Tinubu signs four executive orders
…Suspends 5% telecommunication tax, others
By Patience Ikpeme
President Bola Tinubu has taken action by signing four Executive Orders, one of which involves the suspension of the five per cent Excise Tax on telecommunication services and the Escalation of Excise Duties on locally manufactured products.
Among these orders is the Finance Act (Effective Date Variation) Order, 2023, which defers the implementation of changes in the Act from May 23, 2023, to September 1, 2023. This is to ensure compliance with the 90-day notice period required by the National Tax Policy 2017.
President Tinubu also signed the Customs, Excise Tariff (Variation) Amendment Order, 2023, postponing the start date of tax changes from March 27, 2023, to August 1, 2023. This decision is aligned with the National Tax Policy.
Dele Alake, the Special Adviser to the President on Special Duties, Communications, and Strategy, stated that these actions “were taken to mitigate the negative impacts of tax adjustments on businesses and the burden placed on households across affected sectors”.
Alake emphasized that “the President remains committed to addressing concerns about multiple taxation and anti-business obstacles. The administration will continue to implement friendly policies that promote nationwide business growth”.
President Tinubu’s interventions also include the suspension of the five per cent Excise Tax on telecommunication services and excise duties on locally produced products. In addition, Executive Order 4 involves the suspension of the newly introduced Green Tax on Single Use Plastics and the Import Tax Adjustment levy on certain vehicles.
The intention behind the President’s actions is to address the concerns of Nigerians and mitigate the negative impacts of tax adjustments, rather than exacerbate the challenges faced by citizens.
When asked about the effect of the President’s actions on Petroleum Tax and the introduction of new taxes, Zaccheus Adedeji, the Special Adviser on Revenue, clarified that the intent is to lighten tax burdens, streamline and manage existing taxes in the best interest of Nigerians.
He emphasized that the suspension does not affect the current pricing structure for petroleum products and that no new taxes are being introduced.
The primary goal he said “is to stimulate productive activities and increase trust in the government’s economic planning and policies.
“The administration aims to tax consumption rather than production to drive economic growth and benefit the country as a whole”.
Experts React
President Bola Ahmed Tinubu’s suspension of certain provisions of the Finance Act 2023 has received positive reactions from experts.
Professor Uche Uwaleke, a Financial Economist and Professor of Finance and Capital Market, stated that the Executive Orders signed by the President are a welcome development that will enhance the business environment and improve the country’s Ease of Doing Business ranking. He particularly highlighted the suspension of import tax adjustment levy on certain vehicles and excise tax on telecommunications and locally manufactured products, noting that it will help to moderate inflation and increase productivity.
Professor Uwaleke also acknowledged the Finance Act Variation Order 2023, stating that it is necessary for taxpayers to adjust to the new provisions in line with the National Tax Policy. However, he cautioned that additional measures with a direct impact on the population need to be implemented to alleviate the adverse consequences of fuel subsidy removal. He emphasized the importance of immediate rollout of promised palliatives.
Mr. Taiwo Oyedele of PricewaterhouseCoopers also praised Tinubu’s Executive Order, stating that it provides much-needed relief for businesses and households by addressing concerns regarding recently introduced taxes. He specifically mentioned the suspension of excise tax on telecommunication services, green tax on Single Use Plastics, and the escalation of excise duties on tobacco and alcoholic beverages. Additionally, Oyedele noted that the deferral of the commencement date of the Finance Act 2023 aligns with global best practice as prescribed by the 2017 National Tax Policy.
Overall, Oyedele believes that the Executive Order will create a business-friendly environment and indicate a responsive tax policy direction for the country moving forward.