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Nigeria loses over $3b to tax waivers yearly

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NIGERIA suffers yearly loss of about $3billion to corner-cutting strategies through tax waivers granted to blue collar companies.

An international non-governmental organisation, Oxfam in Nigeria, dropped the hint yesterday at Abuja during a presentation of its two reports on the economy.

According to Oxfam’s Nigeria Country Director, Constant Tchona, 30 percent of companies operating in Nigeria evade tax while 25 percent of registered companies in the country are not paying tax, adding that the country loses about $2.9billion or N580billion yearly to tax waivers granted to multinational companies.

“The fiscal incentives granted with the hope of stimulating investments into the country’s economy are eroded with poor governance and lack of transparency, especially when the Central Bank of Nigeria has confirmed that there is no cost-benefit analysis to justify the exemptions and when there is no check on the discretionary powers residing with the Executive in granting exemptions.

The procedures for granting tax incentives should undergo a thorough review, focused on transparency and governance. This should include mandatory parliamentary oversight, publication of annual tax expenditure reports, clear requirements for incentives and periodic review of expected results,” Tchona said.

The country director also said that taxpayers in the country often opt to negotiate with corrupt tax administration staff in return for gratifications and reduced sums to the coffers of the government, stating that this action is against the sanctions imposed by Company Income Tax Act for such conduct which conversely negates fiscal incentives that stimulates investments and transparency.

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