Lagos, March 22, 2019 A tax expert, Mr Taiwo Oyedele, has urged President Muhammadu Buhari to decline assent to the National Housing Fund (Establishment) Act 2018 passed by the National Assembly.
Oyedele, Head of Tax and Corporate Advisory Services in PricewaterhouseCoopers (PwC), West Africa, made the appeal in an interview with the News Agency of Nigeria on Friday in Lagos.
NNN recalls that the revised National Housing Fund (NHF) Bill was passed on Feb. 18 by the National Assembly and is awaiting presidential assent to repeal the 1992 NHF Act.
The National Housing Fund (NHF) is a Federal Government housing scheme to which all public servants and employees in the organised private sector within the country are expected to contribute 2.5 per cent of their monthly salary to Federal Mortgage Bank of Nigeria, managers of the fund.
The tax expert said that the revised bill was regressive and failed to get the basic input of various stakeholders.
“The President should send the bill back to the National Assembly, and the National Assembly should engage all stakeholders.
“They do not have entitlement to Nigeria than the rest of us.
“They should carry everybody along, from labour to workers, employers, insurance companies, bankers and PFAs, all the groups that they are planning to put the burden upon.
“Let them have a say. Even if you are not going to approve what they say, listen to them first,” he said.
According to Oyedele, making all employers liable to deduct and remit the contributions monthly without a threshold would worsen the ease of doing business and Nigeria’s paying taxes ranking.
“The penalty for non-compliance of up to N100 million for corporates and N10 million for individuals is draconian, excessive and disproportionate to the violations under the law,” he said.
The tax expert said that the revised bill also failed to address the shortcomings of the 1992 NHF Act on the issue of land ownership and titles as well as the current Land Use Act.
Oyedele said that increasing the tax burden of contributors without addressing other fundamental issues like land registration and legal framework for real estate investment trusts was inconsistent with the 2017 National Tax Policy.
The tax expert said that imposition of the 2.5 per cent levy on cement was a tax on property development which would make housing even less affordable.
“It is counter-intuitive to impose a tax on cement in order to make housing development more affordable,” he said.
The expert said the bill would also have negative impact on the capital market, saying banks and insurance companies setting aside 10 per cent of their profits for NHF investment would reduce returns to shareholders.
“This will reduce the attractiveness of the capital market and value of the shares.
“It also means that funds will be forcefully diverted from other uses and result to less liquidity and higher cost of borrowing.
“Pensioners will be worse off as the return of two per cent per annum on their contributions to be withdrawn after attaining 60 years of age or 35 years of service means their investment will be completely eroded,” he said.
Oyedele urged the President to reject the bill to ensure fairness, inclusiveness and sustainable national growth and development.