NESG Commends 2021 Finance Act, Seeks Implementation to Boost Annual Budget

The Nigerian Economic Summit Group, (NESG) has commended the 2021 Finance Act as it enhances non-oil revenue and supports the implementation of Nigeria’s annual budget.

This was stated by Laoye Jaiyeola, the CEO of the NESG, who was represented by a Board member of the NESG, Nnanna Ude, during a webinar on ‘Impact Assessment of 2021 Finance Act The Fiscal Policy Roundtable the NESG’.

Jaiyeola said the Fiscal Policy and Planning, Trade Investment and Competitive Policy Commission of the NESG organised the event in order to address the impact of the 2021 Finance Act on the macro and micro economy of the nation.

He also explained that the primary objective of the 2021 Finance Act is to enhance non-oil revenue and support the implementation of Nigeria’s annual budget and that the Act addresses critical areas including fiscal policy, domestic mobilisation, tax administration, financial sector reforms and public financial management, noting that the 2021 Finance Act will accelerate non-oil revenue generation and help close the widening fiscal gap.

Jaiyeola posited that the 2021 Finance Act poses “a dilemma on how much tax revenue can be raised without a deleterious impact on households and that it introduced some tax increases that may be burdensome for individuals businesses”, and that impact assessment of the 2021 Finance Act with the aid of evidence-based advocacy to assess the impact on households, sub-sectors and its wide economic impact will aid the identification of crucial bottlenecks while articulating an action plan that will assist the implementation of the Act.

On his part, the thematic lead, Fiscal Policy and Planning, Trade Investment and Competitive Policy Commission of the NESG, Taiwo Oyedele, explained that the fiscal landscape must be seen from the perspective of public debt, public revenue and public spending, adding that Nigeria’s debt is growing faster than her revenue.

Oyedele highlighted that Nigeria’s tax base is small and faces structural problems, but policies must be instituted to solve the issues by ensuring appropriate fiscal policy responses and review of extant laws while encouraging growth and raising revenue.

The president of the Manufacturers Association of Nigeria, MAN, Engineer Mansur Ahmed, during the panel discussion, pointed that it is needful to put short-and long-term considerations into the implementation of the 2021 Finance Act.

Ahmed maintained that the need to balance revenue mobilisation alongside tax burden on taxpayers and that for government to improve revenue, there is a need to critically analyse the fiscal space with consideration of Nigeria’s tax net not broad enough to ensure that taxable people pay the right amount of taxes as at when due.

“The finance act 2021 introduced technology for tax collection. It must be implemented so that taxpayers don’t see it as an additional burden, and stakeholders should be sensitized, helped or exempted, particularly small and medium scale businesses.

“Regulators should become more effective and help promote the growth of relevant sectors and should not see themselves as gate-keepers of incentives but help ensure that the implementation of the Act does not hamper small businesses.

“The manufacturing and industrial sectors should be supported to strengthen their capacity and competitiveness, especially considering the African Continental Free Trade Area (AfCFTA)”, he stated.

On his part, the Vice President and Managing Director of Coca-cola Nigeria, Alfred Olajide, stated that all arms of government have to collaborate in attracting foreign and local investors.

Olajide cited that sections of the 2021 Finance Act, including the Excise duties, are targeted at production, as opposed to consumption.

Meanwhile, the President of the Nigeria, NLC, Comrade Ayuba Wabba, who was represented by Head, Research Department, NLC, Dr Onoho’Omhen Ebhohimien, asserted that subsidy on petroleum products ought to be provided to firms that would reduce production costs, and then passed on down to encourage consumption, but that is not the case in Nigeria due to several factors including the fact that Nigeria imports petroleum products which makes the country subject to the volatility of the foreign exchange market.

“Insurance of the petroleum products, the vessels and freight charges make up 74 percent of petroleum subsidy in Nigeria. Every barrel of crude oil contains 1,500 bye products.

“We export the crude and import only six refined products. The theory of subsidy is not sustainable”, Wuba added.

Temi Popoola, the Chief Executive Officer, CEO, Nigeria Exchange Limited, hinted that the 2021 Finance Act currently helps the government in diversifying its resources.

Popoola stated further that it has helped provide clarity, strengthen the capital market and eliminate double taxation.

He stressed that the Act has helped boost investor confidence, but it still has the potential to stifle investors, which may create long-term problems.