The President of the National Association of Chambers of Commerce and Industry, Mines and Agriculture (NACCIMA), Mr. Dele Oye, has stated that implicit taxes such as security and others that Nigerians pay are far above the current tax rate being charged by the government at all levels.
He stated this while delivering a lecture at the Vanguard Economic Discourse themed, ‘Reforms In The Era of Global Economic Uncertainties: Whither Nigeria?’, where he stated that the current policy actions of the administration are different from what the President outlined in his manifesto during the campaigns.
According to Mr. Oye, decisions such as interest rate hikes by the Central Bank of Nigeria (CBN) contradict the President’s campaigns of cheap access to capital for individuals and businesses.
He stated, “What we mean by implicit tax is, apart from the taxes we pay, there are ones you use to do roads, pay area boys in your area, and have your own security. All of them have to be provided by government. You look at what happened in Okomu- the investors have to pay for their own security after paying billions in tax. So, the implicit tax is far and above the current tax rate. All of us in this room pay it.”
He referenced what players in the oil industry face when oil companies carry out community development activities in their host communities, saying it’s part of government’s responsibilities.
Customs regular changes in exchange rate
Furthermore, Mr. Oye criticised the Nigerian Customs Service (NCS) regular changes in the exchange rate for duties collection and other irregular policies in the country like the expatriate levy and cybersecurity levy.
He also called on the federal government and CBN to act to protect the real sector of the economy and provide support for businesses across the country. He noted that the MPR hiking spree of the CBN in the last five months should have been done immediately after the subsidy on PMS was removed to suck up excess cash liquidity.
What you should know
Stakeholders in the private sector has criticised the federal government and CBN for some of the recent policy actions which include the removal of fuel subsidy, MPR hike, and others.
The Centre for the Promotion of Public Enterprise (CPPE), Manufacturers Association of Nigeria (MAN), and other groups in the private sector have complained about the devaluation of the naira resulting in record level foreign exchange revaluation losses by businesses and organisations in the real economy.
However, the federal government has promised to address these concerns with the launch of CNG vehicles to reduce the cost of transport and N75 billion in single-digit interest loans to the manufacturing sector.