The Institute of Chartered Accountants of Nigeria (ICAN) has warned the Federal Government against imposing higher taxes on gas and other renewable energy sources following the removal of fuel subsidy.
It applauded the government for the bold step in removing fuel subsidy, as this would free up funds needed to develop the economy.
The Registrar and Chief Executive Officer of ICAN Professor Ahmed Kumshe, disclosed this in a statement.
Kumshe in a statement made available to the media on Thursday said that to attract investment into the sector at the required scale, the government needs to introduce other policies to complement the fuel subsidy removal to make the sector competitive and attractive given its international nature.
He said, “Policies seeking to impose higher taxes on gas operations, and duties on renewable energy items amongst others should be reviewed.
“The border closure in respect of items where local production falls short of the nation’s demand should also be reconsidered. The requirements to pay certain taxes and levies in foreign currencies should be discontinued while policy formulation should be evidence-based, and data driven.”
Kumshe also disclosed that increases in taxes and duties should be curtailed, adding that market forces which are the sole determinant for price recovery need to be monitored and regulated.
He added, “Regulation is also required to ensure that the desired quality of products is achieved whether imported or locally produced, and the maintenance of sufficient stock to guarantee uninterrupted supply.
“Also, the gains which are expected to accrue because of market efficiency should cascade to the people rather than for the enrichment of a few.”
He further advised the FG that the legally prescribed limits as set out in the Fiscal Responsibility Act (FRA) should be respected at all times while noting that the budgeting process needs to be improved as the government’s revenue increases thereby creating the fiscal space to finance development.
Also, he said the consequential savings from fuel subsidy removal, lower debt service cost, elimination of forex subsidy, among others should be channeled into programs that will benefit the people and are in line with the fiscal responsibility legal framework.
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