The Manufacturers Association of Nigeria (MAN) has commended President Bola Ahmed Tinubu on signing Executive Orders to obviate the looming existential threat on some sub-sectors in the manufacturing landscape.
In the statement signed by the Director-General, Mr. Segun Ajayi-Kadri noted that the President has kept to the trend of positive policy initiatives that we have seen with his administration, the four executive orders released yesterday has put paid to the anxieties of manufacturers in the affected sectors in particular and operators in the expansive value chain in general.
According to him, “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. 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.”
“MAN will continue to value fruitful dialogue and engagement with the government, with a view to improving the manufacturing environment and the economy in general. 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,” he added.
The Association looks forward to further engagements that will give fillip to the new policy measures President Tinubu has enunciated, so that the emerging challenges 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 should focus 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.
It will be recalled that 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 escalation of the excise duty on alcoholic beverages, wines and tobacco in violation of subsisting government-approved roadmap. These clearly contradicted the government’s commitment to maintaining policy stability to boost investment and enhance 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 also assaulting the purchasing capability of the average Nigerian.
