Tinubu Suspends Finance Act, halts 5% Excise Tax On Telecoms

President Tinubu also 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 and also in line with the National Tax Policy.

He said, “The second one is the Customs, Excise Tariff (Variation) Amendment Order, 2023, which shifts the commencement date of the tax changes from March 27, 2023 to August 1, 2023 and also in line with the National Tax Policy.”

“The other Executive Order signed by the president suspends the 5% Excise Tax on telecommunication services as well as the Excise Duties escalation on locally manufactured products.

“The last Executive Order also suspends the newly introduced Green Tax by way of Excise Tax on Single Use Plastics, including plastic containers and bottles.

“Tinubu also ordered the suspension of Import Tax Adjustment levy on certain vehicles.”

Alake explained that this is in the president’s commitment to creating a business-friendly environment.

He said: “As a listening leader, the President issued these orders to ameliorate the negative impacts of the tax adjustments on businesses and chokehold on households across affected sectors. His Excellency will not exacerbate the plight of Nigerians.”

According to him, President Tinubu’s intention is to listen to the concerns of the Nigerian people and alleviate the negative impacts of the tax adjustments, rather than exacerbate the challenges faced by the citizens.

He further explained that the decision is in fulfilment of President Tinubu’s promise to address business unfriendly fiscal policy measures and multiplicity of taxes.

‘President committed to reviewing complaints about multiple taxes’

He reiterated the President’s commitment to reviewing complaints about multiple taxation, local and anti-business inhibitions.

He assured that the Tinubu administration will continue to give requisite stimulus by way of friendly policies to allow businesses to flourish in the country.

He said the l President assured Nigerians that there will not be further tax raise without robust and wide consultations undertaken within the context of a coherent fiscal policy framework.

He said: “in closing, the President wishes to reiterate his commitment to reviewing complaints about multiple taxation, and anti-business inhibitions. The Federal Government sees business owners, and local and foreign investors as critical engines in its focus on achieving higher GDP growth and an appreciable reduction in the unemployment rate through job creation.

“The government will, therefore, continue to give requisite stimulus by way of friendly policies to allow businesses to flourish in the country.

“President Bola Tinubu wishes to assure Nigerians by whose sacred mandate he is in power that there will not be further tax raise without robust and wide consultations undertaken within the context of a coherent fiscal policy framework.”

According to him, some of the problems identified with the tax changes include the 2017 National Tax Policy approved by President Muhammadu Buhari’s administration, prescribing a minimum of 90 days’ notice from the government to tax-payers before any tax changes can take effect.

“This global practice is done with a view to giving taxpayers and businesses reasonable time to adjust to the new tax regime. However, both the Finance Act 2023 and the Customs, Excise Tariff Order 2023 did not give the required minimum notice period, thus putting businesses in violation of the new tax regime even before the changes were gazetted.

‘Businesses face rising costs’

“As a result of this, many of the affected businesses are already contending with the rising costs, falling margins and capacity underutilization due to the various macroeconomic headwinds as well as the impact of the Naira redesign policy,” he said.

He also noted the Excise Tax increases on tobacco products and alcoholic beverages from 2022 to 2024, which had already been approved, are also being implemented.

The Presidential spokesman maintained that a further escalation of the approved rates by the current administration presents an image of policy inconsistency and creates an atmosphere of uncertainty for businesses operating in Nigeria.

“The Excise Tax of 5% on telecommunication services has generated heated controversy. There is also a lack of clarity regarding the status of this tax, just as players in the sector also complain about the imposition of multiple taxes on their operations.

“We have also seen that the Green Taxes, including the Single Use Plastics tax and the Import Adjustment Levy on certain categories of vehicles require more consultation and a holistic approach to the country’s net zero plan in a manner that does not impact the economy negatively.

“In his inaugural speech, His Excellency, President Bola Ahmed Tinubu promised to address business unfriendly fiscal policy measures and Prultiplicity of taxes.”

He explained that it was in fidelity to the pledge to put Nigerians at the centre of government policies that President Tinubu signed the executive orders.

Reacting to a question on whether the President’s action would affect the Petroleum Tax and if new taxes would be introduced, the Special Adviser on Revenue, Mr Adedeji, said that the intent of the President was to lighten tax burdens, harmonise and manage already existing taxes in the best interest of Nigerians.

“As you rightly said that there’s a plan or possibly proposal for Petroleum Tax, if you look at the current price templates, that has already been included, so this suspension has nothing to do with that. So the pricing structure that you have for PMS today, all those have been included, there are no new taxes that we’re bringing in.

“Like my colleague has said, one of the key focuses of this administration is to harmonise our taxes, the way we collect it. Mr. President actually wants to simplify and make it friendly to business, the way we operate taxes in Nigeria. As we know, when we talk about revenue management, it’s not only in tax collection, the starting point is our economic policy because our aim is not to tax poverty.

“Our aim is not to tax production. Our aim is to increase our productive activities, and capacity to produce, then we can tax our consumption and that is the direction of our economic planning and then we want to increase the trust that we have in the government. If you have observed what has happened in the last months that we’ve been here, we’ve kept our words, part of what we are doing today, just to increase this trust that we’re here to do what’s best for the country.

“Lastly is that we have a robust plan to improve our collection management, the compliance management, because that is what is needed. So we’re not going to impose new taxes, it’s the one that have that we’ll improve the collection, the management and the efficient use of those resources.

“That is the pledge and promise of Mr President, which we’re here to make sure comes to reality,” he said.
Reacting to a question on whether the President’s action would affect the Petroleum Tax and if new taxes would be introduced, the Special Adviser on Revenue, Mr Adedeji, said that the intent of the President was to lighten tax burdens, harmonise and manage already existing taxes in the best interest of Nigerians.

“As you rightly said that there’s a plan or possibly proposal for Petroleum Tax, if you look at the current price templates, that has already been included, so this suspension has nothing to do with that. So the pricing structure that you have for PMS today, all those have been included, there are no new taxes that we’re bringing in.

“Like my colleague has said, one of the key focuses of this administration is to harmonise our taxes, the way we collect it, Mr. President actually wants to simplify and make it friendly to business, the way we operate taxes in Nigeria.

‘’As we know, when we talk about revenue management, it’s not only in tax collection, the starting point is our economic policy, because our aim is not to tax poverty.