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Tag: NECA

  • IGR: Expand tax net, not VAT, NECA urges govts

    The Nigeria Employers Consultative Association (NECA) has urged state governments to engage in taxpayer enlightenment and expand their tax net to increase their Internally Generated Revenue (IGR).

    The call was made following President Muhammadu Buhari’s advice to states to increase Value Added Tax (VAT) to increase their IGR.

    NECA said increasing VAT at this time was not only misplaced but would further impoverish the citizens the President promised to take out of poverty. To NECA, the step will do more harm to the already burdened private sector.

    Its Director-General, Timothy Olawale, who spoke at the International Labour Conference in Geneva, Switzerland, said  the President meant well by urging states to be innovative in increasing their IGR and prudent in their expenditures. He, however, argued that state governments could not increase VAT without amending the VAT Act at the National Assembly.

    According to him, it is the common man that will be at the receiving end of any increase in VAT.

    “Even if businesses are taxed more through likely illegal levies and rates, outside the provisions of the law, they will naturally pass the cost to the customers whose purchasing power is already at the lowest ebb,” he said.

    Proposing a way out, Olawale said the federal and state governments should engage in an aggressive taxpayer enlightenment and expansion of the tax net to capture more citizens, adding that less than 40 per cent of Nigerians pay tax.

    He suggested that the states should put mechanisms in place to eliminate leakages as a large chunk of the IGR realised did not find their way into the government coffers.

    Olawale advised governors on reduction of cost of governance, saying the retinue of aides kept by them at prohibitive cost to the state was needless.

    “Besides, ingenious idea of corrupt practices in the name of security votes and frivolous foreign travels by state government functionaries are veritable examples of cuttings in avoidable expenses draining state government purses.”

    Olawale, however, opposed the call for state governments to hike VAT to increase their IGR.

    Considering the reported over N2 trillion of bail-out funds to many of the states, it was apt for the President to advise them to be innovative to increase their IGR and at the same time be prudent in their expenditures.

    “However, the call for increase in VAT or any other form of tax as a way to increase IGR at this time is not only misplaced, but will do more harm to the already burdened private sector and further impoverished citizens that the President promised to take out of poverty.

  • NECA urges employers on new minimum wage

    The Nigeria Employers Consultative Council (NECA) has urged employers of labour to implement the new minimum wage of N30,000, which has received President Muhammadu Buhari’s assent.

    Its Director-General, Mr Timothy Olawale said the National Minimum Wage is not a general salary increase, but a wage below which no employer should pay.

    While affirming organised businesses’ commitment to the implementation of the new wage, Mr. Olawale said: “We reiterate the commitment of employers in the private sector to the implementation of the new National Minimum Wage.

    “The wage is not a general salary increase, but a wage below which no employer should pay.

    “As such, employers who are already paying above N30,000 are not obligated to comply. In the same vein, we expect other Social Partners to also respect this understanding, so as not to jeopardise the industrial harmony in the private sector by insisting on implementation by organisations already paying above N30,000.”

    While commending Buhari, Olawale said payment of the new wage should start immediately.

    “Organised businesses wish to commend the president for promptly attending to the National Minimum Wage Bill as sent to him by the National Assembly. It is an indication of the passion and concern of the president for the welfare of the masses and working class in particular. We believe that the implementation date will be the date of assent,” Olawale said.

    Meanwhile, President Buhari at the signing of the bill,  was quoted to have said he expected  workers to be more committed to their jobs.

    “I expect them (workers) to be more committed to their work at whichever level. I will like, with the cooperation of the Nigeria Labour Congress(NLC), to look at the economic situation of the country, the population, the poor infrastructure that we are trying to fix in terms of roads, rail and power.

    So, I wish Nigerian workers the best of luck,” he  said in a brief speech.

  • NECA lauds Buhari for rejecting Housing Bill

    The Nigeria Employers’ Consultative Association (NECA) has commended President Muhammadu Buhari for declining assent to the National Housing Fund (Establishment) Bill 2018, sent to him by the National Assembly.

    It said the proposed Sustainable Development Levy will increase the cost of building materials.

    Its Director-General Mr. Timothy Olawale said Buhari’s action was laudable and a demonstration of his government’s responsiveness to the concerns of organised businesses; and an affirmation of the government’s commitment to the Ease of Doing Business Initiative.

    Olawale listed some of the contentious provisions in the bill as the introduction of a levy of 2.5 per cent for a 50 kg bag of cement.

    He listed the implications of this provision to include increase in the cost of building materials and that cement manufacturers will lose market competitiveness.

    Read also: NECA hails Buhari on Micro Pension Plan

    He said manufacturers and businesses were already saddled with several challenges, such as infrastructural decay and power, among others.

    “Some companies are closing shop due to some of these challenges; others are struggling to stay afloat. The proposed levy would  lead to an increase in the cost of doing business, and would likely be passed to the consumers whose purchasing power is already weak,” he said.

    Olawale noted that the levy is a form of VAT and that the  courts had frowned against imposition of double taxes on businesses.

    He said: “The contribution by  workers was changed from 2.5 per cent of monthly basic salary to 2.5 per cent of monthly income (which is total emolument). This will weaken the purchasing power of the average worker and could lead to defiance and deliberate attempt at non-compliance.”

    He raised concern over the huge sanctions in the bill, which is up to N100 million, adding that this could be seen as pecuniary-driven, adding that it would defeat the objective of the national housing scheme.

    As a way out, the NECA boss urged the government to amend the contentious provisions.

  • NECA hails Buhari on Micro Pension Plan

    The Nigeria Employers Consultative Association’s (NECA) Network of Entrepreneural Women (NNEW) has commended President Muhammadu Buhari on the launching of Micro Pension Plan (MPP) for retired self-employed workers in the informal sector of the economy.

    Mrs Omolola Ajani, Chairperson, NNEW Abuja chapter, gave the commendation in an interview with the News Agency of Nigeria (NAN) on Sunday in Abuja.

    President Buhari, on March 28, launched the Micro Pension Plan (MPP) which automatically extends retirement benefits to millions of self-employed workers in the informal sector.

    According to her, it is a laudable plan and something that is very welcome as it will further promote the desired saving culture.

    “People want to find alternative means of getting income, thereby going to different kinds of schemes, including cooperatives, which they are not even sure about.

    Read also: NECA hails CBN’s forex ban on textile imports

    “This plan provides security and it is flexible and, above all, safety is key, as it concerns hard earn savings.

    “For instance, if you look at what the Pension Act Reform has done, it has promoted confidence in the pension scheme, but initially, people were against it.

    “Now, people can see that pension scheme has worked out perfectly well and we should promote it,” she said.

    Ajani said NNEW would encourage all its members to subscribe to the plan as it would be beneficial to them.

    She added that a lot of people would think that they did not have much to start saving, “but if you think of provety in old age, that should scare you to going into saving.” (NAN)

  • NECA hails CBN’s forex ban on textile imports

    The Nigeria Employers’ Consultative Association (NECA) has commended the Central Bank of Nigeria (CBN) for banning the sale of forex to importers of textile materials.

    Its Director-General, Mr Tim Olawale, told reporters in Lagos  that stopping the sale of forex to textile importers was good.

    He said the decision would breathe life into the textile sector, stressing that over $4 billion spent on textile materials import deprived other critical sectors the much-needed foreign exchange (forex).

    Reflecting on the impact on the  industry in the past years, Olawale said: “The first modern textile mill in Nigeria, Kaduna Textile Mill, was started in 1956 in Kaduna, and between then and 1987, there were 37 textile firms in the country, operating about 716,000 spindles and 17,541 looms.

    “This period was indeed the glorious era of the textile industry. With an annual growth rate of 65 per cent between 1985 and 1991,  employing about 25 per cent of workers in the manufacturing sector, the textile industry, then, could be called the pride of Nigeria.”

    Olawale said to revive the industry, the borders should be policed.

    He said the porosity of the borders made smuggling a lucrative enterprise, adding that this was affecting the CBN’s efforts to help the industry.

    Olawale urged the Federal Government not to relent in creating a favourable environment for businesses, stressing that for the Executive Order to work,  a proper regulatory mechanism should be in place.

  • NECA advises Buhari on policy consistency

    The Nigeria Employers’ Consultative Association (NECA) at the weekend urged President Muhammadu Buhari to ensure consistency in policy formulation to engender smooth business.

    Its Director-General, Mr Timothy Olawale, said the time had come to put aside politics and put governance at the centre stage.

    “The Presidential Election has been won and lost and we believe it is time to put aside politics and let governance take centre stage. Having followed keenly the thrust of the Buhari-led administration, we do not expect any deviation from the administration’s policies.

    “Surprises are not expected judging by the direction of the current administration since its inception, hence, we expect to see more of policy stability. The Federal Government has shown a sustained commitment to the implementation of the Economic Growth Recovery Plan (ERGP) and we expect this to continue.

    “Stability of different economic policies, continued focus on the different social investment programmes such as the Trader-moni,  which are deemed pro-poor and sustenance or deepening of the government’s engagement with the private sector through the quarterly Presidential Forum, among others are expected,” Olawale said.

    He said infrastructural development has also been an area of focus for the administration and there are expectations that ongoing projects all over the country will be completed in record time.

    He said: “We are also witnessing a steady progress in the Export Expansion Grant, which supports exporters in the expansion of their businesses. We expect the Presidential Enabling Business Environment Council (PEBEC) to step up the implementation of its mandate and the implementation of the Ease of Doing Business policy. We, however, hope that the passage and implementation of the 2019 budget will be given due attention as we are already in the third month of our fiscal year, not forgetting that several business decisions are tied to the passage of the budget.”

    Expressing concerns of the businesses community over worrisome trend in the first four years of the administration, he said regulatory gangstarism reached a new height in the first four years of the administration.

    He said as the president was making efforts to ease the challenges of doing business in the country, some regulatory agencies were stifling businesses, discouraging entrepreneurial propensity of small and medium scale entities and inadvertently creating the environment for job losses.

    He said: “The president must ensure that this trend is brought to a stop. A collaborative engagement of the private sector and creation of an environment for it to thrive is the only panacea to the raging threat of unemployment in our nation.”

    He said the government has another four year’s opportunity to reverse the negative trends and prognosis in the nation.

    “Concerted efforts must be made to revive moribund industries, support struggling enterprises, create a responsible regulatory regime and focus on inclusive growth for the rapid development of our nation,” he added.

  • Failure to inaugurate NSITF board stifles productivity, says NECA

    The Nigeria Employers’ Consultative Association (NECA) has criticised the Minister of Labour and Employment, Chris Ngige, over his insistence on not inaugurating the boards of the Nigeria Social Insurance Trust Fund (NSITF), and other Federal Government agencies under his ministry, saying the development was stifling their performance.

    According to NECA, which represents the interest of employers in Nigeria, the failure to inaugurate the board members, several months after they were appointed, contravened the law establishing such agencies. He noted that such action was inimical to the growth and performance of the agencies.

    NECA Director-General Timothy Olawale, who criticised the development in a statement, lamented that more than one year after President Muhammadu Buhari announced the membership of the boards, some recalcitrant Ministers have remained defiant to President’s directive without any repercussion.

    To avoid eroding the confidence  built over the years in the institutions by Nigerians, the NECA scribe said the implication of total absence of a governance framework, which is to regulate the activities of the agencies, three and half years down the line, after dissolution of previous boards, was grave.

    He said it was unfortunate, especially for a government that prides itself in the rule of law.

    He advised that government should ensure and encourage the practice of good corporate governance at all levels, saying the Acts establishing the various agencies had provided for the composition of the board members and in some instance ‘institutional representatives’ to the boards mentioned.

    It would be recalled that there were pressures on the Minister of Labour and Employment to inaugurate the boards. Till date, his promise has failed to come to pass.

    The minister, he said, also assured that the board would be inaugurated in order to assist the implementation of the audit committee he set up to study financial infractions in the Fund.

    Ngige had announced that the implementation committee of the audit report, which had since been established by him to effect the various policy recommendations  aimed at sanitising and strengthening the weak internal audit system of the Fund.

    The Federal Government had in August 2017 nominated former NUPENG General Secretary, Frank Kokori as the Chair of the board with Vice President of Nigeria Labour Congress (NLC), Peters Adeyemi, Treasurer of NLC, Khaleel Ibrahim, representatives of Nigeria Employers Consultative Association (NECA), Central Bank of Nigeria (CBN), NSITF  Managing Director and Federal Ministry of Labour and Employment Permanent Secretary,  who represents the Ministry on the board as members.

    Kokori had in a public forum, while commending President Muhammadu Buhari for recognising June 12 as the official democracy day in Nigeria, reported the matter to the presidency.

  • NECA decries late passage of budgets

    THE Nigeria Employers’ Consultative Association (NECA) has decried the delays in the passage of budgets.

    At a briefing in Lagos, its  Director-General, Mr. Timothy Olawale, described as disheartening the delays, noting that they were worrisome and had become major sources of concern to the private sector.

    Olawale said the importance of quick passage of budget could not be overemphasised, adding that budgets play a very critical role in economic development.

    He said: “Looking at the trend from 2014, the earliest time the budget was passed was in 2016 and that was in March. Nigeria’s fiscal year begins in January and ends in December; hence, we cannot begin to imagine the dire consequences of the late passage of the budget on national development and business growth.

    “In Ghana, for instance, the budget for the 2019 fiscal year was approved in November 2018; in Ethiopia, the budget for the 2018-2019 fiscal year was approved few days before the commencement of the fiscal year in July 2018.

    ‘’Similarly in Egypt, the budget for their 2018-2019 fiscal year was approved about a month to the commencement of the fiscal year.

    “The stability and predictability of the budgetary process of these countries could be one of the reasons they are becoming the new desired destination for foreign investments,” Olawale said.

    On some of the adverse effects of late passage of the budget, he said: “For some years, the process leading to the approval and passing of budget has always been a victim of the proverbial fighting of two elephants.

    “A critical component of the budget, such as capital expenditure, which, to a large extent, plays a major role in economic development, suffers. Infrastructural reforms, which are meant to attract investments and improve the lives of the populace, are put on hold and business decisions, which could translate to expansion and employment generation frustrated.”

  • Two national minimum wages strange, says NECA

    The Nigeria Employers’ Consultative Association (NECA) has said it is strange to have two national minimum wages, arguing that what is common in other climes is a National Minimum Wage.

    Its Director-General, Mr Timothy Olawale, said at the weekend that though the Tripartite Committee on National Minimum Wage came up with its recommendation, there was nothing wrong if the National Economic Council (NEC) and the National Council of State examined it.

    “It is alien and an aberration to have two national minimum wages. It is usually one National Minimum Wage and we hope this would be corrected by the National Assembly,” Olawale said.

    Speaking further, he said what the Tripartite Committee on the National Minimum Wage submitted to the President upon conclusion of its assignment was a recommendation.

    He said: “Ordinarily, a recommendation is not cast in stone, but advisory to the president. The International Labour Organisation (ILO) Minimum Wage Setting Mechanism as domesticated in Nigeria permits the NEC and of course, the National Council of State to take a further look at the recommendations and make their inputs to the president.

    “While it is desirable that they accept and adopt the recommendations of the Committee, it is also within their rights to make their own independent recommendations. The process never envisaged a situation of rubber stamping the recommendations of the Tripartite Committee.

    “The National Minimum Wage process also gives the National Assembly the liberty to tinker with the figure in the interest of the nation and the citizens. Such tinkering could be an upward review of the recommendations, which would be desirable to the workers.”

    He said the process of ultimately arriving at a new National Minimum Wage is all inclusive, adding that it is part of the same process for the president to transmit a bill to the National Assembly on what he is convinced is appropriate as the National Minimum Wage.

    “It is true that both the recommendations of the Tripartite Committee on national minimum wage of 2000 and 2011 were accepted and passed into law by the government, this, however, does not mean it is wrong for the National Council of State to come up with a different figure as their recommendations to the President as they did at the end of their meeting,” he said.

    While commenting on the figure recommended by the National Council of State, he said the figure recommended which is N3,000 less than the recommended figure by the Tripartite Committee comes with its own positives.

    “The reduction will go a long way to lighten the burden of the micro, small and medium scale employers, which had been our concern before now. Granted too, that the exclusion threshold of 25 employees is expected to also take care of them,” he said.

    Olawale, while advising on the way forward averred the final leg of the process is the President’s assent or withholding of same to the outcome of the exercise by our law makers.

    He said the major concern of the labour movement should be to lobby the legislators.

  • NECA express worry over mounting debts

    The Nigeria Employers’ Consultative Association (NECA) has expressed its fears at the nation’s mounting debts, following the release of 2018 third quarter report of the Debt Management Office (DMO) and the 2019 budget assumptions.

    Speaking in Lagos, its Director-General, Mr. Timothy Olawale, said the figures showed that the Federal Government’s domestic debt profile rose to N15.814trillion last September, from N15.629 trillion in June 2018 (1.19 per cent increase).

    He said: “This figure becomes more worrisome when we look at the total public debt stock, comprising the external and domestic debt of the Federal Government, the 36 states and the FCT hitting the $73.208 billion (N22.38 trillion) recorded in June, 2018.

    “This trend, which is very disturbing, could have a negative effect on the developmental capacity of Nigeria, despite the government’s financial managers’ argument that the rate of increase is within a manageable limit.”

    He noted that experts at the International Monetary Fund (IMF) and the World Bank had advised that the revenue-to-debt ratio is unsustainable and it portends a serious danger for the future generation.

    Olawale said while the effect of the increasing debt might not be immediate, it could be painful in the long run with a chunk of revenue consumed by debt servicing to the detriment of infrastructure.

    Sadly, he said, the reality was that N2.140 trillion from the N8.8 trillion proposed 2019 budget,, has been earmarked for debt servicing, representing about 25 per cent of the budget.

    On the implication of the government’s huge borrowing in the domestic market, he said: “The size of government borrowing in the domestic financial market also continues to be a major source of concern as this has in no small measure, affected the chances of the real sector to access funding at a reasonable cost.