The Organized Private Sector of Nigeria warns that President Buhari may be endangering productivity by scaring investors through its policies.
The group said this in response to the signing of the Finance Bill into law by the President in Abuja.
The law changes the classification of organizations for the aim of taxation. It hikes the Value Added Tax rate to 7.5%, up from 5%. It classified small companies as those with a turnover of up to N25 million and can be exempt in paying tax whereas, medium corporations with turnovers higher than 100million pay 20% of their profit as tax whereas giant corporations with a turnover of over 100million will pay 30% tax.
The Nigeria Employers’ Consultative Association (NECA) also warned the government against milking the private sector of their cash as they are no cash cows. It said the drive to increase the government revenue should not hamper individuals or groups.
Concerning the same issue, the Lagos Chamber of Commerce fears that the increase in VAT is inappropriate.
The overburdening of the private sector through any means, like taxation would further impoverish the citizens. The average persons in the country will always be at the receiving end of these policies as businesses are forced, if taxed more, to naturally pass the cost to their customers.
As a solution, the government is advised to drastically cut down the cost of governance, as a large chunk of its generated revenues do not even find its way into the coffers.
Also, the government is encouraged to scale up its commitment to the creation of an enabling environment for investment, rather than stifling the policy and regulations.