ActionAid Nigeria, a Civil Society Organisation (CSO) has raised concerns that some of the tax incentives granted to companies in Nigeria are not serving their purposes.
The Deputy Country Director, Ifeoma Charles-Monwuba, said this on Wednesday in Abuja while addressing a news conference on tax incentives and implications for development in Nigeria.
The conference was addressed alongside other CSOs and stakeholders.
She said the concerns were due to facts that emerged from studies conducted on the nature of incentives granted to foreign investors or companies operating in Nigeria.
She commended the motives of the government in granting the incentives but said that it was increasingly difficult to overlook the downsides of many of them.
“Some of these incentives have since been found to be unnecessary, excessive and unproductive.
“Furthermore, the studies have since shown that most of the assumptions on which tax incentives were granted are wrong and misguided.
“It is contrary to the assumptions that the incentives aid transfer of technology and help in building local capacity.
“It is evident that the nation in no way has benefited in comparable measure to justify continued granting of some of these incentives.’’
She said the incentives had a negative impact on the economy, causing the nation to lose about N577 billion annually.
Charles-Monwuba also noted that granting of incentives to large multi-national corporations impeded the growth of the local industry.
This, she said, was because the large corporations, especially those operating in free trade zones, were given unnecessary advantage thereby killing the small scale industries.
She, however, called on the Federal Government to appraise and evaluate the current regime of incentives in view of current duplicity of roles and existence of many locations where incentives were negotiated.
“We hereby recommend to the Federal Government that there should be in place an inter-agency framework for engaging tax incentives and policy harmonisation.’’
She also urged the Federal Government to take a lead role in ensuring regional integration and cohesion among African countries for a new UN tax body.
She said it would give developing countries more leverage to negotiate the terms of their tax agreements and ensure proper monitoring of tax practices.
As part of recommendations, she said multi-national companies should be transparent by reporting their profits, sales, assets and number of employees and tax payments to governments in countries where they operated.
The country director called for investigation of individuals and corporations mentioned in the Panama leak documents.