Concerns Raised Over Nigeria’s Annual Tax Waivers: N6 Trillion Loss on Par with Revenue Generation
The Chairman of the Presidential Committee on Tax and Fiscal Policy Reform, Taiwo Oyedele, has expressed apprehension over the significant economic implications of Nigeria incurring annual losses of up to N6 trillion in tax waivers.
This staggering amount is approximately equal to the revenue generated by the country each year.
During an appearance on a recent episode of the Channels Television programme, Sunrise Daily, Oyedele confirmed the figure highlighted by the Senate, emphasizing the considerable financial impact of these tax waivers.
He expressed concern about the lack of measurement regarding the actual impact of these waivers on the country’s economy.
Oyedele pointed out that the annual loss of N6 trillion through tax waivers is especially troubling when considering the nation’s modest revenue base.
In 2021, the Federal Inland Revenue Service (FIRS) generated just about N6 trillion in revenue.
The chairman questioned the wisdom of such substantial giveaways, highlighting the need for a thorough evaluation of their economic benefits.
While acknowledging the importance of exempting essential items from value-added tax (VAT), such as basic food items and medical expenses, Oyedele stressed the need for a balanced approach.
He mentioned specific interventions, such as the suspension of VAT on diesel and import duties, aimed at addressing social impact concerns and preventing potential unrest.
The tax reform committee, chaired by Oyedele, is actively considering a new incentive regime.
The committee is meticulously reviewing existing waivers and incentives, evaluating their necessity, targeting, and potential economic impact.
Oyedele emphasized the importance of incorporating “sunset provisions” into these incentives, ensuring periodic reviews based on data and stakeholder engagement.
This approach aims to prevent long-term financial losses and align incentives with the evolving economic landscape.
Source: Nairametrics
