₦392.7bn: How Nigeria’s Biggest Firms Powered Government Tax Revenue in Six Months

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He stressed the pivotal role of manufacturing in Nigeria’s economic growth, drawing parallels with global policies. “It is quite significant in the sense that manufacturing is the bedrock of the economy. That is what we are seeing Donald Trump fighting for today, because he is looking at stepping up production. If you produce locally, the company income tax will increase, but if you import, the tax will be in import levies. If you don’t boost local production and promote direct investing, then your percentage contribution to the economy will decline. In order to host it, you have to boost infrastructure,” Sanni said.

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Highlighting the challenges, he pointed to supply constraints that limit output despite rising prices. “There is a kind of inelastic supply, that is, even if the price goes higher, the manufacturing companies don’t have the capacity to increase the supply at will. This will reduce the volumes we are expecting. Aggregate demand will decline. Future factors, such as tariffs and trade policy, can affect the manufacturing companies’ contribution to revenue,” he explained.

On possible solutions, Sanni suggested an import substitution strategy as a pathway for economic stability. “If we increase taxes on imports, it makes those goods coming to Nigeria more expensive. There will be a need for individuals to look for an import substitution strategy. The government can work towards an import substitution strategy. If the import duty rate is higher than the production cost, then we will be at the other end of the curve, but if it’s the other way around, then it is good. If the government can project and work on infrastructure, then it will make sense for the economy,” he concluded.

Meanwhile, President Bola Ahmed Tinubu recently signed into law four key tax reform bills: the Nigeria Tax Bill, Nigeria Tax Administration Bill, Nigeria Revenue Service (Establishment) Bill, and the Joint Revenue Board (Establishment) Bill, signaling a stronger framework for Nigeria’s fiscal and revenue system going forward

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