Mohammed Shosanya
The Nigeria Employers’ Consultative Association,NECA,has cautioned the Federal Government against fresh tax increase,saying the development will bring about negative impact households, individuals and businesses in the country.
Its Director-General, Mr Adewale-Smatt Oyerinde,said the development would only lead to disaster for an economy battling to survive.
Oyerinde’s advise was sequel to a recent recommendation by the International Monetary Fund (IMF) to the government to increase taxes in order to reduce borrowing.
It recently implored the government to reduce its debt by focusing on increasing the tax basket and compliance as a means of generating revenue to cut borrowing.
Oyerinde,in a statement,said the development will spell doom for the country’s
He said: “For a private sector already overwhelmed by multiple taxes, the imposition of additional taxes on services will make the business community more vulnerable with a trade-off on growth and job creation.More taxes, of course, will weaken the purchasing power of individuals and stifle consumption, with attendant consequences for social cohesion.
“It may defeat any attempt to widen the tax net as taxpayers would consider tax avoidance measures.There will be massive capital flight, and the drive for direct foreign investment could be defeated.”
He advised the government to widen its tax net as the association had posited on many occasions and at various forums.
He expressed its association’s support for the IMF’s recommendation to the government to consider widening its fiscal net, saying, it is the way to go.
He added:“In addition, one of the problems government at all levels in Nigeria has is the rising cost of governance.If the cost of governance can be addressed decisively, it has the tendency to reduce borrowing since recurrent expenditure will automatically decrease”
He punctured the $800m loan to serve as palliatives in view of the planned removal of subsidy was not necessary,saying that,, rather, government must give attention to fixing the refineries and making them operational in the coming months before the removal of the petrol subsidy.
He said:“Already, experts and the polity at large have frowned against the loan facility and have proposed definitive approaches including fixing the refineries.
