Group backs Tinubu on tax reforms
The Independent Media and Policy Initiative (IMPI) has backed President Bola Tinubu’s tax reform efforts saying it would lead Nigeria to the path of inclusive growth.
The chairman of the initiative, Dr Omoniyi Akinsiju, said this at a news conference in Abuja on Saturday.
Akinsiju explained that the tax reform, when applied, would transform into a beehive of economic activities especially in the gas sub-sector .
“Our stance on the tax reforms of President Bola Tinubu administration is that they are necessary to set a country with one of the lowest tax-GDP ratios in Africa at 10.86 per cent on a path of inclusive growth.
“We have reviewed all four tax bills presently before the National Assembly.
“And after a historical and contextual analysis of the bills, we must admit our feeling of dismay at the unwarranted controversy that had been spurned around the bills.
“We consider this a needless distraction away from the economically redeeming attributes of the tax bills.
“These reforms, as coded in the bills are pivoted on three functional pillars of critical growth divers. These are revenue generation, enterprise development, and enhancement of citizens’ purchasing power,” he said.
Speaking on the worry expressed by academic Staff Union of Universities (ASUU) over TETFund finances, Akinsiju said TETfund became a specialised agency because enough allocation was not directed at research and innovation.
He called on the agency and ASUU not to exercise any form of fears as the proposed tax reform aimed at increasing government revenue earnings noting that government would not hesitate to allocate directly to TETFund.
“The basic is that at a point in time in Nigeria, when institutions or agencies are formed to serve targeted segments either of the social realm or in the economic realm or like in this particular case education to ensure proper funding.
“The bills or the act tie the funding to a particular aspect of commercial profits, you know, that’s the tax that’s clearly targeted on that aspect of the national life derived from the profits of a commercial company.
“But the new philosophy is that when you have a large pot and you have so much in it, you do not need to have specific targets from the source of your inflow into that pot.
“It’s better you put everything in the pot and allocate directly. But the argument now is, and it is true, for every percentage of tax you require from a company, you are reducing the profit of that company,” he said.
He said in some ways it also created a hostile economic or business environment because of what could be perceived as overtaxing of profits.
“So when the profits are overtaxed it becomes a disincentive to manage and to run business maximally and optimally,” he explained.
Akinsiju added that the efforts of the government was aimed at reducing the threshold of tax payments so that entrepreneurs could be incentivised to do more.
He said this would also make entrepreneurs to earn more, adding that from whatever percentage they were taxed, they could build more into the coffers of the government as it were.
“We should not look at that tax payment as just purely a percentage of what the businesses are paying. We won’t also forget the fact that businesses are going through turbulent periods.
“We have itemised those challenges. So what this government is actually doing is, rather than take that money from the businesses, government is giving them the money back as a rebate.
“This is as a mitigation ticket for whatever costs that had been added or had been incurred in the course of the business to mitigate whatever you would have been confronted in.
“So can you use that to mitigate your losses in a way or to assuage your challenges? And of course, it also means that more money will come to you,” he said.
He further applauded the presidential approval for the annual recruitment of 30,000 policemen for the next six years.
According to him, Nigeria has not recruited this number in the last 30 years; this will guarantee our peace and security.
Speaking on the fears of the northern region as to the tax reforms, a member of IMPI, Ahmed Sajo, said such such be disregarded
He also advised owners of universities to begin to consider that their primary responsibilities as to ensure that the universities operate optimally.
He added that TETFund was an intervention agency which would not be there forever.
