Nigeria’s Presidential Tax Reform Committee has pushed for a reduction in tax waivers to corporate entities in the country as tax incentives hit N6tn annually.

The committee Chairman, Mr Taiwo Oyedele, said the body had undergone comprehensive tax waiver review in line with the plan the previous administration had set.

According to earlier reports, the average annual tax waiver amount was over N5 trillion. Several businesses, including Jigawa Rice Limited, Dangote Sinotrucks West Africa Limited, Lafarge Africa Plc, Honeywell Flour Mills Nigeria Plc, and Stallion Motors Limited, among others, had benefited from tax exemptions due to their pioneer status.

Others also include African Foundries Limited, Royal Pacific Group Limited, Kunoch Hotels Limited, Princess Medi Clinics Nigeria Limited, Medlog Logistics Limited, and Masters Liquefied Gas Limited.

Oyedele, while addressing joutnalists in Abuja, 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.”

He added that Nigeria had about N6tn annual tax expenditure, which needed to be reviewed.

“When you don’t 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 don’t 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. 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 N6tn 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 as part of the mandates 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 don’t last forever and we will only find out after losing so much money,” he stated.

The drop in investment and the lack of public funding that impedes development have both been linked to tax policies across the continent. Several nations, including Senegal, Kenya, and Nigeria, recently proposed tax revisions. Beyond widening the tax base to include more “common men” or middle-class people, however, some experts argue that governmental initiatives must be made to collect taxes owed by corporations, local and international alike.