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Manufacturers Oppose FG’s Planned Increase in Taxation and VAT

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  • Manufacturers Oppose FG’s Planned Increase in Taxation and VAT

Manufacturers and providers of goods and services under the aegis of Nigeria Employers’ Consultative Association (NECA) Wednesday expressed their opposition to the plans by the federal government to increase taxation, including the value added tax (VAT).

NECA also called on the federal government to address the nation’s infrastructure deficit before the take-off of the African Continental Free Trade Area (AfCFTA).

It lauded the signing of the agreement by President Muhammadu Buhari, saying the trade pact could enhance capital inflows into the country.

It also warned that AfCFTA could harm the country’s economy in view of what it described as the variables of Nigerian businesses and industry.

Speaking after leading a delegation of NECA to a meeting with President Buhari in the State House, Abuja, NECA’s Director-General, Timothy Olawale, said members of the delegation told Buhari that increasing tax this period would increase the burden of companies which were already paying more than they could bear.

Besides, he said increasing VAT now would further impoverish the poor.

A former Minister of Finance, Mrs. Zainab Ahmed, had said in June that the federal government was planning to increase VAT to 7.5 per cent from the current five per cent by 2020.

She said the increment would help the federal government to shore up falling revenue.

But Olawale said the delegation told the president that instead of increasing any tax rate, efforts should rather be geared towards broadening the scope of tax collection by going after 65 per cent of the citizenry who do not pay tax.

He said if at all VAT would be increased, the increase should be targeted at luxury goods and opulent people and not the masses.

“Basically, what we told the president is what we have repeated over and over again in the public domain, that rather than any increase in taxation because as it is, organised businesses are already being overburdened with all sorts of taxes and levies; as a matter of fact, we have calculated 105 different taxes and levies we are paying as we speak, which is cumbersome and burdensome.

“So, we had advised that rather than resort to any form of increase in taxation, what government should be looking at is putting mechanism in place to widen the tax net in such a way that almost 65 per cent of non-compliant taxpayers are captured in the tax net. That way, more revenue will accrue into the coffers of the government. We specifically also voiced our concern with the suggestion and proposal out there that value added tax should be increased.

“We have advised government that if it comes to be, it will reduce the purchasing power of Nigerian workers as well as the poor masses that the president, as we know, is working hard to improve their lot. We are saying that if government must as a matter of an avoidable necessity increase VAT, it should target luxury goods as well as the extra affluence in the society, not the poor masses or consumption goods and services that are for the benefit of the masses,” he said.

On AfCFTA, Olawale said whereas the agreement was laudable and could enhance capital inflows into the country, it could also harm the country’s economy in view of what he described as the variables of Nigerian businesses and industry.

He listed such variables to include poor infrastructure deficit, which does not make Nigerian goods and services competitive.

According to him, to save the country’s businesses from chaos, the government must address the lingering challenges, otherwise, companies that are already struggling will eventually fold up when the implementation begins.

“We don’t want a situation where our businesses are not competitive due to the disadvantaged environment in which they operate. Of course, we are all familiar with the disadvantaged environment with regards to the issue of agriculture among which is power and the issue of road network, that is transportation of goods and services and accessibility to the different business environment.

“What we are saying is that if all these issues are not addressed properly, to make our businesses competitive, definitely we are going to be at the receiving end, to the extent that our nation will become a dumping ground. And even some of the factories that are even struggling presently may end up folding up. Of course, we know the history of the textile sector and that can be replicated in any sector and we don’t want us to get to that extent.

“That is why we are saying government should put mechanism in place to address these issues so that we can be competitive and so that we can take our rightful place and maximise the benefits of the Africa Continental Free Trade Area (AfCFTA) agreement,” Olawale added.

On the level of compliance of NECA with the new Minimum Wage Act, which jacked up minimum wage in the country from N18,000 to N30,000, Olawale said already 70 per cent of members of NECA were paying above N30,000 before the law was made and there was nothing to worry about on compliance with the law.

Responding, Buhari told the NECA delegation that federal government’s policies would be designed to support exportation more than importation, assuring them that the implementation of AfCFTA would be devoid of crisis.

Buhari also told the group that he agreed with members of the delegation that there are challenges that need to be fixed, pledging that such challenges will be addressed with a view to putting in place the mechanism for the success of Nigeria’s businesses.

He urged the delegation to be patient and show understanding and simultaneously engage the federal government by giving it what he described as “constructive and honest feedback.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Experts to Provide Insights on Tech & Digital Transformation at MSME Dialogue 3.0

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The third edition of MSME Dialogue will take place on Saturday, April 24, 2021 at 10am (WAT). Experts at the virtual event will provide insights while discussing the theme: Powering MSMEs with Technology and Digital Transformation.

The event, which is organized by MSME Africa, is expected to have owners and managers of Micro, Small and Medium Enterprises, Entrepreneurs and Business owners from different sector in attendance.

MSME Dialogue which holds every quarter, seeks to address, burning and relevant  issues about entrepreneurship and running a small business as well as proffering solutions to those issues.

The event aims to provide the right knowledge and know-how for MSMEs, Entrepreneurs, and Startups to enable them to grow and thrive and features subject matter experts, seasoned entrepreneurs, professionals, and players within the MSME Ecosystem.

The speakers expected at the event are: Akeem Lawal, Divisional CEO, Interswitch Group, Rex Mafiana: CEO, FPG Technologies, Fatma Nasujo, Global Head of Operational Excellence at Sokowatch, Kenya, David Lanre Messan, CEO, FirstFounders, Bisoye Coker, CEO/Co-founder, Kiakia FX. The session will be moderated by Solape Akinpelu: CEO/Founder, HerVest.

According to the convener of the event who is also the founder of MSME Africa, Seye Olurotimi “Every business owner who is serious with their business would agree with me that technology and digital transformation are important factors for business growth and success. We all can’t all run or won Tech startups but we can always drive our businesses and operations with Technology and Digital Tools”

“Tech-driven Businesses are making waves and turning in almost unbelievable results against all odds. Businesses who have embraced technology, automation and digital transformation are enjoying unquantifiable advantages. It is because of this that I am calling on business owners and managers to join us at the 3rd Edition of MSME Dialogue, on Saturday April 24, 2021 at 10am ( WAT), as we bring in experts to provide insights on this theme” Olurotimi added.

MSME Africa is a multi-faceted resource platform for Micro, Small, and Medium Enterprises (MSME) in Africa providing capacity development, news, opportunities, business articles and other resources for MSMEs, entrepreneurs, and startups.

Olurotimi said the platform was poised to build the biggest network and community of MSMEs in Africa in the nearest future.

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Ericsson Launches Automation Hub in Nigeria

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Ericsson announces plans to create an Automation Hub in Nigeria to support operators for improved consumer experience.

Ericsson Automation Hub is an open innovation platform, inspired by lean startup methodology in which the Ericsson team works in close dialog with customers, users and partners to showcase and reach the high potential that network automation allows in configuration, provisioning, assurance and orchestration of network services.

This will enable service providers to gain the ability in their environments to govern, manage and orchestrate hybrid networks holistically and in real time and as a result, offer an enhanced consumer experience.

Fields to be covered include but not limited to 5G and Internet of Things (IoT) use cases, Network Slicing and Orchestration, Hologram Calls, Complex Standalone, Business Support System (BSS) and Operations Support System (OSS), Cloud and Core product cases, Automated Acceptance Tests demonstration and enhancements as well as complex charging scenarios for 5G and 4G networks.

Lucky La Riccia, Vice President and Head of Digital Services at Ericsson Middle East and Africa at Ericsson says: “As Industry 4.0 accelerates in Africa, automation in operations is proven to boost customer experiences. Ericsson continues to support the telecom industry players in setting #AfricaInMotion, and with the Ericsson Automation Hub in Nigeria, we will focus on driving business outcomes for our partners in Africa as they aim to leverage digital transformation to turn complexities into opportunities while offering a greater experience and value to consumers.”

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Chevron To Invest In The Offshore Wind Sector

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Chevron’s venture capital arm and Moreld Ocean Wind have agreed to invest in Ocergy Inc.’s development and commercialization of floating offshore wind turbines.

The investment by Chevron Technology Ventures is it’s first in offshore wind. The size of the investments wasn’t disclosed. Floating turbines would be useful in ocean areas that are too deep for fixed turbines.

A senior analyst at Wood Mackenzie Ltd, Anthony Logan said: “To my knowledge, this is the first investment by a U.S. oil major in offshore wind”

Logan said, floating wind turbines will become important as the U.S. electrical grid increasingly depends on offshore wind power.

“If you can get into those deeper waters, chances are you can build a system of offshore wind production that isn’t vulnerable to low wind or no-wind events.”

The investment will also fund the development of an environmental monitoring buoy that will gather data and support biodiversity, Ocergy said in a news release Tuesday. The company has previously invested in onshore wind. Moreld is owned by HitecVision, a private equity investor that specializes in European renewable energy.

Chevron’s deal with Ocergy doesn’t mark a strategic pivot to renewable energy, but part of a $300 million-a-year plan to invest in early-stage technologies that may play a future role in the energy transition. The company is unwilling to erode returns by investing aggressively in an unfamiliar business where it doesn’t have a competitive advantage and sees oil and gas as its core products for years to come.

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