Expert Seeks Balancing Economic Growth with Transparency in Tax Waivers

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Tax Exemption Continues Despite Government EffortsA recent report by The PUNCH reveals that despite the Federal Government’s efforts to discontinue tax exemptions and bolster revenue, 107 companies, including Dangote and Mikano International, continue to benefit from tax exemption.

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Increase in BeneficiariesThe number of beneficiaries under the Industrial Development Income Tax Act’s Pioneer Status increased to 107 firms by the fourth quarter of 2023 from 83 in the first quarter of the same year, according to the Nigerian Investment Promotion Commission’s latest Pioneer Status Incentive reports.

Pending Requests and ExtensionsWhile 79 firms submitted new requests and 211 are pending, 56 companies received initial approvals, and 19 were granted extensions until 2026.Stimulating Investments

The pioneer status offers tax relief for a three-year period and aims to stimulate investments in sectors where such initiatives are absent.

Significant InvestmentsAlthough the exact amounts granted were not disclosed, data from the Federal Inland Revenue Service revealed that approximately 71 companies enjoyed N390.26 billion in incentives between 2021 and 2022.

Diverse Sectoral InvestmentsThe investments made by these companies amounted to N2.49 trillion in various sectors, including manufacturing, pharmaceuticals, information technology, construction, and tourism.

Prominent BeneficiariesNotable beneficiaries include Dangote Fertilizers, Mikano International Limited, and others.Government’s PerspectiveDespite concerns about revenue loss due to tax incentives, government officials argue that these measures are essential for attracting foreign investment.

Review and TransparencyThe Presidential Tax Reform Committee plans to review tax waivers to ensure transparency and effectiveness.

Lovina Kayode, Head of Incentives Administration, emphasized the strict procedures for awarding incentives to deserving companies and plans to assess their impact on job creation and economic activities.

Expert OpinionEconomic experts acknowledge the role of tax waivers in driving growth but stress the need for transparency and alignment with tax policies.

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