The Nigerian Customs Service says FG spends recklessly on waivers on import/export that do benefit the economy.
The Revenue Mobilisation, Allocation and Fiscal Commission, RMAFC, has said that it is worried by the incessant loss of revenue by the Federal Government through the existing waiver regime in the country.
Recently, the Nigeria Customs Service, NCS, revealed that between 2011 and 2013, import waivers granted various individuals and groups by the Ministry of Finance cost the Federal Government N1.4 trillion.
The Minister of Finance, Ngozi Okonjo-Iweala, had claimed that the government spent only about N171 billion on waivers as incentive to some critical sectors, such as manufacturing, agriculture, power, and gas to boost the growth of the economy.
But the NCS said more than 65 per cent of these ‘incentives’ were reckless, as they were granted for the import/export on questionable and unapproved goods, ranging from rice to fish and kola-nuts, that had no significant bearing on the economy.
To put a stop to the high rate of revenue losses through these indiscriminate waivers and tax holidays, RMAFC Chairman, Elias Mbam, said the agency resolved to meet with top NCS officials and those of the Federal Inland Revenue Service, FIRS, to plug areas of leakages.
Mr. Mbam told officials of the Nigerian Investment Promotion Council, NIPC, who visited him in Abuja that the revenue mobilization agency would also meet with other revenue generating agencies, namely the Nigerian National Petroleum Corporation, NNPC and its subsidiaries as well as the Central Bank of Nigeria, CBN.
The Chairman said the major concern of the series of meetings would be on how to develop strategies to cut down on the huge losses, which, he said, significantly hurts the economy.
He urged the NIPC to exercise caution and ensure that due diligence is strictly observed in the process of granting pioneer status to companies and businesses in order to check abuses and reduce revenue losses.
Critics say the pioneer status granted the Nigeria LNG by the Babangida/Abacha military administration on inception of the plant has been a drain, as the Federal Government was denied multi-billion Naira in revenues that could have accrued to it from its operations in the last ten years.
The RMAFC Chairman stressed the need for multi-stakeholder collaboration in promoting investment in all critical sectors of the country’s economy. He said this will help fast-track the attainment of national development objectives such as the Vision 20-2020 and the Transformation Agenda of the present administration.
“Nigeria remains an investors’ haven with numerous opportunities in oil and gas, manufacturing, agriculture, telecommunications, chemicals, transport and power sectors waiting to be tapped,” Mr. Mbam said.
To adequately harness the country’s resources, Mr. Mbam said it is necessary for concerted efforts to be made by all relevant stakeholders to attract foreign direct investments, FDIs, through the provision of critical infrastructure, legal and regulatory frameworks and tax incentives.
He said the Commission, through its economic diversification programme, was leading the effort to bring all stakeholders together in the quest to establish the enabling environment for sustainable investment climate.
The coming together, he said, would help turn around the country’s economy, boost its revenue base, create employment opportunities for the teeming unemployed youths and generally improve the socio-economic conditions of the populace.
The NIPC Executive Secretary, Saratu Umar, said her agency had since inception granted Pioneer Status Incentives to about 410 companies in different sectors of the economy.
These, she said, comprise 175 in the manufacturing, 42 in agriculture and agro-allied, 40 in oil and gas, 35 in Information and communication technology and telecommunications, eight in chemical and four in transport sectors.
Mrs. Umar pointed out that the PSI was a fiscal concession designed by government and backed by law to encourage and promote certain targeted industries, activities, products and services identified by the government as priority areas and growth drivers of the economy.
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