Purchasing Power Falls as FG Slams New Tax Law.

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The federal government recently adopted a new tax law that was included in the 2023 Fiscal Policy measures and has been criticized for having the potential to “worsen the economic woes of helpless Nigerians who have to deal with dwindling purchasing power.”

Alcoholic beverages, tobacco, wines, and spirits would be subject to increased excise taxes ranging from 20% to 100% hikes on previously approved rates beginning on June 1, 2023, according to a document signed by Zainab Ahmed, minister of Finance, Budget, and National Planning.The excise duty rate on non-alcoholic beverages is still N10 per litre, nevertheless.

The government opted to top up the hikes in the middle of the implementation, which is extremely unusual considering that these sectors, beverage and tobacco are the largest sub-sector within manufacturing and accounting for about 40% and over the last seven years, the average growth rate had been about 2%.” In fact, last year, there was a negative growth for that sector of course employing millions of people directly or indirectly.

While condemning the decision, the policy analyst described it as ill-timed and not in the interest of national economic growth, stressing that, the policy enactment lacked critical assessment and engagement to ascertain its direct and indirect impact on the entire value chain. “The policy analyst advised that the 2023 Fiscal Policy Measure, be suspended or revisited to avoid negative consequences of the new changes on Nigerians and struggling businesses.

Leadership.

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