The House of Representatives said on Tuesday that the country was losing an estimated $2.9bn (N571.3bn) yearly to tax waivers granted to multinational corporations and indigenous companies operating in Nigeria. Noting that this was a huge revenue loss to the country, it has ordered an investigation into such waivers with a view to either reducing or abolishing them completely.
It also said many local companies benefited from the tax incentives, which were granted by successive governments over the years.
According to the House, the tax incentives in most cases failed to meet the aims they were intended to achieve.
For instance, Mr. Kehinde Odeneye, who moved a motion on the need to investigate the waivers, stated that foreign investors were granted incentives with the belief that they would bring in capital to support the nation’s economic development and create employment.
But he argued that the turn of events indicated that “there is little evidence that tax incentives have increased investments.”
As many members spoke in support of the motion, the consensus of views was that the Federal Government should pursue economic policies that could genuinely attract investors as against granting tax waivers.
Members suggested that such policies should include the provision of quality infrastructure, reducing the administrative cost of opening and running business in Nigeria, and promoting predictable micro-economic policies.
The session was presided over by the Deputy Speaker, Mr. Yussuff Lasun.
The original motion sought to probe the incentives granted to multinationals.
However, on the advice of the Leader of the House, Mr. Femi Gbajabiamila, the motion was amended to include indigenous companies that also enjoyed tax incentives.
Gbajabiamila urged the House to expand the scope of the investigation to cover many local companies that made huge profits from their operations but paid nothing to the government as tax.
He, however, did not mention the names of such companies.
In passing a resolution on the matter, the House asked its joint committees on Finance and Public Accounts to investigate the incentives with a “view to reducing them, abolishing unproductive incentives and ensuring that those remaining are targeted at achieving specific social and/or economic objectives.”
The committees will be jointly chaired by Mr. Babangida Ibrahim and Mr. Kingsley Chinda.
In a separate resolution, the lawmakers directed the Federal Ministry of Power, Works and Housing to urgently reconstruct the bad sections of the Sango-Abeokuta Expressway.
The poor state of the road was brought to the attention of the House by a member from Ogun State, Mr. Jimoh Ojugbele.
He informed his colleagues that the road was economically important as a link between Lagos and Ogun states for people engaged in business activities on both sides.
The resolution stated, “The House is concerned that some sections of the expressway have failed considerably, which affect the smooth flow of traffic on the road, thereby causing severe loss of man-hours.
“The most worrisome is the incessant carnage due to fallen tankers and other articulated vehicles that litter the expressway.”