In an effort to boost manufacturing and improve the ease of doing business, President Bola Ahmed Tinubu of Nigeria has signed four executive orders (EOs). The EOs aim to reduce hardship and stimulate economic activities by suspending certain key taxes. The decision was made to align with international best practices, which require a 90-day window for investors before new taxes are introduced. The government intends to consult with stakeholders before implementing any tax adjustments.
The first executive order, called The Finance Act (Effective Date Variation) Order, 2023, defers the commencement date of changes in the Act from May 23, 2023, to September 1, 2023. This aligns with the 90-day notice period for tax changes outlined in the 2017 National Tax Policy. The second order, The Customs, Excise Tariff (Variation) Amendment Order, 2023, shifts the commencement date of tax changes from March 27, 2023, to August 1, 2023. Furthermore, the President has suspended the five percent excise tax on telecommunication services and the excise duties escalation on locally manufactured products. The newly introduced Green Tax on single-use plastics and the import tax adjustment levy on certain vehicles have also been suspended.
The President’s intention in signing these executive orders is to listen to the concerns of Nigerians and alleviate the negative impact of tax adjustments. The government recognizes the importance of supporting businesses and investors as critical drivers of economic growth and job creation. President Tinubu aims to review complaints about multiple taxation and anti-business regulations and implement friendly policies that allow businesses to thrive in the country. The commitment to robust consultations and a coherent fiscal policy framework ensures that tax adjustments will be made with the best interests of the Nigerian people in mind.
Opinion: The signing of these executive orders by President Tinubu reflects a proactive approach to address business unfriendly fiscal policies and provide relief to businesses and investors. By deferring the implementation of tax changes and suspending certain taxes, the government aims to create a more conducive environment for economic activities and attract investments. This move demonstrates the government’s responsiveness to the concerns of stakeholders and its commitment to promoting business growth and reducing the burden on taxpayers.
Harmonizing and managing existing taxes, simplifying tax collection processes, and improving compliance management are positive steps towards creating a more transparent and efficient tax system. The emphasis on productive activities and increasing trust in the government’s management of resources is essential for economic development. It is crucial to strike a balance between generating revenue and supporting businesses to foster sustainable growth and job creation.