Telecom operators, tax consultants and the academia yesterday praised President Bola Tinubu for the suspension of the implementation of sections of Finance Act 2023 which among others imposed a five per cent tax on telecoms services.
Chairman of the telecoms’ professional body, Association of Licensed Telecoms Companies of Nigeria (ALTON), Gbenga Adebayo, tax expert and Fiscal Policy Partner and Africa Tax Leader at PwC, Taiwo Oyedele and a financial economist and Professor of Finance and Capital Market in the Department of Banking and Finance of the Nasarawa State University Keffi, Uche Uwaleke, said they were in agreement with President Tinubu’s intervention.
Adebayo, in a telephone chat, praised the president for what he described as his good consideration, saying the burden of the tax incident would have been ultimately passed on to the subscribers.
He said it is a plus to the government, adding that it showed that the president is listening to the yearnings of the people.
Adebayo expressed the hope that Tinubu will uphold the exemption when the implementation window is closed because of the earlier arguments advanced around the telecom sector already being overtaxed. The President’s action is a good sign to investors about consistency in government policy and that government is indeed a continuum, he stated.
Oyedele said he was excite about the development. “I am glad and excited because for those who have been following this development in the media space, you would have noticed the manufacturers in particular are feeling so frustrated and almost helpless that they were dealing with a lot of challenges, economic headwinds and naira scarcity reduced their turn over by double digits.
“So, what the President has done now is, first to defer the commencement of the tax to give enough notice to people to even prepare themselves.
“Some of them need to change their Enterprise Resource Planning (ERP) for accounting system; you need time to do all of that and that is why the National Tax Policy says if you introduce any changes, give at least 90 days’ notice.
“Mr President now is trying to do that, and number two is that some of the changes are not even necessary, or they are coming at the wrong time. They are being suspended indefinitely for further deliberation and review. I think it is good.
“I am not a lawyer but I know 100 per cent exactly what people are talking about. Normally the President’s Executive Order should not be able to amend a law enacted by the National Assembly. That is correct.
“But this is different because if you look at the Finance Act 2023, which is the order, the president is deferring the commencement date.
“That same Finance Act has a provision that says the commencement date of this Finance Act shall be the date it was signed into law, or any other date as may be prescribed by the president by an order.
“The National Assembly has delegated that power to the President to determine the commencement date.
“The President is only just exercising the legal power that has been conferred on him. I think this is 100 per cent in order,” Oyedele said during an interview monitored by our correspondent.
Uwaleke said the Executive Orders represent a welcome development as they will enhance the business environment and consequently improve the country’s ranking on the Ease of Doing Business.
“The suspension of the proposed import tax adjustment levy on certain vehicles and the excise tax on telecommunications and other locally manufactured products will help to moderate the rising inflation and increase productivity,” he said.
He added that The Finance Act Variation Order 2023 is equally in order as it would enable taxpayers to adjust to the new provisions in line with the National Tax Policy.
Prof Uwaleke said: “Much as these developments will help moderate the rising inflation.”
He also called for post-subsidy withdrawal palliatives.