LCCI Says Nigerian Postal Services Bill Detrimental To Private Sector Investment
The Lagos Chamber of Commerce and Industry (LCCI) is concerned that the Nigerian Postal Service’s Bill 2021 passed by the Senate is replete with provisions that are detrimental to private sector investment in the courier industry.
LDDC President, Toki Mabogunje, at its quarterly press conference on the state of the nation, highlighted the concerns about the bill include the Requirement for licensees to contribute 2 per cent of annual turnover as prescribed in Section 68 (2) (b).
The LCCI said Section 68 (2) (b) of the Bill which requires licensees to contribute 2 per cent of their annual turnover to the Universal Postal Service (UPS) fund, is most unfair to courier companies, many of which are struggling to survive.
“Turnover would include companies’ debts (some of which the courier companies may not be able to collect).
Our concerns are that these companies currently pay numerous taxes which include Company Income Tax, VAT, levies by various states of the federation, Federal Airports Authority of Nigeria (FAAN) and airport charges, throughput charges by FAAN pension funds and NSITF, NHF, local government charges, signage fees of various states, etc.).
The industry, the LCCI Boss said is currently beset with a variety of taxes at national and sub-national levels.
She also lamented over the worsening security situation in the country, warning that it is scary that banditry attacks, abduction, herders-farmers conflict, vandalism, and insurgency have become recurring incidences in Nigeria.
She noted that the impact of this crisis on the Nigerian economy remains profound and multi-dimensional as the crisis has crippled lots of private and public investments across the nations.
“Many households have lost their means of livelihoods. Many farmlands across the country have been destroyed with consequent impact on food production and security,” she said.
She pointed out that the situation has projected the economy as an unsafe destination for private and foreign investments, saying that if not unaddressed, it could thwart the government’s efforts in attracting foreign capital into the economy.
“We note that investor confidence in the economy had been weak before the covid outbreak, and many investors still see Nigeria as a risky environment despite stronger oil prices and exit from recession. Confidence may not be restored in the near term if there is no significant improvement in the security environment,” she added.
She further stated that the situation has also impacted fiscal position by making government incur additional expenditure as contained in the supplementary budget, mainly to fund security operations, warning that this could worsen 2021 fiscal deficit in the light of low revenue mobilization.
In her words, ‘It is important to have this challenge resolved at all costs. Decentralizing the security eco-system by enabling state and local governments to take key security-related decisions is an option to consider. It is also important to ensure a concrete and sustainable means of tackling the challenge of youth unemployment by designing programs and policies that would bolster employment opportunities for the youths in the country.”
She lauded the CBN for its sustained intervention in the real sector through its numerous intervention programs such as the N220 billion Micro, Small and Medium Enterprise Development Fund; the N300 billion Real Sector Support Facility and the N1.1 trillion covid-19 stimulus.
She however stated that feedback from its members and the wider business community showed that access to intervention funds is not encouraging.
“We urge the CBN to undertake a review of its strategies and eliminate the bottlenecks associated with access to intervention funds,” she advised, noting that the forex market is still faced with liquidity challenges as many investors are having difficulties accessing foreign exchange for the importation of raw materials, equipment and critical inputs for production and processing.
The situation, she said, is taking a huge toll on capacity utilization, recovery and sustainability of businesses in the production sector.
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