Federal government has been advised to give companies incorporate within the period of Structural Adjustment Programme, SAP, not less than four years tax holiday to enable them absorb the shock of adjustment. This advice was contained in the July edition of UBA‚Äôs monthly Business and Economic Digest. According to the digest ‚ÄúThe present situation calls for a corporation tax of not more than 30 per cent instead of the present 40 per cent.‚Äù
The digest further advised that federal government to bear part of the cost of job creation in the private sector if in spite of its oil and FEM wealth, it cannot employ its citizen.
The UBA monthly publication said that there was need for government to evolve free excise duty for locally produced goods with a view to bringing down costs and prices within the reach of the average consumer.
In order to stimulate aggregate demand, the digest called for a relaxation of the present: ‚ÄúTight monetary and fiscal policies‚Äù government, the digest said, should not be scared by the inflationary implications of this policy prescription as a minimum rate of inflation was necessary for economic growth.
The digest, warned that the huge gap between the demand and supply of foreign exchange in the FEM was yet to be narrowed as total accumulative demand continued to exceed supply.
The digest lamented that the absence of clear defined CBN guidelines for an autonomous sale of Foreign Exchange at FEM was responsible for the non-repatriation of export proceeds.
The digest further advised the federal government to integrate SAP into the fifth National Development Plan since two years are not enough for any meaningful of an economy that was mismanaged for over 25 years.