Business
Reps probe $2.9bn tax waivers lost to foreign firms yearly
The lower legislative chamber has begun probe of the loss of over $2.9b yearly of tax incentives to foreign companies by the Nigeria government.
Justifying the need to review the incentives, the lawmakers said it is due largely to the nation’s current precarious economic situation.
According to the lawmakers, the incentives that were granted initially to stimulate the country’s economic growth have failed to achieve that purpose.
Thus the House Committees on Public Account and Finance have been mandated to investigate the incentives that are currently being granted with a view to reducing them, abolishing unproductive incentives and ensuring that those remaining are targeted at achieving specific social and/or economic objectives.
Read also: Foreign airlines struggle to free $575m trapped in CBN
The decision of the House followed the adoption of a motion by Kehinde Odeneye (APC, Ogun), who noted that Nigeria recognises the value of Foreign Direct Investments ( FDI ) as a driver of economic growth and development as a result of which various investment laws and regulations have been put in place to attract the inflow of FDI into the country
He said: “Nigerian government has actively wooed foreign investors through a plethora of incentive policies and regulatory frameworks to promote FDI .
“It is however worrisome that Nigeria is foregoing about $2.9b 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.”
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