The Association of Bureaux De Change Operators (ABCON) is seeking a downward review of the cash processing fees introduced by the Central Bank of Nigeria (CBN).
ABCON, in its quarterly economic review for the third quarter, lauded the cashless policy but said the processing fees will have severe impact on small businesses.
The policy stipulates three per cent processing fees for withdrawals and two per cent processing fees for lodgments of amounts above N500,000 for individual accounts while corporate accounts would attract five per cent processing fees for withdrawals and three per cent processing fees for lodgments of amounts above N3,000,000.
“A good volume of businesses are still largely in cash, especially in the rural areas. Thus due to the likely negative effects in this critical segment of the economy, we have recommended a lower processing fees of between 0.5% to 0.75% and 1% to 1.25% for individual and business account holders respectively,” the association stated. It also cautioned against the proposed increase in Value Added Tax (VAT) to 7.2 percent from 5.0 percent, insisting that the increase will lead to more unemployment and poverty in the country. It faulted the move to expand the VAT net while also increasing VAT rate at the same time, saying it was a conflicting strategy.
It stated: “The immediate implication is that every Nigerian will either directly or indirectly be affected by the whopping 50% increase in VAT. The average VAT collection in the past six years is about N900 billion.”
ABCON expressed concern over the rising level of the nation’s public debt, and called on the federal government to exercise caution and take steps toward reducing the debt.