The think tank advised that gross monthly salaries of N200,000 and below should be exempted from payment of Personal Income Tax (PAYE)
The Centre for the Promotion of Private Enterprise [CPPE] on Sunday urged President Bola Tinubu to reciprocate the thoughtful stance of the labour union by speedily coming up with measures to mitigate the pains of the fuel subsidy removal.
In a statement signed by Muda Yusuf, director of CPPE, the think tank said the mitigating measures should be holistic and inclusive and driven by a combination of direct interventions, fiscal policy measures and monetary policy actions.
Mr Tinubu had, in his inaugural address on 29 May, announced the removal of fuel subsidy--the stance he had also maintained in his campaign as a candidate during the election.
Last Monday, the Nigerian Labour Congress (NLC) and the Trade Union Congress (TUC) said they would no longer proceed with the nationwide strike planned for Wednesday.
The decision came after a meeting between the federal government and the labour unions at the Presidential Villa, Abuja.
The CPPE commended the NLC and TUC for seeking dialogue to resolve the impasse triggered by the fuel subsidy removal.
"In truth, the pains inflicted on the citizens, especially the vulnerable segments of the society, were very severe. A strike would have further exacerbated an already difficult situation for the citizens. a
"The sufferings are real and affect the citizens across all segments of our society, public service, private sector, informal sector, artisans, students, SMEs, the unemployed, the aged, pensioners etc.
"There is, therefore, a need for urgent responsive actions from all tiers of government," the CPPE statement said.
Mr Yusuf noted that the citizens have demonstrated an incredible understanding, tolerance, patience and resilience.
He said the government cannot afford to overstretch this gesture or be perceived as taking them for granted.
"Reciprocity by the political leadership at all levels is urgent, exigent and crucial. The hardship mitigating measures could be classified into immediate, short-term, medium and long-term.
"Such responses would send the right signals to citizens and demonstrate the government's sensitivity to the devastating impact of the subsidy removal on the poor," he said.
Price Increase
Following the policy pronouncement, the CPPE said transportation costs had increased by 20 to 50 per cent.
"For most citizens, transportation is critical to their survival. The hike in transport fares and the corresponding inflationary effect are already threatening the livelihood of many, both within and outside the public sector.
"Wage earners, small business owners, informal sector operatives, artisans and the unemployed are all very vulnerable in the current circumstances.
"This is the context in which the government needs to urgently respond to the current crisis, focusing on the scope of impact, effective targeting, inclusion and the right messaging, the statement said.
Mr Yusuf explained that immediate panaceas need to be activated, not just with respect to transportation costs, but the surging cost of living generally.
"The agreement signed with labour did not reflect the desired urgency of the mitigation measures. It is also scanty on immediate actions and quick wins needed to immediately assuage the feelings of the ordinary citizens and stabilise the social environment," he said.
Direct Intervention Measures
Mr Yusuf suggested that NNPC should sell petroleum products at a price 10 per cent less than that of other private sector marketers.
He explained that this is to demonstrate the desired social sensitivity by the government in this transitional phase of subsidy removal. It is also of great symbolic significance to do so.
He added that the government must be seen to be concerned about the social outcomes of this reform, and this is without prejudice to the new status of the NNPC as a public limited liability company.
"Quick wins in the power improvement strategy should be implemented immediately. This would reduce the demand for petroleum products [petrol and diesel] for purposes of electricity generation by households and businesses," the think tank said.
The CPPE noted that the government must end gas pricing in dollars for domestic use, especially for manufacturers.
"Necessary urgent steps must be taken by the government to put an end to this dollarisation framework to ensure moderation in energy costs for the manufacturing sector.
"Government should take urgent steps to reduce the cost of LPG to households. The recent reduction in the LPG price is laudable, but the price reduction trajectory should be sustained to ease pressure on households and prevent deforestation," he added.
On the fiscal side, he said import duty, VAT, and other port charges on semi-knocked-down parts for the assembly of mass transit buses should be waived.
"This would not only make mass transit buses cheaper; it would enhance industrial capacity utilisation of the vehicle assembly plants in the country.
"Import duty on passenger buses of 15 passenger capacity and above should be reduced by 50 per cent for the next one year.
"Import duty on fairly used cars of engine capacity of 2000cc and below should be reduced by 30 per cent," he said.
The CPPE also called for the abolition of all forms of taxes and import duties on renewable energy equipment to boost the adoption of renewable energy by households and SMEs. Such waivers, Mr Yusuf said, would make renewable energy adoption affordable.
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"All agricultural inputs, machinery, agrochemicals, fertiliser, etc., should attract zero import duty and zero VAT. This would boost investment in agriculture, especially commercial agriculture. The higher agricultural output would boost food production and ultimately moderate food inflation," he said.
Mr Yusuf explained that generous tax and other fiscal incentives should be provided to private healthcare investors.
This, he said, would help to conserve foreign exchange through a reversal of the growing medical tourism in the country.
"Generous tax and other fiscal incentives should be given to private investors in education. This would enable the private sector to complement the efforts of the government in providing quality education, especially at the primary and secondary levels.
"Generous tax and tariff concessions to incentivise rapid growth in investment in refineries. The outlook for growth in refineries investment is very bright, given the elimination of fuel subsidy.
"This is also in line with the commitment to promoting competition in the petroleum downstream sector."
He noted that gross monthly salaries of N200,000 and below should be exempted from payment of Personal Income Tax (PAYE) as it will give low-income earners room to improve their spending capacity and reduce poverty.
