The Manufactures Association of Nigeria (MAN) has commended President Bola Tinubu for his signing of Executive Orders which the association said will obviate the existential threat to the manufacturing landscape
According to a statement signed by Segun Ajayi-Kadir, director –general it is worthy of commendation that President Bola Ahmed Tinubu took due and far-sighted notice and consideration of the concerns raised by members of the association.
“ In keeping with the trend of positive policy initiatives that we have seen with his administration, the four executive orders released has put paid to the anxieties of manufacturers in the affected sectors in particular and operators in the expansive value chain in general.”
“The suspension of the obnoxious aspects of the 2023 Fiscal Policy Measures, which arbitrarily imposed additional tax burden on the manufacturing sector, is a welcome development and has removed a looming clog on its operations and productivity,” he said.
He stated that manufacturers in the affected sector are pleased and we can now reconnect with our projections and plans made in the beginning of the year. “We expect that the Customs Service will now stand down the requirements for compliance with the excise escalation and the registration for the green tax”.
Going forward, he stated that MAN will continue to value fruitful dialogue and engagement with the government, with a view to improving the manufacturing environment in particular and the economy in general.
He stated further that the sector is already strained by several familiar challenges, including high interest rate and inadequate long-term fund, poor infrastructure, low demand for locally manufactured products, high energy cost in the face of low energy supply, multiple taxation etc.
“We look forward to further engagements that will give fillip to the new policy measures President Tinubu has enunciated, so that the challenges that would emerge could be effectively mitigated. For instance, one can see the possibility of inadequacy of forex and a lot of pragmatism is needed to ensure a massive inflow and strategic release.”
“While realising that Government needs funds, it is advisable that it focuses on expanding the tax base by developing a strategic framework that will bring a substantial number of taxable individuals and businesses that are not in the tax net into the fold. The pursuit of tax increments on already tax-burdened industries is inimical to the growth of the manufacturing sector and not in the overall interest of the citizens who are the ultimate consumers.”
He said: “Let us situate this development in its historical perspective. The last administration had revised upward the excise duty as contained in the 2023 fiscal policy measure without any impact assessment and adequate consultation with stakeholders in the manufacturing sector.”
Some of the added tax burdens in the 2023 fiscal policy measures are the arbitrary introduction of a green tax and the escalation of the excise duty on alcoholic beverages, wines and tobacco in violation of subsisting government approved roadmap.
These clearly contradicted government’s commitment to maintaining policy stability to boost investment and enhancing business confidence in the manufacturing sector. We indicated that the policy is an additional burden too high to bear, as we were also struggling with low patronage, high borrowing cost, and huge energy costs in a highly inflationary environment.
So, the unwarranted and clearly disingenuous escalation of excise and introduction of new taxes in the 2023 Fiscal Policy Measures had the potential impact of truncating the business projections of producers and assaulting the purchasing capability of the average Nigerian.