Operators in the real sector of the economy have expressed worry over the withdrawal of pioneer status tax incentive enjoyed by the cement industry adding that the development will send a wrong signal to investors.
The President of Manufacturers Association of Nigeria, Dr. Frank Jacobs, who raised the issue at a recent stakeholders’ meeting with the Minister of Industry, Trade and Investment, Dr. Okechukwu Enelamah, said, “The news of government withdrawing the pioneer status tax incentive enjoyed by the cement industry is not only disturbing but also amounts to government shooting itself in the foot as it would send a bad signal to both current and prospective investors of local and foreign origins.”
According to him, when an economy is contracting the way Nigeria’s economy is currently doing, countries work closely with the private sector by providing incentives and support to encourage them to maintain their investments and thus sustain employment level. “Under such circumstances, taxes are reduced and impediments to growth are removed as Britain did recently following the Brexit,” he stated.
The Director-General, Lagos Chamber of Commerce and Industry, Muda Yusuf, agreed with Jacobs’ position, noting that the current period was not a proper time to withdraw incentives enjoyed by investors.
He said, “This is not the right time to withdraw incentives of any kind from investors because they are already battling huge cost of doing business in the country.
“Apart from the high cost of energy, there is the high cost of funds and transport as well as the most recent decision by Customs to charge import duty at the flexible foreign exchange rate of over N300 to a dollar instead of N200 as was the practice in the past. This will increase import duty and further add to the cost of doing business for investors.”