Economy
EXPERTS have warned that proposed taxes on fuel and telecommunications services could worsen hardship and increase inflationary pressures in Nigeria.
The stakeholders spoke separately with the News Agency of Nigeria (NAN) on Wednesday in Abakaliki.
They reacted to the International Monetary Fund (IMF) recommendation that Nigeria should extend Value-Added Tax (VAT) to petroleum products.
The IMF also recommended excise duties on telecommunications services as part of measures to improve revenue generation.
Mr Chukwuemeka Nwankwo, a tax administrator, said the proposal could strengthen government revenue and reduce borrowing.
“Nigeria must expand its revenue sources, but taxing essential services requires caution,” Nwankwo said.
He warned that citizens should not be subjected to unbearable financial pressure through additional taxes.
Another tax administrator, Mrs Ngozi Eze of Ebonyi State Revenue Board, supported broader taxation.
However, she cautioned against policies capable of discouraging economic activities and investments.
“Fuel and telecommunications are no longer luxury items; they are necessities,” Eze said.
She added that both services support businesses, education, communication and daily livelihoods across the country.
A legal practitioner, Mr Emmanuel Ogbu, said the IMF recommendation was not binding on Nigeria.
“No tax can be imposed merely on the advice of an international institution,” Ogbu said.
He explained that any new tax policy must pass through legal processes involving the National Assembly.
Ogbu advised the Federal Government to consider the effects of the proposal on ordinary Nigerians.
He said additional taxes on essential commodities could push more citizens into poverty.
Mrs Grace Nwite, another lawyer, called for extensive public consultation before implementation.
She said policies affecting millions of Nigerians must be transparent and socially responsible.
“Policies affecting millions must be inclusive and subjected to extensive national debate,” Nwite said.
Dr Samuel Nwali, an economist and lecturer at Ebonyi State University, Abakaliki, expressed inflation concerns.
He said taxing petroleum products after subsidy removal could trigger another rise in prices.
“Fuel is central to transportation, manufacturing and distribution,” Nwali said.
He warned that additional fuel taxes would likely increase the cost of goods and services.
Prof. Chinonso Ezeh, an economist, said telecom taxes could undermine digital inclusion.
“At a time when the economy is becoming digital, higher telecom costs may hurt users,” Ezeh said.
He noted that small businesses and students could face greater challenges from increased data costs.
Some traders also opposed the proposed measures, citing possible effects on consumers.
Mrs Esther Okoro, a foodstuff trader at Kpiri-Kpiri Market, expressed concern over fuel costs.
“We are already struggling with transportation costs; more taxes will affect consumers,” Okoro said.
Mr Ifeanyi Nnachi, a phone accessories dealer, said telecom taxes could reduce profits.
“Many of us depend on affordable data to reach customers,” Nnachi said, adding that higher costs could affect online businesses and communication services.
The stakeholders urged the Federal Government to strengthen social protection programmes.
They also called for measures to address rising living costs before introducing new taxes.
NAN reports that the IMF recently advised Nigeria to broaden its tax base. The recommendation aims to improve domestic revenue mobilisation and reduce fiscal deficits.
The proposed measures have generated debate amid rising living costs and persistent inflation.
Critics fear the taxes could worsen hardship and limit economic growth.
Supporters, however, argue they could improve revenue and support fiscal sustainability. (NAN)
F.O
Tags: Fuel tax Telecom tax