NECA rejects 0.5 per cent profit after tax on private companies to fund new bill
The Nigeria Employers’ Consultative Association (NECA) has rejected the planned 0.5% profit after tax on companies by the National Assembly to fund the establishment of the new federal competition and consumer protection bill.
NECA argued that the new bill would add to the tax burden of the already existing number of taxes and levies imposed on enterprises from the local and Federal Government levels and that may hinder business growth and limit ability of businesses to create jobs under the fiscal framework.
Describing the surreptitious insertion as a fraudulent act, the body called for the removal of the additional tax, noting that the private sector is not ready pay an unnecessary additional levy or tax.
While NECA implored government to fund the agency from the existing fiscal framework, NECA in a statement, urged President Buhari to withhold assent to the Federal Competition and Consumer Protection Bill 2016 in the interest of the economy and sustainable development of the country, adding that the bill should be sent back to the National Assembly for proper procedural compliance.
The statement read in part: “The truth is that enterprises and businesses are being unwittingly strangulated by a hostile, unfriendly and very unreasonable tax and levy regime. The unfortunate thing is that the trend has continued as evidenced from the recent Federal Competition and Consumer Protection Bill submitted by the National Assembly to the President for the latter’s assent. Some retrogressive forces have gone behind the stakeholders after the public hearing on the bill to insert a 0.5% tax on companies to fund the establishment of a planned Commission/Agency that will undertake responsibilities under the law”.
“While the private sector welcomed and, in fact, actively supported the introduction of a dispensation where an Institution will exist to promote fair, efficient and competitive markets in the Nigerian economy, at no time, during the public hearing on the Bill, did we discuss the imposition of 0.5% profit after tax on all companies operating in Nigeria, as a source of funding the Commission.
“This provision was not contained in the draft bill that was exposed to the public. So, what could have been the source of this obnoxious provision that seeks to further drain life out of a struggling and comatose private sector that is still labouring under the unbearable weight of multiple and overlapping taxes and levies? This surreptitious insertion is a fraudulent act, which we seriously frown at.
We do not support it. We will not accept it. If not removed, it may signify the death knell for this intended dispensation, as the private sector will not pay an unnecessary additional levy/tax. We implore Government to fund this Agency from the existing fiscal framework.”
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