NECA secures judgment against Customs over additional tax
The Federal Government has told Nigerians to brace up for fresh electricity tariffs in months.

Meanwhile, the Nigeria Employers’ Consultative Association (NECA) has secured a favourable judgment for its members against the Federal Government on the proposed plan to impose additional tax burdens on businesses.

Presidential Special Adviser on Energy, Olu Verheijen, said this in an interview in Dar es Salaam, Tanzania, according to Bloomberg.

Verheijen was in Tanzania for a World Bank-backed conference where Nigeria presented a $32 billion plan to boost electricity connections by 2030. Private investors are expected to contribute $15.5 billion and the rest will come from public sources, including the World Bank and African Development Bank (AfDB).

Last year, the Federal Government approved a threefold increase in electricity tariff for customers under the Band A classification.

The fresh move to raise tariffs comes amid mounting pressure from Nigeria’s debt-burdened electricity distribution companies for tariffs to be cost-reflective so they can improve their finances.

The energy adviser said Nigeria’s power prices need to rise by about two-thirds for many customers to reflect the cost of supplying it.

Higher electricity tariffs, which need to be balanced by subsidies for less-affluent consumers, are required to fund the maintenance needed to improve reliability and to attract private investors into power generation and transmission, said Verheijen.

IN a suit filed in 2022, following a circular from the Federal Government, which proposed to impose additional tax burdens on businesses through the introduction of excise duty on non-alcoholic, carbonated and sweetened beverages, NECA had requested the court to dismiss the case on the ground that the circular was invalid and unjustifiable.

Other defendants joined in the suit include the Minister of Finance and the Minister of Budget and National Planning.

After three years of legal fireworks, Justice O.A Egwuatu of the Federal High Court, Abuja dismissed the 2nd Defendant’s Preliminary Objection for lack of merit. Delivering judgment on the substantive case, the court held in summary that the circular issued by the 2nd Defendant (Federal Ministry of Finance) is invalid and ultra-vires stating that the powers of the 2nd Defendant; and the 1st Defendant (the Customs Service) is not entitled to demand transport and feeding allowances from the plaintiffs (NECA members).

The court further declared that the circular entitled “Approval for the Implementation of 2022 Fiscal Policy Measures and Tariff Amendments,” dated March 1, 2022, issued by the 2nd Defendant (Honourable Minister of Finance, Budget and National Planning) is invalid and ultra-vires the powers of the 2nd Defendant

In his reaction shortly after the verdict, the Director General of NECA, Adewale Smatt-Oyerinde, described the judgment as another victory for organised businesses against official arbitrariness and unfortunate attempts to impose additional burdens on businesses.