
Mr. Yusuf noted that the provisions of the bill are too broad, inaccurate and broad, adding that there is no jurisdiction in the world where all services are responsible for customs duties.
According to the CPPE boss, customs duties are usually specific and selective, and are often implemented to disincentivize the consumption or production of certain product groups.
“The current open provision is not compatible with investment. It makes the imposition of customs duties arbitrary, arbitrary and unpredictable. The bill should contain the specifics of services to be paid for better stakeholder involvement,” said the CPPE statement.
It is important to take into account the fact that practically all services are now liable to Value Added Tax, the statement added.
“The service sector is a very strategic sector in the Nigerian economy, it contributes 54 percent to the GDP and is currently the largest contributor to the government’s tax revenue. It also accounts for about 53 percent of the workforce.
“We are concerned that companies in the service sector have been paying large taxes in the form of corporate tax which is currently 30 percent, higher education tax 2.5 percent, NITDA 1 percent, NASENI 0.25 percent. , Police Trust Fund Levy at 0.005 per cent and tax retained for profit distribution at 10 percent.
Mr. Yusuf noted that all taxes are a percentage of the company’s profits and there are many taxes and levies imposed by the state government. He added that investors in the sector pay various amounts as fees and levies to regulatory agencies.
“High tax burdens on businesses undermine investment and job creation and can damage government revenue prospects.
READ ALSO: Removal of fuel subsidy will increase Nigeria’s revenue by at least N6 trillion – CPPE
“The revenue drive should focus more on efficiency, effectiveness and equity as the main policy objectives of taxation,” he said.
Other taxes
Commenting on the increase in corporate income tax on gas flaring, Mr. Yusuf noted that, with over 190 trillion cubic feet, Nigeria has the largest gas reserves in the world. According to him, the prospect of investment in gas has never been profitable, especially due to the Russian-Ukrainian conflict.
He added that this is a great opportunity for Nigeria to attract investors into the gas sector and take advantage of the current global demand for gas.
“This is not a good time to impose a punitive tax on gas companies. Moreover, the 50 percent tax imposed is inconsistent with the essence of the Petroleum Industry Act (PIA).
“The government should explore other gas flaring mitigation measures, which should be proportionate to the volume of gas released,” he said.
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