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Govt should review tax policy in favor of the poor – Ngonadi, SECCIMA President

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Mr. Humphrey Ngonadi,the Chairman/ Chief Executive Officer of Ngo Bros Nigeria Limited is the President, of South East Chambers of Commerce, Industry, Mines and Agriculture (SECCIMA).   In this interview with  AMAECHI PERCY ONYEJEKWE, 

Ngonadi urges the government to review tax policy , exempt the poor from taxation, check over taxation, industrialize the Southeast to create employment, power supply among other things. Excerpts.

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Nigeria marches on after the 2023 elections. What is your reaction on the situation of things in the country? 

 

We thank God for His mercies. Things, generally, tell us that we are yet to arrive at the point when every Nigerian would be able to heave a sigh of relief.

How has the continual devaluation of the naira affected businesses in the Southeast?

It is not just the Southeast, It is Nigeria as a whole. As the naira continues to be devalued, the purchasing power of the currency is weakened, thereby leading to a high cost of commodities including raw materials. What you purchased at the price of N200 in 2021 you now purchase at N1,500 today. One bag of rice is sold between N32 000 and N56,000 while one bag of cement costs N5000. Today, the exchange rate is allegedly N950 per US dollar in the parallel market. There is inflation. Businesses are suffering, the poor are groaning and the people are lamenting.

 

The removal of subsidy on oil has given rise to an astronomical increases in the price of petroleum products and other commodities.  How are you getting on in the manufacturing industry?

 

The removal of subsidy on oil might be in the interest of the government because the government needs money to run its affairs. But this would have been discussed with stakeholders.

As it stands today,  everybody is feeling the negative effect of the sudden removal of the oil subsidy, especially the poor.  The price of commodities has gone up beyond the reach of the poor, average Nigerians. As at last week the pump rice of petrol fluctuated between 620 and 700 per litre depending on the area in which one resides in the country.

Power supply is one of the biggest challenges facing industries in the country. How has this challenge affected your business?

Since time immemorial we have resorted to using generators to power our machines for production as an alternative to irregular power supply. We purchase diesel from the filling stations at the current market price. This costs us a huge amount of money. Now, after calculating everything including the cost of production, the price of the products goes up. Some industries, airlines, and pharmaceutical companies among other businesses have shut down due high cost of production.  Some companies have cut down the size of their workforce while others find it hard to pay their workers salaries.

 

Critics accuse the government of the instability of the Naira and poor management of resources. What have you to say? 

Business and  the economy grow better in a setting where the currency is stable and factors of production are affordable. You cannot talk of economic growth, or business growth in a country where the currency is unstable. The instability of the Naira through devaluation weakens the currency in favour of the US$. It negatively affects the purchasing power of the currency leading to a high cost of materials needed for industrial production.

Secondly, poor management of resources would give rise to poverty. The poverty rate would rise higher when people are unable to meet up with demands of society due to government policies that favour the few , rich people the society.

Government should, therefore, work hard towards stablizing the naira and improving the economy for economic and business growth. It should put the poor in the fore front while initiating policies.

 

Government borrowing and debt burden in recent times is said to be allegedly alarming. What is your reaction?

Borrowing is normal all over the world. You borrow for a reason and to pay back at a stipulated time. The government borrows to solve its problem. But you do not continue to borrow without reimbursing the lender with interest. Continual borrowing without reimbursing the lender keeps increasing the debt burden.  You do not borrow to spend on leisure. The borrowed money should sponsor projects, build industries, and engage in other profit-yielding ventures so that you can make a profit and reimburse the lender in due time. No country survives with borrowing.

 

The cashless policy of the CBN and naira swap elicited bitter challenges. How would you want the policy handled?

Everybody felt the effect of the policy. It affected everybody. There was no money. People queued up in the bank to get the nonexistent new naira note. Then there was a protest at the CBN headquarters. That is now history. But such important policies, like the fuel subsidy removal, should not have been made and implemented in haste. They needed consultation with stakeholders before being implemented to avoid negative consequences. The policy should be left for multinationals, medium and large-scale industries among others who do large-scale monetary and financial business. Petty traders, hawkers, and peasant farmers among others should be excluded from the policy.

 

 

Lamentations have continued to trail tax policy in the country, especially in the Southeast. Now President Tinubu has set up a fiscal policy and tax reform committee. What have you to say?

 

 Taxes are rightly one of the sources of government revenue.  But there is, allegedly over taxation or multiple taxations. There is the value-added tax (VAT). VAT allegedly increased to 7.5% from 5.2% during the President Muhammadu Buhari administration for some products and it has been retained. Some criticized  it , saying it is outrageous. In the Southeast, there are so many toll gates. You spend a huge amount of money at the toll gates before you can transport your goods from Onitsha to Aba. Even motorcycle operators (Okada riders), barrow pushers, , groundnut sellers, vegetable sellers, street traders and other petty traders along the street pay taxes, and levies before they can do business in most places in the Southeast. It is worrisome that people who collect these taxes from the poor are well-to-do people who own cars and live fine. There are different taxes and levies the hawker, the groundnut seller, and the Okada man among others pay per day to do business in the Southeast. There is a need to review this tax policy in favour of the poor. Let the poor be excluded from taxation.

Government should also endeavour to industrialize the Southeast to create jobs for the eligible. Being an institution of state government should continue to do the needful for the people.

 

 

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