Wetin be di Executive orders President Tinubu sign, how e go take affect you

Nigeria President Bola Tinubu don sign four different Executive Orders to reverse di Amendment Order, 2003 wey former President Muhammadu Buhari bin sign into law on 28 May, 2023, a day before e comot for office .

Part of di orders wey president Tinubu sign na di suspension of di 5% Excise Tax on Telecommunication services, suspension of di increase in excise duties on locally manufactured products plus di suspension of Import Tax Adjustment levy on certain vehicles, among odas.

Dele Alake tok-tok pesin to di Nigerian leader wey give dis informate for inside statement say di new orders na how goment dey take address concerns wey manufacturers plus oda stakeholders dey face sake of some recent changes on tax.

Di Nigerian goment explain say dis new orders dey come sake of some problems dem identify wit di date of di implementation of those tax laws.

Di immediate-past President, Muhammadu Buhari bin sign di Finance Act 2023 into law on 28 May, 2023, but di effective date dem state na 1 May 2023.

Part of wetin dey di Finance Act 2023 na di Customs, Excise, Tariff, and oda taxes wey make provision for 0.5% tax payable on all eligible goods wey dem import enta Nigeria.

Plus all services including telecommunication services dey liable to excise tax at rates wey di President prescribe..

However, Oga Tinubu order don make some changes to di law and e explain say dis order na to reduce di negative impacts of di tax adjustment on businesses and households.

E add say di dates for di implementation of these taxes no follow di law.

“Di Tinubu administration don notice say some of di tax policies wey dem implement no follow di correct date wey dem suppose implement am. Dem don begin collect some of these taxes before di time wey di law give for dem to implement am.”

Di president give assurance say dem no go increase tax without robust and wide consultations.

Di four Executive Orders President Bola Tinubu sign

For im inaugural speech, President Bola Tinubu bin promise to address unfriendly business fiscal policy measures plus tackle di issue of multiple taxation.

Di statement say na di promise e make to Nigerians, make am sign di following orders

Di Finance Act Order, 2023:

President Tinubu don move forward di date wey di implementation of dis tax suppose start. According to di act, di implementation suppose start from May 23, 2023, however, di presido don move am to 1 September, 2023.

E say dis na to ensure say di authorities comply wit di 90 days minimum advance notice for tax changes as dem write am put for di National Tax Policy.

Di Customs, Excise Tariff (Variation) Amendment Order, 2023:

Di Nigerian leader also shift di date of di tax changes from March 27, 2023 to August 1, 2023. Dis one too dey in line wit di National Tax Policy.

Suspension of di 5% Excise Tax on telecommunication services plus higher excise duties on products wey dem dey manufacture locally. These products include alcoholic beverages and tobacco products.

“Di 5% excise tax on telecommunication don create plenty argument. Plus, di status of dis tax no dey clear. Players for di sector also dey complain about di imposition of multiple taxes on dia operations.”

Suspension of Green Taxes:

Di president also order di suspension of one new tax wey dem just introduce – Di Green Tax. E also suspend di Import Tax Adjustment Levy on certain categories of imported vehicles.

Di president say dis go need more consultation.

“We don see say di Green Taxes, including di Single Use Plastics tax and di Import Adjustment Levy on certain categories of vehicles need more consultation plus holistic approach to di kontri net zero plan for manner wey e no go affect di economy negatively.”

Why goment sign dis new orders

Di new administration say dis new orders dey come sake of say di law no follow global practice, wia dem go give tax payers and businesses reasonable time to adjust to di new tax regime.

“However, di Finance Act 2023 and di Customs, Excise Tariff Order 2023 no give di required minimum notice period, e diafore put businesses in violation of di new tax regime even before dem begin implement di changes.

“Di Tinubu administration don since notice say some dem don implement some of these tax policies even before di date wey e suppose start. For some cases, dem pre-date di official publication of di relevant legal instruments wey back di policies.”

Di goment also add say dem identify some problems wit di tax changes dem mention.

“One document wey dey known as di 2017 National Tax Policy wey di Federal Executive Council of di last administration bin suggest a minimum of 90 days-notice from goment to pipo wey dey pay tax before any changes fit take effect.

Dis new tax policy don affect many businesses wey already dey battle wit di rising costs of products, di impact of di Naira redesign policy plus oda factors.

How e go take affect you

President Tinubu executive orders na to bring temporary relief to Nigerians as e suspend some taxes, di presidency tok.

E don pause di 5% Excise Tax on telecommunication services, di escalation of Excise Duties on locally manufactured products, plus di recently introduced Green Tax on single-use plastics.

Alake say di measures aim na to relax di financial burden on businesses and households wey these tax adjustments affect.

In addition na di executive order on di suspension of Import Tax Adjustment levy on specific vehicles.

Dis decision recognize di challenges of pipo wey dey import vehicles come di kontri as e go ease di plenty money dem dey pay on import taxes, dis go in turn, hopefully, reduce di amount of money wey dem dey sell cars wey don go really up, e add.

"Di president executive order dey also come as way to promote business-friendly environment and reduce di adverse effects of tax adjustments on di Nigerian economy.

"These measures go reduce economic hardships, foster growth, and provide relief to businesses and households wey dey affected by taxation policies."

Simple explanation on why goment dey increase tax

Di 2023 Budget wey dem sign into law on 3 January 2023 get aggregate expenditure of N21.8 trillion and aggregate revenue of N10.5 trillion.

Dis represent deficit of N11.3 trillion, di highest wey Nigeria don ever record for history. Wit budget pass two times of dia proposed revenue, Nigeria must generate an additional 108% of di proposed aggregate revenue so dat e go fit meet im expenditure needs without borrowing.

Nigeria neva meet im revenue targets in recent years. Di revenue wey di goment dey generate dey low and low revenue mobilisation dey lead to high borrowings. Di goment gatz borrow to meet some of dia expenditures and dis go lead to increase in debt service costs.

Di 2023 Budget get a debt service cost of over N6 trillion wey represent about 30% of di aggregate expenditure.

Goment need to take urgent action to address dis revenue underperformance.

One of di ways di Federal Government don adopt in a bid to tackle these revenue challenges, na through amending di tax laws and oda fiscal instruments.

For 2020, dem amend di Value Added Tax (VAT) rate from 5% to 7.5%. Oda tax reforms include di amendment of di Capital Gains Tax (CGT) Act, dis na to remove di outright exemption on di sale of shares, wey go make foreign digital companies pay income tax, increase in di Tertiary Education Tax (TET) rate, and so on.

Di immediate-past administration also approve di 2023 Fiscal Policy Measures wey increase import taxes on certain items wey include introducing new taxes on Single Use Plastics and some motor vehicles, dem increase excise duties on alcoholic beverages and tobacco and dem repeat say dem go increase excise duties on telecommunications services.