Friday, 1st December 2023

Tinubu’s fiscal framework takes form ahead of cabinet formation

By Geoff Iyatse
10 July 2023   |   3:12 am
President Bola Tinubu’s fiscal direction may have started taking its form ahead of the composition of the full national economic team, including the appointment of the Minister of Finance who will drive the implementation.

President Bola Ahmed Tinubu PHOTO; Twitter

• CPPE seeks incentives for manufacturers as ICAN lobbies for members

President Bola Tinubu’s fiscal direction may have started taking its form ahead of the composition of the full national economic team, including the appointment of the Minister of Finance who will drive the implementation.

Last week, the President issued an executive order suspending some controversies created in the twilight of the former administration. He followed up with the approval of the establishment of a Presidential Committee on Fiscal Policy and Tax Reforms.

The committee is headed by a long-standing advocate of tax reform and an opponent of multiple taxes, Taiwo Oyedele. Oyedele, Fiscal Policy Partner and Africa Tax Leader at PwC, is a known pro-private sector backer.

For effective policy intervention, the Institute of Chartered Accountants of Nigeria (ICAN), has called on the President to populate the team with members of its fold even as it identified with his bold economic reforms.

“We also identify with his support for clean energy transition that factors in the vast gas resources of the country which in our view is energy justice and will reduce debt exposure of the country. We commend him for these quick and bold actions, drawing attention to consideration of the plight of those within the low-income bracket.

“However, another quick and bold action that the President must take as he considers his ministers is the appointment of more chartered accountants in his cabinet. The socio-political challenges facing
Nigeria today calls for the intervention of chartered accountants in public governance. Chartered accountants should man key sensitive positions requiring proper accountability as there cannot be effective public governance without accountants,” the institute said in a statement.

Already, the Centre for Promotion of Private Enterprise (CPPE) has hailed the decision as a remarkable departure from the norm.
The centre, nonetheless, is also reeking multi-level fiscal incentives for manufacturers and other players in the economy to mitigate the impacts of economic reforms on Nigerians.

CPPE, in a position statement on the executive orders suspending some taxes and signed by the Managing Director, Dr. Muda Yusuf, gave the recommendation.
It called for “generous import duty concessions” on agricultural sector inputs/machinery and intermediates products for manufacturers, which are not available locally.

It also urged the government to grant fiscal incentives for food processing companies to reduce the cost of staple foods while “scrapping import duty on industrial machinery and equipment”.

“Other sectors deserving of tariff concessions are health, power generation, renewable power equipment and machinery for petroleum refining.
“Import duty on 15-seater passenger buses and above should be slashed by 50 per cent. This would make it possible for more corporate bodies, government agencies and commercial transport operators to invest more in the provision of mass transit buses for their staff and commuters,” it advised.

The advocacy body also urged the government to reduce import duty on cars of 2000cc engine capacity and below by 50 per cent as a relief to the middle class who have been affected by the economic hardship.

Recall that the Central Bank of Nigeria (CBN) recently reviewed the foreign exchange rate for import duty determination by +40 per cent to align with the new official rate. The review, which puts the lowest vehicle duty value at over N1 million has raised concern about vehicle affordability.

The Centre commended President Bola Tinubu for the step taken to address challenges relating to taxation and the suspension of some controversial charges.

The order suspended excise duty escalation and green tax on some categories of vehicles contained in the 2023 Fiscal Policy Measures. It also deferred the effective date of the Finance Act 2023 and some customs tariffs to comply with the mandatory 90 days’ notice prescribed in the National Tax Policy as well as ensure reasonable notice for customs tariff reviews.

“We commend this move to normalize policy implementation processes consistent with the national tax policy and best practice principles. The executive orders also demonstrate the sensitivity of the Tinubu administration to the predicament of the manufacturing sector amid overwhelming headwinds and hassles to real sector activities in the Nigerian economy,” CPPE said.

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