The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture has the Nigeria Tax Bill,2024, will stifle the Free Trade Zones in the country.
NACCIMA President, Dele Oye, who stated this at the ongoing public hearing organized by the House of Representatives, on the tax reform bills pending before the parliament, said some aspects of the proposed legislation also infringe on the rights of states.
Oye described Section 57 of the bill as the “most dangerous”, noting that making all companies in the country pay a minimum tax of 15 percent will erode their competitiveness.
He noted that the bill, if passed in its current form, will affect investors’ confidence, stating that some countries are already making overtures to investors in Nigeria.
According to him, the bill seeks to remove tax exemption contained in NEPZA Act ,as well as incentives provided for in the OGFA Act, which would be counter-productive.
“The second situation, which is part two of my submission, sir, is on the general provision of the bill. The bill applies to all of us. Sections three and four seem to raise the issue taxing money with executors.
“Executors only hold inheritance money, and that is something outside the National Assembly purview. It is for the State to determine the issue of estate, and we also have some religious issues related to that under the Companies Act,” Oye argued.
“After today, if this bill is passed, the FIRS can sell your property after 14 days without a court order. That is, if it is not a landed property, charism is not a mandate, property is written under Section 60. It is only landed property. They say they will need a court order. Not only will they sell, they also collect change for expenses. And you know the implication. So, it’s a military bill, sir, the way it’s going. ”
Also, the NACCIMA President noted that “the bill’s provisions imposing several criminal sanctions for non-compliance, particularly in Sections 95-133 HB.1756, should be scrutinized to avoid deterring potential investors. Penalties ranging from 50,000 Naira to 5 million Naira for non-registration, monthly fines and related infractions could be perceived as excessively punitive and should be re-evaluated to ensure they foster compliance rather than fear.”
Similarly, the Corporate Affairs Commission ( CAC), in its presentation, noted that provisions of the Nigeria Revenue Service Establishment Bill, 2024, which merge the office of chairman and Chief Executive Officer of the proposed agency will be counter-productive.
A copy of the CAC presentation obtained by The Sun noted that “this does not augur well for corporate governance as the Chairman does not report to anybody but himself.
“In the private sector, the government promulgated a law that prohibits Chairmen of public companies from doubling as Managing Directors or Chief Executive Officers. This is to promote corporate governance, transparency and accountability. The same government cannot, without strong justification, allow in the public sector what it has outlawed in the private sector.
“It is suggested that the CEO of the Service should be made Executive Vice-Chairman. This will allow for appointment of part time Chairman in line with good corporate and global best practice. It will institutionalize checks and balances,” the CAC stated.
On its part, the Manufacturing Association of Nigeria ( MAN) lauded the bills, and expressed optimism that it will address multiple taxation.
MAN President, Otunba Francis Meshioye, said arbitrary legislation and fees regulatory agencies at different levels, as well as illegal taxes have not been friendly to the economic environment.
“We await the commencement of the implementation of the reforms to compensate for the long-standing challenges of high taxes and other policies that have caused the untimely flow to me. And we hope that this reform will bring about a new dispensation.
“The unappointed reduction in CIT rate from the current 30% to 27.5% in 2025 and 25% in 2026 is commendable. I will fully support this passage. The general trend, truly, all over the world, is the downward move of tax on public income taxes.
“And this will come as a new break in public wages, manufacturing industries, and other businesses in Nigeria. It will also be a way for investors and self-employed governments to commit to reducing the cost of doing business in the country. All of our concerns could be found on Section 16 of the Real Tax Clause,” he said.
