The Nigeria Employers’ Consultative Association (NECA) has called on President Muhammadu Buhari to withhold assent on the 2019 Finance Bill.They also urged him to implore the National Assembly to reconsider the bill with the aim of ensuring continued improvement on the Ease of Doing Business (EODB) initiative of his administration.
In a letter addressed to Buhari, which was sighted by The Guardian, NECA commended government’s initiative on the bill, especially as it would support Small and Medium Scale Enterprises (SMEs) through applicable tax reductions.
They also noted that it would go a long way in lifting a huge percentage of the Nigerian populace out of poverty.But they implored Buhari to decline assent to the bill, saying it would reduce the purchasing power of the citizens. President of NECA, Timothy Olawale, noted that the bill seeks to, among others, amend the Companies Income Act, Value Added Tax (VAT), Customs and Excise Act, Personal Income Tax, Capital Gains Tax, Stamp Duties Act and the Petroleum Profit Tax.
He, therefore, argued that increase in VAT rate from five per cent to 7.5 percent was unacceptable, noting that it was coming at a time when Nigerians were struggling with economic hardships. If allowed, Olawale further argued, the benefits of the recently signed National Minimum Wage of N30,000 would be neutralised.
According to him, it would further reduce the purchasing power of the citizens, leading to increase in price of goods and services, upward movement of the inflation rate and further contraction of the economy.
“This will have an adverse effect on businesses, since the purchasing power of the citizens would have been reduced, sales of goods and services would reduce and inventories for business would be high and could lead to the closure of businesses that ought to be supported by government in reducing unemployment rate in the country,” he said.
On the increase in penalties, the NECA boss said: “We are opposed to the increment in penalties and multiple penalties for offences in the bill. The penalty is punitive. It would negatively affect businesses that are struggling to survive. We suggest that the status quo be maintained.“Tax system should allow for consolidation of liabilities within a specified review period to help the cash flow of companies.”