THE strategic stakeholders of the Nigerian economy have cried out that the three tiers of government should grant them tax holiday as it would help the ailing sector to heave a sigh of relief from the devastating effects of the Covid-19 pandemic.
The businesses made this call at the 2020 Commerce and Industry Correspondents Association of Nigeria (CICAN) end of year workshop titled, “Effects of Covid-19 on the real sector/SMEs financing,” held recently in Lagos.
In his speech, Mr. Mallinson Afam Ukatu, Chairman, Non-Metallic Mining, Manufacturers Association of Nigeria (MAN), regretted that the Nigerian business environment is becoming more hostile and unbearable, coupled with all forms of levy and multiplicity of taxes.
Ukatu stressed that the hostile business environment is being compounded by the escalating exchange rates, and forex scarcity coupled with the Covid-19 pandemic.
“One of the most challenging is the issue of border closure, which is yet to be appropriately addressed as well as the elimination of payment of multiple taxes which we have been clamouring for. For the country to come out of recession as a country, the government must remove all multiple taxes levied on manufacturers, and all the ministries that are visiting factories with all forms of charges should be cautioned. The government should encourage manufacturers way of formulating policies that is investment-friendly. The government should grant tax holiday to manufacturers during this period of general economic hardship if we must come of recession. They should think of incentives to manufacturers and not exploiting or punishing them with levies and taxes. The government should make low single digit loans available with less bureaucracy if the country must experience growth. Lifting tax burden of the manufacturers will help in creating more employment, thereby lifting jobless youths out of the street,” he stressed.
According to Dr. Adams Adebayo, Chairman, Nigerian Association of Micro, Small and Medium Enterprises (NASME), Lagos State chapter, that small businesses will be the hardest hit from the current Covid-19 pandemic, adding that the bigger businesses have better chances of surviving.
Adebayo said, ‘Nigeria has been reported to be at risk of a serious demand-supply crisis and faces possible domestic scarcity and loss of N2.27 trillion in the trade from its top five import countries. Four of Nigeria’s top trading partners and import sources including China, USA, Spain and Netherlands that account for 45 percent of Nigeria’s imports, are all battling Covid-19 and strategising solutions to recover their badly hit economies.”
In his remarks, the President of Association of Bureaux De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe, has highlighted steps to achieve a virile real sector growth in Nigeria, saying that the Nigerian business environment is becoming more hostile and unbeatable.
He pointed out that for Nigeria to come out of recession, the government must remove all multiple taxes levied on manufacturers, advising that the economic managers also encourage manufacturers by way of formulating investment friendly policies.
“The government should grant tax holiday to manufacturers during this period of general economic hardship if we must come of recession. They should think of incentives to manufacturers and not exploiting or punishing them with levies and taxes. The government should make low single digit loans available with less bureaucracy if the country must experience growth,” he advocated.
Reacting, the Acting Director-General of MAN, Ambrose Oruche, said the policies formulated to drive manufacturing in the country are not supportive, expressing his doubt if the sector would be out of doldrums by 1st quarter of 2021.
He pointed out that having penchant for foreign goods would make locally made goods struggle as soon as the African Continental Free Trade Agreement (AFCFTA) kicks off next year.
Also speaking, Director General, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Ambassador, Ayoola Olukanni, noted according to the Nigeria Bureau of Statistics (NBS), the growth rate of National Output stood at negative 3.62 per cent as at the third quarter of 2020, stating that the inflation rate stood at 14.23 per cent as at October 2020.
He said the unemployment report of the 2nd quarter, 2020, showed that 21.8million Nigerians were unemployed, out of a labour force of 80.2 million Nigerians.
He said policies must be implemented to improve ease of doing business and reducing the cost of doing business, especially for SMEs which makes about 48 per cent to the national GDP and provides about 84 per cent employment according to various studies. “Implicitly, our SMEs which are the private sector operators are the bedrock of our economy and we must do all we can to support them, not just to survive but flourish as we consider strategic options out of recession hopefully by first quarter of 2021,” he stressed.