Lagos Chamber of Commerce & Industry (LCCI) has called on the Federal Government to, among other things, suspend the implementation of the percentage increase in Value Added Tax (VAT) till the end of the year in view of the negative impact of COVID-19 on businesses.
Dr. Muda Yusuf, Director-General, LCCI said the measure, including other proposals, were necessary to save the economy from collapse.
In a statement, Yusuf, proposed tax breaks and concessions for investors by suspending taxes for health sector investors, agriculture and agro– processing, aviation and hospitality sectors for at least one year, saying it has become imperative to discus policy measures and reforms that need to happen for the realisation of desired continuity outcomes.
Yusuf said the Federal Government should either inject liquidity or pursue policy measures that offer some accommodation that will facilitate economic and business recovery, saying though digital platforms have become more vibrant, they were “not sufficient to generate the desired momentum of economic activities as interactions and connectivity among economic agents are at the lowest ebb.”
He called on the government to set a post pandemic rescue plan agenda for the economy.
In addition, the LCCI boss called for an extension of filling of yearly returns, including payment of due amounts to June 30.
He pushed for unconditional waiver of penalties and interests of outstanding tax payments, temporary suspension of the recently- introduced 50 per cent increase in VAT till the end of the year.
He raised the alarm on the sustainability and business continuity over the pandemic.
He said: “The pandemic has derailed business projections and several risks have crystallised. Businesses have been grounded by the lockdown; supply chains disrupted and aggregate demand depressed. Investment assumptions have collapsed across sectors. Businesses are faced with a force majeure and the shocks are profound and unprecedented.
“The mortality of Small Medium Enterprises (SMEs) is set to heighten as they have tenuous capacity to absorb shocks, especially of a scale that we are witnessing,” he said.
To save the economy from collapse, Yusuf canvassed the need to salvage investments across all levels, including micro, small, medium and large enterprises, pointing out that without investments, there can be no jobs, as aggregate demand would remain weak and government revenue in jeopardy as tax revenue plummets; and economic sustainability will be at risk.
On employees, the LCCI chief said PAYE (Pay As You Earn) should be suspended for six months, saying: “This would put some money back in the hands of the employees during this period to strengthen the purchasing power of citizens and stimulate output within the economy.