ICAN frowns at plans to review up electricity tariff
...Recommends tax breaks, other incentives to Discos
Recognizing the effect of macroeconomic policy decisions such as the removal of petrol subsidy and unification of the foreign exchange rates, Nigerians are still grappling with, the Institute of Chartered Accountants of Nigeria, ICAN, has recommended the deferment of electricity rate increase to a future period.
ICAN, an accountancy organisation in Nigeria, with over 60,000 members said in a press statement signed by its President and Chairman, Governing Board, Dr. Innocent Iweka Okwuosa that the proposed increases at this time would further worsen the plight of the masses and push more Nigerians into multi dimensional poverty.
The body stated further that the increase would significantly increase the cost of doing business, particularly for SMEs, warning that these enterprises may be unable to pass on the additional costs to their customers by increasing the risk of business closures, and further worsening the unemployment rate.
It recommended that government and National Energy Regulatory Commission, NERC, should consider additional short-term tax breaks and other incentives to the Distribution Companies , as a form of productions focused subsidy (rather than consumption-focused subsidy), as an alternative to rate hike.
ICAN added that the Discos would need to demonstrate better accountability and transparency in governance and reporting, an area chartered accountants can provide valuable support.
It also recommended that Discos should invest further in their distribution network to reduce technical losses and build a platform for sustainable electricity distribution.
The body of accountants said that its members possess the expertise and experience to support the Commission and Discos in providing deep insights on the inputs, market conditions and assumptions related to the proposed price increases.
The Institute added that it stands ready and offers its support to the
Commission in its efforts to ensure transparency, fairness, and accountability in the electricity
sector.
The Institute which membership cuts across the public and private sectors, small, medium and large organisations, local and multinational, stated that key decisions by the government and regulatory authorities have significantly impact on members, and the organisations they represent.
Furthermore, ICAN said it has a public interest mandate to support and contribute to the conception, development and implementation of government and regulatory policies aimed at improving the quality of Iives of Nigerians, and to improve the ease of doing business in the country.
The institute claimed that it is on these bases that it has reviewed the application for rates review by the electricity distribution companies, and presented its position.
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