The Lagos Chamber of Commerce and Industry (LCCI) on Tuesday urged the Federal Government to tread cautiously in raising tax rates in an attempt to shore up its revenue in 2023.
Dr Michael Olawale-Cole, President, LCCI, gave the charge at the chamber’s second quarter state of the economy conference held in Lagos.
He suggested that rather than increase taxes, government should explore new ways of rescuing some tax expenditures to raise its revenue.
According to him, leaving the tax rates at their current levels will not lead to loss of revenue against what is proposed in the Finance Bill 2022.
He said based on feedback from operators in the oil and gas sector and the wider business community, the chamber recommended the retention of the Tertiary Education Tax rate at 2.5 per cent.
He noted that at government’s proposed increase to 3 per cent, Nigeria’s corporate income tax rate would effective rise to about 36 per cent; one of the highest rates in the world.
Olawale-Cole urged the Federal Government to retain the 30 per cent Company Income Tax for all oil and gas companies.
He said government should also consider amending the Petroleum Profit Tax Act with the same provisions in the Petroleum Industry Act 2021.
He noted that with divestments by some large corporations from Nigeria’s oil and gas sector, government needed to reposition the industry through a steeply implemented PIA to pave the way for new investments.
He added that gas flare-out projects should be supported with the right incentives to ensure monetisation of the resource for the benefit of the economy.
“We recommend that finance bills are presented for extensive stakeholders’ consultations before the National Assembly passes them into law.
“The LCCI will continue to work toward rallying the private sector to support the implementation of the 2023 federal budget.
“On achieving revenue targets, Ministries, Departments and Agencies and government-owned enterprises can intensify their revenue mobilisation efforts in an enabling environment where the private sector thrives.
“To achieve the laudable objectives of the 2023 budget, we urge government to sustain current efforts toward the realisation of crude oil production and export targets.
“This it could do by strengthening the investment-friendliness of the oil and gas industry,’’ the LCCI president said.
On Naira redesign and circulation, Olawale-Cole advised the CBN to obey and to implement to the letter, Supreme Court’s judgment that allowed old notes as legal tender till Dec. 31.
He stressed that lessons learnt in the aborted implementation of the policy should be used to prepare for a more improved and hitch-free implementation with necessary infrastructure put in place for a truly cashless economy.
The LCCI also noted that government, being the biggest spender, should establish a cashless payment for all its procurements with more automation of its services.
“With more automation and less human interface, corruption tendencies will reduce.
“We commend Federal Government’s planned policy that all payments from the public treasury beyond the threshold approved for daily cash limit by the CBN must be done electronically with effect from March 1.
“The implementation of this policy and the strict monitoring of it can be very effective in deepening a cashless economy,’’ Olawale-Cole said.