A member of the House of Representatives, Kehinde Odeneye, has expressed displeasure at the practice of granting lengthy tax holidays to some companies operating in Nigeria.
Mr. Odeneye, who represents Ijebu Ode/Odogbolu/Ijebu North-East Federal Constituency, made his views known during a recent visit to ActionAid offices in Abuja.
During the visit, Odeneye commended ActionAid’s Leaking Revenue report and raised the prospect of checking the abuse of tax incentives through legislation.
“The content and social contribution of multinational companies must be weighed against the value of tax incentives,” the lawmaker said.
“The granting of tax breaks stretching up to ten years should be stopped.”
The lawmaker deplored the fact that there was no database of all companies enjoying tax breaks, clearly showing the value gained from such incentives.
ActionAid Country Director, Ojobo Atuluku, drew Mr. Odeneye’s attention to the existence of a bill which seeks to extend and give legal backing for companies to be granted a Pioneer Status incentive of up to 10 years.
“The bill is regressive and if passed into law would further strip the country of much needed revenue which could be used to provide social services and infrastructural development,” she said.
Mr. Odeneye promised to look into the bill and condemned practices such as the Export Expansion Grants (EEG) granted by the Nigerian Investment Promotion Commission (NIPC) to cocoa farmers and processors, which he described as a clever way to dodge tax.
He also said “lawmakers have a responsibility to investigate these issues to inform policy decisions.”
While pledging to work closely with ActionAid to address the abuse of tax incentives, Mr. Odeneye solicited the support of the organisation in providing critical information and documentation of facts.
In her response, the ActionAid Country Director said complimentary actions from developing and developed countries were required to harmonize country by country reporting to provide the tax details of multinational companies.