By Joshua Egbodo
Abuja
House of Representatives has expressed reservations over the reported loss of about $2.9 billion yearly by the federal government due to tax incentives.
It said there was, therefore, the need to review the incentives granted foreign investors “especially now that the nation’s economy is facing a lot of challenges.”
It noted that the incentives intended to stimulate the country’s economic growth have failed to achieve the targeted outcome.
The House mandated its Committees on Public Accounts and Finance to investigate the incentives that are currently being granted with a view to reducing same, as well abolishing unproductive ones and ensuring that those remaining are targeted at achieving specific social and, or economic aims.
This was the fallout of a motion by Hon. Segun Odeneye, who noted that Nigeria recognised the value of Foreign Direct Investments (FDIs) as driver of the economic growth and development, adding that “Nigerian government has actively wooed foreign investors through a plethora of incentive policies and regulatory frameworks to promote FDI.”
He added that “for instance, the government introduced an initiative called the Granting of Pioneer Status, a legal concession which came in the form of the Industrial Development (Income Tax Relief) Act 1970, to support the growth of start-up businesses.”
“It is, however, worrisome that Nigeria is foregoing about $2.9 billion a yearly in form of tax incentives which are being used as a substitute for policies that could genuinely attract more and better investment, such as ensuring good quality infrastructure, reducing the administrative costs of setting up and running businesses and promoting predictable micro-economic policies.
“It is equally disturbing that tax incentives are given to companies in the hope that foreign investors will bring in Capital to support economic development and create employment, however, there is little evidence that tax incentives have created investments.”
