Analysts have called for the suspension of the Federal Government ’s New Fiscal Policy Measures .The Federal Government (FG) recently released its new Fiscal Policy Measures (FPM) for 2023, in which it introduced various taxes on goods and services. The measures include additional excise taxes on alcoholic beverages, tobacco, wines, and spirits effective from June 1, 2023; and Supplementary Protection Measures (SPM) that are in line with the implementation of the ECOWAS Common External Tariff 2022-2026 and which kick in today May 1, 2023. Experts however point out that the new taxes will increase the burden on already suffering industries and are inconsistent with the previously approved rates per the 2022-2024 Roadmap.
Analysts note that the Green Taxes introduced in the FPM on Single Use Plastics (SUPs) have not been supported by a specific law to provide the legal framework or delegated authority for the imposition of the tax, making them illegal. Analysts believe that the policy inconsistency and lack of engagement with stakeholders demonstrated by the FG, in this case, would serve as a deterrent to existing and intending investors. Local economists also observe that a proper impact assessment ought to have been carried out to determine the impact of the new taxes on affected stakeholders across value chains. The FG has also come under criticism for providing insufficient information on the administration of the new taxes, such as the tax base, compliance timelines, penalties, and detailed regulations to guide the administration of the tax. Given the potential negative consequences of the new changes on people, businesses, and the economy, analysts are of the view that the 2023 FPM should be suspended and revisited only after the government has engaged with the affected industries and other stakeholders to create enabling policies that can support economic growth instead of introducing additional tax burdens. In the meantime, analysts are recalibrating their Inflation outlook. While the suspension of the planned removal of the fuel subsidy is a momentary relief, these new taxes and excise duties would worsen expected inflation and growth projections
