The most advanced economies in the world share one of several traits: they nurse their private sectors into job-creating behemoths. They encourage businesses to invest and expand through friendly fiscal policies such as lessened corporate tax rates and incentives like tax breaks, leading to job creation.
Simultaneously, business-friendly monetary policies such as lower interest rates make borrowing more attractive, spur investment in the private sector and ultimately create jobs.
Empowering the private sector to create jobs and spur economic growth often involves creating a conducive business environment, implementing effective fiscal and monetary policies, and investing in infrastructure and human capital. On these metrics, President Bola Tinubu’s administration appears to be on a promising trajectory. Appears.
On Thursday, the President signed four Executive Orders, suspending the five per cent excise tax on telecommunication services and the excise duties escalation on locally-manufactured products.
Tinubu also signed the Customs Excise Tariff (Variation) Amendment Order 2023, shifting the commencement date of the tax changes from March 27, 2023, to August 1, 2023, in line with the National Tax Policy. He also ordered the suspension of the newly introduced Green Tax through the Excise Tax of Single-Use Plastics, including plastic containers and bottles. Likewise, he suspended the Import Tax Adjustment levy on certain vehicles.
These orders were meant to reduce the negative impacts of the tax adjustments on businesses and households across the affected sectors.
At a time when many of the affected businesses are contending with rising costs, falling margins and capacity underutilisation due to the various macroeconomic headwinds, Tinubu hopes to give taxpayers and businesses reasonable time to adjust to the new tax regime.
Thursday’s development spurred a collective sigh of temporary relief throughout the business community. Already burdened by the amplified cost of doing business due to fuel subsidy removal, Nigerians needed not be burdened again by the sudden implementation of the new tax regime. They need time to adjust, and the President’s economic team appears to understand that.
However, the suspension of taxes means little if the administration plans to reintroduce the burden later, especially if no exciting incentives are in place before then. Some manufacturers are calling for a total reversal.
Perhaps, no one shares this view more than the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, who called for more waivers, incentives and a reversal of some of the newly introduced taxes to reduce economic hardship.
In the telecoms industry, the President of the Telecommunications Association of Nigeria, Tony Emoekpere, spoke for fellow operators when he said, “It is encouraging to see that the presidency is taking action in that regard (multiple taxation)…We hope that at some point in time, the policy will be totally reversed.”
Consumers are also not impressed with the tax breaks alone. Speaking of some provisions of the Finance Act 2023 and the Customs, Excise Tariff Order 2023, the National President of the National Association of Telecoms Subscribers, Adeolu Ogunbanjo, said, “They should cancel it or repeal it because it has been gazetted already.”
A tax reform committee is designing and coordinating a workable fiscal policy, harmonising taxes and revenue administration. At the end of the day, the Federal Government hopes to boost citizens’ tax morale, foster a healthy tax culture and drive voluntary compliance.
At his inauguration, President Tinubu promised to revamp the economy through business-friendly policies. For small businesses, the administration says it will enable access to single-digit loans “within the shortest time feasible.”
Hopes are incredibly high among investors and business owners.
Why not? After a series of policy missteps that plunged the country into two recessions under former President Muhammadu Buhari, business owners want to breathe. They shouldn’t be suffocated any further.
Does Macky Sall deserve praise for shelving third-term ambition?
As President Tinubu quells a tax crisis at home, his Senegalese counterpart quelled a political crisis at the cost of his presidential ambition.
For me, Senegal was just one of several countries on the west coast until I visited in July 2022. My first culture shock was the relatively “sane” demeanour of the drivers on the highways. No speeding. Patience reigned supreme and road traffic laws were obeyed as though plucked from a holy book.
It was far from what I’d seen back home, where my driving instructor often cautioned me to act like the only sane person behind the wheel. And treat every other driver as “insane” until proven otherwise.
Senegal is often flaunted as one of Africa’s most stable democracies. However, the upheavals of the past two years show delicate fault lines in the country’s fabric.
Behind Senegal’s peaceful cover is a nation merely tolerating its leader and wouldn’t stand him for another term. “Senegal is a democracy without democrats, where the two leaders do not seem to take on board the principles of adversarial debate,” a political science professor, Moussa Diaw, told French Newspaper, Le Monde, last August.
Leaders in French-speaking West Africa have suffered a crisis of confidence in the past few years. Within the past decade alone, they have morphed from stable administrations to regimes surviving on “fiddled” constitutions and military coups. Mali, Guinea and Burkina Faso come to mind. Even President Embalo’s Guinea-Bissau narrowly survived a coup attempt in 2022.
So amidst the pressure, killings and unrest of the past four weeks in Senegal, Sall announced that he won’t seek re-election for a third term in 2024. Thankfully, this doused the tension and earned him the praise of his countrymen and the international community.
On Friday, President Tinubu commended the 61-year-old for “choosing the stability, security, and economic well-being of his people over narrow personal interest.” In some sections of the media, Sall was hailed as a hero of democracy.
However, critics argue that he deserves no praise because it took weeks of violence and deaths to make him back out.
I think the avalanche of praises is essentially part of a political means of massaging Sall into sticking to his decision. For all I know, West Africa cannot afford another Yahya Jammeh moment where a leader who chooses to act in favour of collective peace later reneges on his pledge.
As ECOWAS leaders meet in Guinea-Bissau this Sunday, the outgoing Senegalese President will receive more head rubs and shoulder pats from his counterparts.
Their praises must be laced with friendly warnings to Sall not to change his mind before the next election in February 2024.