Bola Tinubu suspends the Finance Act, halting a 5% excise tax on telecoms.

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The President has also postponed the implementation of the 2023 Finance Act, moving the commencement date from May 28, 2023, to September 1, 2023. This decision was made to address concerns raised by businesses and households regarding the tax adjustments. Several taxes, which were introduced through Executive Orders by former President Muhammadu Buhari, have been suspended. These include Corporate Income tax, Import duties, Export duties, Excise duties, Rents, Capital Gains tax, Personal Income tax, Value Added tax, Stamp duties, Property tax, Licenses, Motor Parking fee, Motor Vehicle fee, Withholding tax, Land tax, Market License fee, Road tax, Business Premises, dividend tax, NHIS levy, Advert fee, Regulation fees, and the new NYSC levy.

The Special Adviser to the President on Special Duties, Communications, and Strategy, Dele Alake, announced these suspensions during a briefing at the Presidential Villa Abuja. He emphasized that some tax policies were being implemented retroactively, even before the official publication of the relevant legal instruments supporting them.

President Tinubu also signed the Finance Act (Effective Date Variation) Order, 2023, deferring the changes contained in the Act from May 23, 2023, to September 1, 2023. Additionally, the President signed The Customs, Excise Tariff (Variation) Amendment Order, 2023, shifting the commencement date of the tax changes from March 27, 2023, to August 1, 2023. These decisions were made to align with the 90-day minimum advance notice for tax changes, as stipulated in the 2017 National Tax Policy.

The President’s objective is to create a business-friendly environment and address concerns raised by Nigerians regarding tax adjustments. The administration aims to review complaints about multiple taxes and anti-business inhibitions, providing stimulus through friendly policies to promote business growth and job creation. The focus is on harmonizing taxes, simplifying tax collection, and ensuring a coherent fiscal policy framework.

The President’s actions do not affect the Petroleum Tax, as the current pricing structure already includes it. There are no plans to introduce new taxes; instead, the administration aims to improve tax collection management, compliance, and the efficient use of resources. The goal is to increase productive activities, promote trust in the government, and stimulate economic growth.

The Nigeria Employers’ Consultative Association (NECA) and the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) have expressed support for the President’s Executive Orders, noting that they will relieve businesses of undue burdens. NECA called for further interventions, including reconsideration of the Value Added Tax (VAT) imposition on Automated Gas Oil (AGO).

Overall, these actions are expected to improve the business environment, ease the burden on businesses, and promote sustainable economic growth in Nigeria.

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