The Nigeria Employers’ Consultative Association (NECA) advises that any attempt by the federal government to increase taxes will negatively impact households, individuals and businesses.

NECA’s director-general, Adewale-Smatt Oyerinde, in a statement on Sunday, said such a move would only lead to disaster for an economy struggling to stay afloat.

“For a private sector already overwhelmed by multiple taxes, the imposition of additional taxes on services will make the business community more vulnerable with a trade-off on growth and job creation.

“More taxes, of course, will weaken the purchasing power of individuals and stifle consumption, with attendant consequences for social cohesion,” Mr Oyerinde said.

Mr Oyerinde was reacting to a recent recommendation by the International Monetary Fund (IMF) to the government to increase taxes to reduce borrowing.

The IMF had recently called on the government to reduce its debt by increasing the tax basket and compliance to generate revenue to cut borrowing.

The fund, in its latest Fiscal Monitor titled, “On the path to Policy Normalisation”, released recently, noted that Nigeria’s debt was projected to continue to rise and urged the government to remove fuel subsidies and direct them to health and education

He added, “It may defeat any attempt to widen the tax net as taxpayers would consider tax avoidance measures.

“There will be massive capital flight, and the drive for direct foreign investment could be defeated.

However, the director-general said the government should consider widening its tax net, as the association had posited on many occasions and at various forums.

The NECA boss also said that the association supported the IMF’s recommendation to the government to consider widening its fiscal net, saying it is the way to go.

“In addition, one of the problems the government at all levels in Nigeria has is the rising cost of governance.

“If the cost of governance can be addressed decisively, it has the tendency to reduce borrowing since recurrent expenditure will automatically decrease, “ he said.

Mr Oyerinde said that the $800 million loan to serve as palliatives in view of the planned subsidy removal was unnecessary.

He urged, instead, that the government should give attention to fixing the refineries and making them operational in the coming months before the removal of the petrol subsidy.

(NAN)