By Modupe Gbadeyanka
Minister of Finance, Mrs Kemi Adeosun, has revealed that a tax relief is being planned for the manufacturing sector in the country.
Mrs Adeosun, while addressing journalists in Abuja on Wednesday, explained that the move was to ease the burden of the current economic recession on the sector by the Federal Government.
She further explained that the tax relief was part of measures by the government to reduce the negative impact of the foreign exchange crisis on the sector.
Mrs Adeosun, speaking at the end of the Federation Account Allocation Committee meeting, noted that based on the Gross Domestic Product (GDP) report for the third quarter released by the National Bureau of Statistics (NBS), the manufacturing sector’s contracted by 2.93 percent year-on-year.
This, she said, was lower by 1.02 percent points than what was recorded in the second quarter of the year.
According to the NBS, the decline in manufacturing activities to the continued drop in the naira to dollar exchange rate, which has made industrial inputs more expensive.
Mrs Adeosun said since the sector was one of those badly hit by the economic crisis, the Federal Government would support it with some form of incentives next year.
In addition, she said massive investments in infrastructure would be made to reduce the operating costs of the manufacturing sector.
“It is clear from the figures that the manufacturing sector is the one that is really challenged and the challenge in the sector is clearly that of foreign exchange availability. I think that the sector will benefit from more consistency of the foreign exchange policy.
“On the fiscal side, we are rolling out a number of measures to support the manufacturing sector in terms of tax reliefs and other measures that will allow the balance sheet of the sector to be repaired. They (manufacturers) have taken quite a hit and we will continue to try and support them through it.
“We have a fiscal road map that we will be rolling out and it includes a number of measures around revenue mobilisation, tax reliefs and the fiscal instrument, which will be issued in 2017 to get the economy back to recovery,” she said.
