LCCI canvasses 15% tax reduction for manufacturers

For manufacturers in the country to remain in business under the proposed Common External Tariff of the ECOWAS, corporate taxes must be reduced from the current 30 per cent to 15 per cent, the Lagos Chamber of Commerce and Industry has said.

The President of LCCI, Mr. Goodie Ibru at the quarterly press conference on the economy, said the CET would advance the cause of economic integration for the West African sub region, but stressed the implications for the country’s economy, particularly the manufacturing sector, would be profound.

The CET, instituted by ECOWAS Council of Heads of States, is expected to scrap import and export prohibition list and abrogate import duty waivers and levies among other policies.

Expected to take effect from the January 1, 2015, the CET would consolidate the sub-region as a customs union and create a market of an estimated 500 million people.

According to Ibru, the manufacturing sector of the country currently suffers significant competitiveness issues which involve high energy cost, high cost of funds, regulatory charges, ports charges and prohibitive cost of logistics.

He said such issues might further collapse what was left of the country’s manufacturing sector, if firm policies were not implemented to cushion the effect the CET policy might have on the country’s economy.

“These are issues to worry about especially at a time when unemployment has become a major problem for the economy. Therefore, in order to avoid the collapse of what is left of the Nigerian manufacturing sector, some immediate policy responses are imperative,” he said.

He said import duty, Value Added Tax on raw materials and machineries should be scrapped while there should be generous tax allowances on infrastructure related expenditures, before the CET policy would commence.

Ibru also called for increased support for Small and Medium Enterprises and business start-up through capacity building and funding, adding that the move would reduce unemployment.

“The rate of unemployment in the Nigerian economy is currently one of the highest in the world, at 24 per cent.  Over 50 per cent of the youth in the urban areas are unemployed,” he said.

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