Civic groups, experts react to 10 years tax incentive granted Dangote by Nigerian govt

Aliko Dangote, President, Dangote Group
Aliko Dangote, President, Dangote Group

Nigerians have reacted to the review of the five-year tax incentive enjoyed by Dangote group to ten years by the Nigerian government for the rehabilitation of some roads in the country.

The Minister of Power, Works and Housing, Babatunde Fashola, had announced the government’s decision while speaking at the Businessday Road Construction Summit, held in Victoria Island, Lagos, last week.

Mr. Fashola revealed that the government had reviewed the five-year limit on tax order enjoyed by the group to a 10-year period to sustain private investment in road infrastructure, because it is a long-term asset.

The minister also announced that construction of the Apapa to Oworonshoki end of the Lagos-Ibadan expressway has been handed over to the company.

But speaking in separate interviews with PREMIUM TIMES, tax experts and civil society organisations officials expressed concerns about the agreement.

Tunde Aremu, Policy Advocacy and Campaigns Manager at ActionAid, a non-governmental organisation, said although not all tax incentives are bad, but the approach to granting such incentive is important because some are not transparently handled.

“As ActionAid has always maintained, not all tax incentives are bad but some are questionable. There are issues of mindsets and principles that drive the granting of the incentives. There are also concerns as well on the processes and approaches of the grant of the incentives,” he told PREMIUM TIMES in an interview.

“A critical question that needs to be asked is what was done with the earlier incentives granted. Has there been an audit of the delivery on the existing or previous tax breaks given? Has the company granted the incentives delivered on the condition for the grant?” he asked.

Mr. Aremu also expressed reservations for the granting of incentives and waivers beyond three years, saying the decision is counterproductive and illegal.

“The granting of incentives beyond three years is contrary to existing laws and is thus illegal. It is not just an abuse of system, breaking of the rules but it is also a brazen show of contempt of the citizens who have expressed concerns over similar actions in the past. It shows those taking such decision hold the people and the laws in contempt.”

On his part, Chinedu Bassey of the Nigeria Tax Justice and Governance Platform, told PREMIUM TIMES that if not properly allocated, tax waivers promote inequality.

He said: “As a matter of issues we have always talked about, we are not against industries being encouraged in Nigeria to get their feet on because we want to encourage the productive sector to be up and running. But over time we have seen that it is rather counterproductive because the company or an entity or a portfolio like the Dangote group we all know has the capacity to stand and support the economy by paying their proper taxes to support the economy to come up.

“Our question has always been: it’s not about the incentive but who really deserves an incentive. We see that as counterproductive to the economy and a trend that is promoting injustice and inequality because if a company like Dangote group is not paying tax and a small company is compelled by tax authorities to pay one tax or the other; maybe single, maybe multiple and from wherever place: federal, state or local government, we see that as a show of injustice and something that is creating poverty.”

Speaking with PREMIUM TIMES on Friday, Musa Rafsanjani, executive director, Civil Society Legislative Advocacy Centre (CSLAC), said tax waivers given without due process could lead to loss of revenue for the nation.

“First and foremost,” he said, “we have concern in the manner in which tax waivers have been given to private companies in Nigeria particularly also some of the corporations because where you give out tax waivers, it is supposed to be an incentive to complement because these are supposed to be collected for the development of the country.

“If the government uses its political will to give waivers to companies without following due process, it can be tantamount to a lot of abuse,” he explained.

Mr. Rafsanjani argued that tax waivers have always been subjected to abuse in Nigeria, a development that has done a lot of damage to the nation’s economy.

“The revenue generated for Nigeria was very poor because of the compromise by some of the government officials who gave tax waivers to so many companies which they allegedly were part of. So, what they did in the past was to bring in companies that they were part of or have interest in and give waivers.

“MTN also enjoyed huge waiver from the Nigerian government which was not actually done transparently,” he added.

Commenting on the Dangote incentive, he called for proper monitoring of the process in a transparent system that would involve civil society organisations working in the area of tax.

“On the case of this new agreement with Dangote, first of all we would have appreciated if there was proper monitoring mechanism to ensure that what Dangote company would do for the (road) development would cover the tax (waiver) that the company is supposed to be given; to ensure it’s actually properly monitored and measured. The government official may not pursue compliance with some of these agreements.

“We would have expected the government to set up committee that would involve genuine responsible civil society organisations that are working in the area of tax issues so that they can properly monitor what Dangote company is supposed to even pay back in the tax waiver for the development.”
On longer time tax incentives, Mr. Anwal said the practice was unacceptable as it was open to abuse and not easily measurable.

“We do not subscribe to a longer time waiver; it is not proper. Waiver should not be more than two, three years. So that after that, you’d evaluate whether there is a compliance to the beneficiary and all,” he said.

But in his intervention, Taiwo Oyedele, Head of Tax and Corporate Advisory Services at PwC Nigeria, said the decision was a good one given the inability of government to handle certain projects efficiently. He, however, added that whether the decision to grant tax waiver to Dangote group was good for the nation or not would depend on details of the agreement.

“As to whether it (the decision) is good or not good will depend on the details. What you see in the public space may not exactly tell the entire story,” he told PREMIUM TIMES in an interview.
“Government, for example, is highly and largely inefficient. So if government was going to construct the road for example, it would need more money than it should and the quality of the road is not good. So if the arrangement is just that, instead of paying up tax of, say, N5 billion, use the money to construct the road, definitely the private sector would do a better job, in terms of quality and efficiency. To that extent I will say it is fine.

han they are getting, then that’s an issue. But I don’t have the details to say whether this particular deal is in itself good or bad.”

Meanwhile, he Nigerian government is awaiting the design of the 35 km stretch excluding the about 7 km portion that has been completed by the previous administration around Mile 2 area.

Mr. Fashola, commenting on the plan, said the design will determine the scope of work on the road.
“From the design, we will determine the cost and the scope of works which we hope can be executed quickly,” he said.


DOWNLOAD THE PREMIUM TIMES MOBILE APP

Now available on

  Premium Times Android mobile applicationPremium Times iOS mobile applicationPremium Times blackberry mobile applicationPremium Times windows mobile application

TEXT AD:DIABETES Is CURABLE! Don't Let It Threaten You! To NORMALIZE Your Blood Sugar In 21Days For Life, Click Here!!!.


All rights reserved. This material and any other material on this platform may not be reproduced, published, broadcast, written or distributed in full or in part, without written permission from PREMIUM TIMES.


  • olowoyojoel

    I live in rural Ekiti/Ondo and know that Dangote trucks damage the roads more than any other. An example is the state road between Igbara oke and igbara odo. Dangote trucks were plying this road in thousands per week carrying cement from obajana, and white sand to Obajana. They have abandoned the road now that it’s not motorable. There are several roads like that in Nigeria. Even if they pay correct tax its not enough to maintain these roads, now the govt gives him tax relief. This is unacceptable. Dangote group should in fact pay extra tax bcos it is making money at the expense of tax payers. As social responsibility he should voluntarily repair many roads in. Nigeria.

    • Delta_Quagmire

      Your people worship these Northern oligarchs to their eternal detriment. The incentive was announced by no other than Fashola.
      Peak your poison pill wisely.

      • bashwaziri

        I know one mor.on would play the ethnic card. Can’t you people for once comment with your brain? Can’t you copy from other commentators?

        Back to the issue under discussion. Are the Northerners benefitting more than the South from Dangote? 90% of all Dangote’s investments are located in the South. Most of his workers are Non-Hausas. So what r u blabbing for?

        • marcos avelino

          They are a silly ignorant bigoted and angry people.You can see from the rude and violent commets every where. Every fault is hausa fulani. They are angry they want to enjoy life like the westerners without work , that’s why all these indolent lazy call for restructuring miracle.

        • Abdul

          Don’t mind the hooligan.

      • AryLoyds

        Thank you , we know this tax breaks are bad for the economy, but hey who is can complain against the blue bloods who own Nigerian? The tax money would have been more than enough for the rehabilitation of more roads around the country

      • olowoyojoel

        This has nothing to do with tribe. By the way Fasola can’t do it alone without presidential approval.

  • thusspokez

    “Our question has always been: it’s not about the incentive but who really deserves an incentive. We

    Mr. Dangote has no shame. He is a billionaire scrounger on the state; and given the handouts, monopoly and other forms of help he has received (and continues to receive) from various Nigerian governments, you wonder why he is not the richest man in the World. Maybe he is not that good a business man — that’s why.

    • Abdul

      Shut up, go and start your own business then ask govt to grant you tax holiday. Always talking trash on the internet. start your own business na.

      • Screw-em

        They will only seek how to break up the country not how to build the nation. Their greed and selfish ambitions know no bounds. Idiots!!!

        • thusspokez

          They will only seek how to break up the country not how to build the nation

          Who are the “they”, mumu?

          Here is a man fleecing your Nigerian government and has done so for decades and you call people pointing out his scam, trying to break up Nigeria?

          Nigeria is where it is because there are too many mumus like you in the country. You are incapable of differentiating right from wrong or a hard working person from someone who fleeces governments. Or maybe he is from your part of the country and therefore can do no wrong in your eyes even if he raped a member of your family — which is after all, not worst than fleecing a country of 167+ million people.

          • GusO

            You’re always negative in the social media. Are angry and quarrelsome person?

          • Screw-em

            The likes of you is yet to run a fruits stand in Ajegunle, but will keep bragging about unverifiable “success” as a business buffoon. The western country you are coughing from give tax breaks to well established firms to keep them afloat. Do you know what corporate welfare is? Dindiri!!!

      • thusspokez

        …Shut up, go and start your own business then ask govt to grant you tax holiday. Always talking trash on the internet. start your own business na.

        Dear mumu, I run my own business and once upon a time, I worked up to 14hrs a day. Today I am an employer and can retire at a very early age and never work again.

        I did it with my small investment after leaving uni and determination and very hard work — and no help from any western government. Dangote keeps fleecing Nigerian governments even as he calls himself a billionaire. BTW I shall soon be setting up a branch of my business in Nigeria, and I intend to do so without a kobo from any Nigeria government — indeed I don’t want any politician near my business. Once again SHAME on Dangote for keep fleecing Nigerian governments.

    • Ndidi

      Has Dangote ever paid any tax? I first need to see CONCRETE evidence myself that Dan got group has ever paid any tax. Ever.

  • King Bibinama

    Buhari and his APC actors like their fellows in PDP are very corrupt. The difference between the two camps is that the the former are experts in manipulating the psyche of the unsuspecting, helpless and poorly informed masses. The Dangote tax waiver ploy should be easy to see through.
    1) it secures a free flow of cash from the business mogul to APC for a well planned 2019 electoral fraud
    2) this government is not serious about countering or minimizing institutional corruption. If they were tax incentives should be policy based, transperent and open to all players. It should not be selective or exclusive or negotiated on a company basis. It should be a a clear act of the law available to all business players according to the laid down rules
    3) this government is seriously opposed to popular clamor for political restructuring. Their approach to the debate on reviewing the Exclusive List including devolving powers and responsibilities to states is this depraved tax incentives by Exclusive Pick.
    4) etc etc
    What’s most surprising though is the ease with which the Nigerian are cajoled and manipulated. What’s the true literacy rate statistics by the way?

  • Reginald Dandeson

    This is corruption incorporated. I advise the Civil Society groups to institute legal action on this mad tax incentive granted to the Dangote group for many reasons. It is an open secret that the man Dangote is a wheeler-dealer with any government that is ready to play ball. This tax incentive has everything to do with 2019 politicking for the current government. Unfortunately in Nigeria, political parties are not under obligation to make open their sources of funding.

    It is indeed ironical that this tax incentive happens to do with the Roads Sector in Nigeria. For those who move around Nigeria a lot, you’d observe that the Dangote Cement Truckers constitute the greatest sources of damage to Nigerian roads. The scenes have become really sickening.

    To make matters worse, for over a decade, the federal road that feeds the Dangote Cement Company at Gboko, Benue State, has been the worst section of the Makurdi-Katsina Ala road, especially the section directly in front of the Company. If you are thoughtful enough, as you get to that section, you get to wonder if this Trillion Naira Dangote group actually knows what is called Corporate Social Responsibility. To imagine that such a company is being granted a ten-year tax break reeks with the highest level of insult to Nigerian road users. Civil Society organizations should, please, challenge this malfeasance in the courts of law.

  • aboki

    TAX INCENTIVES is a common exercise in most of the developed and development NATIONs across the globe.
    In Germany Volkswagen to mentioned one benefits in this type of economic policies.
    General Motors in Detroit and Microsoft are few in numerous companies in America that are enjoying this waiver.
    Above examples may have vindicate the Nigerian government as they barrowed aleaf for the benefits of the NATION’S ECONOMY.
    Sentiments aside with due process the gesture can be felt economically.