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Businesses should not anticipate any reduction or removal of taxes as the government prepares to present the mid-year budget review to Parliament in the coming weeks.
Under the current International Monetary Fund (IMF) programme, the government is tasked with consolidating its tax systems to ensure that the country’s economic recovery is not hindered. Market analysts have also suggested that introducing new taxes would be challenging given the existing burden on businesses.
In an interview with Citi Business News, Tax Analyst Francis Timore Boi advised the government to focus on innovative compliance measures rather than considering new taxes. “The expectation is that we should have enhanced compliance measures to boost tax revenue from existing taxes. Some have called for certain taxes to be scrapped, such as the COVID-19 levy, arguing it is no longer needed,” he said.
Mr. Timore added, “Considering the amount the levy contributes to government coffers, I don’t think the government would want to remove it, especially when we are under an IMF programme.”
He also cautioned against the introduction of new taxes, noting that “From the 2023 and 2024 budgets, a lot of taxes were introduced, and some have not been fully implemented. For example, the 5% excise tax has faced concerns from plastic manufacturers. Therefore, any attempt to introduce a new tax at this time may not augur well for the business community, especially with elections fast approaching.”
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