ActionAid urges FG to review tax holidays over huge financial loses

The ActionAid Nigeria (AAN) has urged the Federal Government to immediately review the series of tax incentives granted companies, especially the multinationals, to stem the annual revenue losses running into billions of dollars.

The Country Director of the organisation, Ene Obi, said this yesterday in Abuja at the review of existing studies and launch of the 58-page “Reports on Tax Incentives in Nigeria” organised by the AAN and Ford Foundation.

Daily Trust reports that the AAN and other local and international organisations put the total loss of Nigeria to corporate tax waivers at $2.9bn (N577bn) annually to top Ghana and Senegal who also lose $2.7bn and $0.2bn respectively annually to tax waivers bring the loss of the three West African countries to $5.8bn annually.

According to Obi, represented by Mrs. Funmilayo Oyefusi, the Director Organizational Effectiveness AAN, Nigeria is losing billions of dollars to incentives to the multinational.

“These loses were due to incentives and treaties. So we must do something about this to provide the right environment to attract Foreign Direct Investments (FDIs) and not the incentives that are not effective. We want the tax holidays to be within a time frame, so that after that time, they start paying the appropriate taxes. And that we would not be over burden the small and medium enterprises,” she said.

She also called for caution on the planned VAT increment to avoid overburden the poor, by the arbitrary increase, without the basic social amenities which the same poor people provided for themselves.

The unveiled report noted that while the new National Tax Policy sets clear objectives for investment incentives, however, no systematic, institutionalized mechanism exist to quantify the effectiveness of the tax incentive measures nor to communicate the costs and benefits of the current system to policy makers or the public at large

“The lack of any form of evaluation of the effectiveness of tax incentives compromises the ability of the Nigerian authorities to adequately and comprehensively assess whether the Investment Incentives will achieve the intended and stated objectives,” the report said.