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FG Grants Dangote, Honeywell, Others Tax Reliefs and Concessions Worth N16tn – Report
The Federal Government has foregone N16.76tn in revenue to tax reliefs and concessions given to large companies between 2019 and 2021, according to findings by The PUNCH.
As of the end of 2021, 46 companies had benefitted from various tax incentives and duty waiver schemes while the requests of 186 companies were still pending.
These were contained in the tax expenditure statement (TES) reports in the Medium-Term Expenditure and Fiscal Strategy documents posted on the website of the Budget Office of the Federation.
The TES deals with revenue forgone on Company Income Tax, Value Added Tax, Petroleum Production Tax, and Customs Duty.
In the TES report for 2019, it was stated that the Federal Government had forgone revenue of N4.2tn from two main sources, CIT and VAT.
For CIT, the estimated amount of revenue forgone was N1.1tn while N3.1tn was for VAT.
The TES report read, “The most significant conclusion is the large size of Nigeria’s revenue forgone from just two of the main taxes, i.e., CIT and VAT. Nigeria’s non-oil revenue potential is at least twice its current collections.
“The preliminary estimate of revenue forgone from CIT incentives and concessions in 2019 is N1.1tn; for contrast, 2019 CIT collections was N1.6tn. The preliminary estimate of revenue forgone from VAT policy choices and compliance gaps is estimated to be NGN 3.1tn and could possibly be more. It is worth reiterating that revenue forgone from Customs Duty, Excises, Petroleum Production Tax, Personal Income Tax and concessions under the Oil and Gas Zones legislation is still to be computed.”
According to the TES report, the figure for revenue foregone would likely exceed N4.2tn if there were sufficient data, especially from Customs Duty, Excises, PPT, Personal Income Tax and concessions under the Oil and Gas Zones legislation.
By 2020, the figure rose to N5.8tn, with majority of it coming from revenue forgone under VAT. A breakdown showed that N4.3tn was forgone under VAT; N457bn under CIT; N307bn under PPT, and N780bn under customs duty.
It was also noted that five countries accounted for about 86 per cent of total customs relief, with China accounting for nearly two-thirds of total relief granted. Netherlands, Togo, Benin and India were the other top sources of supplies benefitting from the reliefs.
The total figure continued to rise in 2021, hitting N6.79tn, with revenue foregone on VAT accounting for most of it. A breakdown showed that N3.87tn was forgone under VAT, N548.40bn under CIT; N337.70bn under PPT; N1.84tn under customs duty; and N111.15bn under imports VAT.
For the three-year period, therefore, the Federal Government had to forgo a total of N16.79tn in tax reliefs, Customs duty waivers and concessions, according to an analysis by The PUNCH.
Under this figure, tax exemptions covered imported goods covered by diplomatic privileges, military hardware, fuels and lubricants, hospital and surgical equipment, aircraft (their parts and ancillary equipment), plant and machinery imported for use by companies in export processing zones, health and medical supplies to abate the spread of COVID.
Other exemptions included: reliefs on the presidential initiative on COVID-19 supplies, Import Duty and VAT on commercial airlines.
It was also noted that five countries accounted for about 92 per cent of total Customs relief with China accounting for nearly half of the total relief granted. Singapore, Netherlands, Togo, Benin Republic and India were the other top sources of supplies benefitting from the reliefs.
Meanwhile, the beneficiaries of the tax reliefs and concessions included Dangote, Lafarge, Honeywell and 43 other major beneficiaries.
As of the end of 2021, 46 companies had benefitted from the tax incentive scheme while the requests of 186 companies were still pending.
They were beneficiaries of the pioneer status tax relief under the Industrial Development Income Tax Act with tax reliefs for a three-year period.
This was contained in the Q4 2021 PSI report released by the Nigeria Investment Promotion Commission.
The pioneer status is an incentive offered by the Federal Government, which exempts companies from paying income tax for a certain period. This tax exemption can be full or partial.
The incentive is generally regarded as an industrial measure aimed at stimulating investments in the economy.
The products or companies eligible for this pioneer status are those that do not already exist in the country.
These companies included: Dangote Sinotrucks West Africa Limited, Lafarge Africa Plc, Honeywell Flour Mills Nigeria Plc, Jigawa Rice Limited, and Stallion Motors Limited.
Others included: African Foundries Limited, Royal Pacific Group Limited, Kunoch Hotels Limited, Princess Medi Clinics Nigeria Limited, Medlog Logistics Limited, and Masters Liquefied Gas Limited.
The Punch
The first hostages freed from Gaza under a long-awaited ceasefire agreement are back in Israel. The news sparked jubilant scenes in Tel Aviv where large crowds gathered ahead of their release.
The three freed Israeli hostages – the first of 33 to be released over the next six weeks – are Romi Gonen, Doron Steinbrecher and Emily Damari. They are said to be in good health and are receiving treatment at a medical center in Tel Aviv.
In exchange, 90 Palestinian prisoners and detainees are set to be released by Israel from Ofer Prison in the occupied West Bank.
The Israeli military withdrew from several locations in southern and northern Gaza after the truce began earlier on Sunday, an Israeli military official told CNN.
Displaced Gazans have started returning to their homes, while the aid trucks laden with much-needed supplies have crossed into Gaza. Here’s what we know about how the ceasefire deal will work.
Hamas, despite suffering devastating losses, is framing the Gaza ceasefire agreement as a victory for itself, and a failure for Israel.
One of Hamas’ main goals for taking some 250 people during its brazen October 7, 2023, attack on Israel was to secure the release of Palestinian prisoners held in Israeli jails. As Israel pounded Gaza in response, Hamas vowed not to return the hostages until Israel withdrew its forces from the enclave, permanently ended the war, and allowed for rebuilding.
Source: CNN
The leader of UK’s Conservative Party, Kemi Badenoch, has said she doesn’t want Britain to be like Nigeria that is plagued by “terrible governments.”
Speaking on Thursday at an event organised by Onward, a British think tank producing research on economic and social issues, Badenoch expressed fears that Britain may become like Nigeria if the system is not reformed.
“And why does this matter so much to me? It’s because I know what it is like to have something and then to lose it,” Badenoch told the audience.
“I don’t want Britain to lose what it has.
“I grew up in a poor country and watched my relatively wealthy family become poorer and poorer, despite working harder and harder as their money disappeared with inflation.
“I came back to the UK aged 16 with my father’s last £100 in the hope of a better life.
“So I have lived with the consequences of terrible governments that destroy lives, and I never, ever want it to happen here.”
Badenoch has been in the news of late after she dissociated herself from Nigeria, saying she has nothing to do with the Islamic northern region.
She also accused the Nigeria Police of robbing citizens instead of protecting them.
She said: “My experience with the Nigeria Police was very negative. Coming to the UK, my experience with the British Police was very positive.
“The police in Nigeria will rob us (laughter). When people say I have this bad experience with the police because I’m black, I say well…I remember the police stole my brother’s shoe and his watch.”
