Nigeria approves taxes in 2023 fiscal policy measures

Nigeria's newly introduced 2023 Fiscal Policy Measures and Tariff Adjustments have come under scrutiny from Taiwo Oyedele, the Fiscal Policy Partner and Africa Tax Leader at PwC Nigeria. Oyedele believes these policies should be suspended and revisited due to the adverse impact they could have on businesses and the country's economy. In a recent interview with CNBC Africa, he highlighted key issues with the implementation of these policies, calling for a more thorough stakeholder engagement and impact assessment before moving forward. The Fiscal Policy Measures for 2023 include supplementary protective measures aimed at protecting the local economy with high import duties, despite questionable decisions like imposing high import duties on items such as electric generators and fabric, which are essential for businesses in a country plagued by unreliable electricity supply. Another concerning aspect is the revised excise duty rates, with increases ranging from 20% to 100% on items like tobacco, alcohol, and wine. Oyedele emphasizes that these increases come at a time when the Nigerian economy is facing challenges such as slow growth, high inflation, and high unemployment rates. He warns that pushing for more revenue through increased taxes could lead to the shrinking of sectors, ultimately resulting in losses for the government. Oyedele urges the government to reconsider the timing and impact of these policies, suggesting that they may be more suitable for the incoming administration to handle. He emphasizes the importance of evidence-based policymaking and consultation with stakeholders to ensure that policies do not inadvertently harm sectors of the economy. While some larger companies may be reporting strong financial results, Oyedele points out that the majority of sectors in Nigeria, such as manufacturing, agriculture, and services, are struggling. He cautions against using the performance of a few successful companies as the basis for broad policy decisions that could have negative consequences for the overall economy. Oyedele also raises concern about the introduction of green taxes and the legality of such measures, noting that careful consideration and national interest alignment are crucial in implementing such policies. Overall, he stresses the need for policymakers to assess the ripple effects of their decisions across the entire value chain, from farmers to households dependent on affected industries. In conclusion, Oyedele calls for a more comprehensive review of the 2023 Fiscal Policy Measures to avoid unintended consequences and ensure the long-term sustainability of Nigeria's economy.