NECA, Agents Criticise FG’s Multiple Taxes

Seaport clearing agents and the Nigeria Employers Consultative Association have criticized the Federal Government’s rising taxes on businesses, saying the situation will negatively affect the country.

Due to the newly introduced taxes on food and beverages by the government, they also predicted that Nigeria may witness a hike in illicit importation.

They argued that the tax would likely affect the price of the commodity and make lives difficult for the citizens.

The Tariff Technical Committee of the Federal Ministry of Finance recently announced high taxes on tobacco, wines, spirits and sweetened non-alcoholic beverages.

Reacting to this, the Director General of NECA, Mr Wale Oyerinde, in a recent stakeholders’ engagement, said that the outcome of steep increases like the one being contemplated was that volumes would be drastically lost to illicit players, which would eventually hurt the government’s revenue.

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Explaining further, he said where the excise burden was passed to consumers, thereby significantly increasing the price of cigarettes above those in neighboring countries, consumers’ preferences would shift from the tax-paid market to the alternative markets where taxes were not levied or even to smuggled products.

According to him, “Earlier this year, neighboring countries like Togo and Benin reversed their excise rates (ad valorem) from 150 percent & 100percent respectively to 50percent, so Nigeria could become a more attractive destination for illicit trade. In view of Nigeria’s border situation, limited resources for enforcement and related challenges, the Government does not have the tools nor resources to tackle illicit trade challenges.”

Meanwhile, acting National President of the Association of Nigerian Licensed Customs Agents, Kayode Farinto, said that there had never been any tax on these products and with the coming of the new tax, the cost of products would rise.

Additionally, Nnadi Ugochukwu, a member of the National Association of Government Approved Freight Forwarders noted, “Of course the cost of production influences the availability and induces alternative sourcing. So, if you put a tax on it, the cost of production will increase and it will now affect how available and affordable the goods will be to the people and people will start looking for alternative means which may be legal or illegal.”