…it spells doom and disaster for the country -OPS
The recent prescription of the International Monetary Fund, IMF, to the Federal Government to increase taxes in order to reduce borrowing has been rejected by the Nigerian Organized Private Sector, OPS.
If the toxic prescription, is accepted by the government it will spell disaster for the country, the OPS says.
Specifically, the OPS warned that such advice would kill struggling businesses across the country and worsen the level of poverty in Nigeria.
OPS also reiterated that the $800million loan to serve as palliatives, ahead of the planned removal of subsidy, was not necessary, but the government should give attention to fixing the nation’s refineries, with a view to making them operational before the removal of petrol subsidy.
OPS comprises the Manufacturers Association of Nigeria, MAN; Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture, NACCIMA, Nigeria Employers’ Consultative Association, NECA, Nigeria Association of Small Scale Industries, NASSI, and Nigeria Association of Small and Medium Enterprises, NASME.
The IMF had at the just-concluded IMF/World Bank Spring meetings in Washington DC, on Thursday, repeated its advice to Nigeria to, among others, increase taxes and reduce the country’s debt burden.
It also stressed the need for Nigeria to remove the petrol subsidy and redirect such funding to targeted subsidies on critical development drivers, such as health and education.
“Countries tend to reduce taxes during economic lull but increase the same during a boom. Unfortunately, we are not in the latter position. Any attempt to consider tax hike would create more burdens on tax payers.
‘’It may defeat any attempt to widen the tax net as taxpayers would consider tax avoidance measures. There will be massive capital flight, and the drive for direct foreign investment could be defeated.
“Government should consider widening its tax net as we had posited on many occasions and at various forums. We support the IMF’s recommendation to the federal government to consider widening its fiscal net.
‘’It is the way to go. In addition, one of the problems government at all levels in Nigeria has is the rising cost of governance. If the cost of governance can be addressed decisively, it has the tendency to reduce borrowing since recurrent expenditure would automatically decrease.
“We want to reiterate that the $ 800 million loan to serve as palliatives, in view of the planned removal of subsidy, is not necessary. The government must give attention to fixing the refineries and making them operational in the coming months before the removal of the petrol subsidy.
‘’Already, experts and the polity at large have frowned on the loan facility and have proposed definitive approaches, including fixing the refineries and investigating without delay the subsidy regime, with a view to exposing the alleged corruption associated with it. This should not be a difficult thing for the government to do,’’ OPS stated.
