Economy: IMF’s call to increase taxes disastrous – NECA

The Nigeria Employers’ Consultative Association (NECA), has described the call by the International Monetary Fund (IMF) to the federal government to increase taxes in order to reduce borrowing spells as disastrous for an economy struggling to survive.

While noting that such an economic decision may appear to be in favour of the government, since it would drive up its revenues, NECA warned that any attempt to hike taxes would have a negative impact on households, individuals and businesses.

“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.

“Frankly, it is not every recommendation from development agencies that should be implemented without considering the peculiarity of the context in which such policies will be implemented,” the body noted in a statement yesterday.

NECA, which noted that adding more taxes will weaken the purchasing power of individuals and stifle consumption, with attendant consequences for social cohesion, stressed that countries tend to reduce taxes during economic lulls but increase the same during a boom.

It advised the FG to consider widening its tax net as well as addressing the cost of governance to reduce recurrent expenditure.