FG incentives to gulp N6tn yearly

Taiwo Oyedele, chairman of the presidential tax reform committee, said the incentives gulp N6 trillion every year.

Speaking at a press briefing on Friday, Oyedele said the committee would carry out a comprehensive tax waiver review.

He said, “Incentives in and of themselves are not bad. But you will also agree with me that as time changes, you need to also review what you have done for years.

“When you do not look at your incentive regime, it can get to a point when it becomes a distortion for economic growth because some people benefit and others do not but they operate in the same sector; so, they cannot compete. You also have to think about it from the point of view of cost benefits,” he said.

“As a country, if we are giving away N1, we need to be able to convince ourselves that the benefit we are getting is more than N1. Otherwise, that is no longer an incentive for the economy but for some individuals.

“If you look at our tax expenditure reports over the past three to four years, on the average, we are giving away around N6 trillion per annum. That is significant. What we have not been measuring enough is the benefit we are getting from that.

“But I can confirm to you that part of the mandate given to us by Mr. President is to look at the incentive regime in Nigeria so that we can, based on data and evidence, design what is appropriate for us as a country.

“In terms of what we want to drive, those incentives will be targeted, data-driven, evident-based, and in most cases, we have subset clauses so that they do not last forever and we will only find out after losing so much money.”

The tax expert said the government plans to remove disincentives in the tax system, in order to stimulate the economy and contribute to inclusive growth and wealth creation.

In 2019, former President Muhammadu Buhari signed Executive Order 007, under which the federal government issued the road infrastructure development and refurbishment investment tax credit (RITC) scheme.

The RITC scheme grants income tax credits to companies and individuals that provide funding for the refurbishment and rehabilitation of roads.

(Cable)