President Bola Ahmed Tinubu has issued four Executive Orders to suspend certain fiscal policies contained in the Finance Act 2023 and the 2023 Fiscal Policy Measures (FPM). In a statement issued by his spokesperson and Special Adviser to the President on Special Duties, Communications and Strategy, Dele Alake, the Executive Orders issued include:
- The Finance Act (Effective Date Variation) Order, 2023, to postpone the effective date of the Act from 1st May to 1st September 2023;
- The Customs, Excise Tariff (Variation) Amendment Order, 2023 to postpone the date the tax takes effect from 27th March to 1st August 2023;
- An order suspending the 5% excise tax on telecommunication service and the escalation of excise duties on locally manufactured products;
- An order suspending Green Taxes in the form of import tax adjustment levy on some vehicles and excise tax on single-use plastics and;
According to his spokesperson, the orders signed to vary the commencement date of the Finance Act and the customs, excise tariff and are in accordance with the 90 days minimum advance notice for tax changes contained in the National Tax Policy of 2017.
It will be recalled that the former President Muhammadu Buhari signed the Finance Act 2023 in May 2023. Some of the changes introduced by the Act include the increase of education tax from 2.5% to 3 %, introduction of 0.5% levy on goods imported into Nigeria from outside of Africa, elimination of double Value Added Tax (VAT) on goods purchased from a supplier who is not resident in Nigeria, among others.
Nigeria’s 2023 Fiscal Policy Measures (FPM) approved by the Buhari administration confirmed the 5% tax on telecommunication services provided by mobile telephony service providers and operators, as introduced by the Finance Act 2020. In addition, the FPM retained the previously introduced N10 per litre excise duty on non-alcoholic beverages, increased excise duty on alcoholic beverages, tobacco and cigarettes and introduced green taxes in the form of tax surcharges on some vehicles and excise duties on single-use plastics.
The Executive Orders to suspend certain taxes were commended in some quarters, as an alleviation of the tax burden on individuals and organisations at a time of worsening economic conditions. Although the suspended taxes had not yet been implemented, experts describe the suspension as a prevention of increased prices of goods and services which may have resulted in further inflation, amid the already high cost of living. However, some other observers are of the opinion that there are many more tangible things that the Tinubu administration needs to pursue to ease the suffering of citizens at this time.