Economist Urges Taiwo Oyedele’s Tax Committee To Create Fresh Revenue Stream
A renowned economist, Marcel Okeke, has challenged the Taiwo Oyedele-led Committee on fiscal policy and tax reforms to create new revenue streams for cash-strapped Nigeria.
He also told the committee to work towards providing relief for companies and individuals as it harmonises taxes, warning that more companies might exit the country after GSK.
Speaking on “The Impact of Post-Inauguration Fiscal and Monetary Policy Reforms on Nigeria’s Macroeconomic Environment,” Okereke said the Nigerian economy badly needs some stimulus package at this time rather than mere palliatives that are likely to end up in the wrong hands and pockets.
Okereke who was the guest speaker at the monthly forum of the Lagos-based Finance Correspondents Association of Nigeria (FICAN) stated that President Tinubu’s palliative measures were a rehash of what the previous administration did, stating that “cash transfers are unearned, unproductive ‘transfer payments’ that do not make for any economic progress.”
The sustainability expert and business strategist emphasised the need to diversify the economy by developing sectors like agriculture and manufacturing and reducing dependence on oil as he highlighted the coup in the Niger Republic, the implementation of palliatives, insecurity, and oil theft are affecting the Nigerian economy.
“It is a challenge because those losses are incurred because of the fluctuations of the Naira, or the unification of exchange rates.
“And I have not seen anything the government is trying to do to check many of these companies which are conglomerates and multinationals, who play across the globe.
“So, if they have currency loans or facilities, what is happening to the Naira is what is reflected in the reports that they are coming up with.
“As long as the fate of the Naira keeps sliding against major currencies of the world, this is the kind of report that they are going to have at the end of the year,” he noted.
The economist calls for quick government intervention to prevent further company collapses, citing the exit of GlaxoSmithKline (GSK) as an example, attributing its inability to repatriate revenues and dividends due to foreign exchange shortages.
Okeke said that he hoped that GSK’s departure would not trigger a trend of other companies leaving as well, adding, “It came to my knowledge that in a couple of five years, they have been unable to repatriate their revenues and dividends and that has been the fate of other major multinationals because of the shortage of foreign exchange in the economy.
“So, when you sum all those things, that will show you how soon this economy will be doing well or how far it will not be doing well. I pray that the exit of GSK will not turn into a bandwagon for others to also leave.’’
Commenting on Tinubu’s palliatives, he stated that corruption could derail its implementation if not properly monitored, such that whatever ‘goodies’ that come the way of the state and local governments from the Centre might end up as ‘political patronage’ to be dispensed along party lines.
The President recently announced palliatives to cushion the effect of recent policy reforms on poor households and businesses.
Of the ₦500 billion palliative (0.25% of the GDP), ₦75 billion is to be disbursed for manufacturing support; ₦125 billion for Micro, Small, and Medium scale Enterprises (MSME) financing; ₦100 billion for CNG buses, and ₦200 billion for agricultural intervention.
On security, he observed that the government’s efforts are commendable but more needs to be done because “we have to be alive for us to do anything.” For foreign investors to respond to our policies by way of investment, they have to also be alive. The activities of bandits, Boko Haram among others are existential threats. Also, the judgement of the presidential election tribunal will determine a lot of things in the economy going forward. “
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