Apparently worried by the potential negative implications of raising the company income tax (CIT) and the Value Added Tax (VAT) by the Federal Government on businesses and commercial activities in the country, the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture has advised the government to reduce CIT to 19% and VAT to 7.5% in order to sustain the nation’s economic growth.
The President of association, Mr. Dele Oye, gave this advice in a report titled ‘Options for Economic Reform and Consequences for The Medium-Term Expenditure Framework for 2025-2027’ made public on Sunday.
Specifically, the industrialist stated that the organized private sector group (OPS) believes that corporate taxes should be further reduced to 19 per cent and VAT pegged at 7.5 per cent in order to grow the economy and boost tax revenues for the government.
He explained that as a means of protecting government revenues, no corporate taxpayer should pay less than its preceding year tax.
The NACCIMA boss noted that the current faceoff between the federal and state governments on the proposed adjustment of tax rate as reflected in media publications attested to the need for the dialogue among the stakeholders to agree on the appropriate tax rates.
He canvassed: “There must be real dialogue with genuine concessions to be made by all parties. The private sector, like aviation, telecommunications, manufacturers, free trade zones, and other stakeholders, must be engaged in written communication.
“For better coordination, the outcome of these engagements can be forwarded to the National Assembly through the Office of the Attorney General as directed by the President”, Oye added.
In addition, the industrialist advised that governments at all levels must understand their role as referees, intermediaries, and facilitators since they are not part of industry players, owners of capital, or benevolent entities.
The industrialist maintained that it remained the constitutional right of taxpayers and citizens to demand for security, utility infrastructure, social services, education, and health as available data globally showed a clear correlation between inflation and government deficits, hence the need small size of government at all levels.
While pointing out that the private sector is not political opposition, the NACCIMA chief stressed that the OPS players have huge invested capital at stake and therefore will continue to express their views on the nation’s fiscal and other policy measures wherever possible to protect their investments.
He expatiated: “It is clear that government borrowing and deficits will be repaid by private sector taxes and levies. Therefore, unless there is a consistent effort to reduce the size of government through technology and policy efficiency, these economic vulnerabilities will drive us further away from a productive, balanced, resilient economy that can thrive independently without excessive borrowing.”
