Tax concessions not important in attracting foreign investments to Nigeria — expert

 

A tax expert, Mr Kenneth Chukwu said that Nigeria could generate more revenue through taxation of Investors rather than granting tax concessions to encourage them to stay in the country.

Chukwu said this on Sunday in an interview with the News Agency of Nigera (NAN) in Abuja.

He said that Nigeria’s policy of granting tax breaks and waivers to fast-track development in the country was a policy that only produces figures and not realistic growths.

“First of all, we have people in government who are coming from neo-liberal perspective, bringing in neoliberal principles which is strictly about the market and not about the people.

“So for them, It Is about the Gross Domestic Product (GDP) growth and figures they can bandy around saying that the economy is doing well, it is growing, in spite that we have an increasing level of poverty.

“We have policy makers who believe that by all means we must attract Foreign Direct Investments.

“However, a World Bank study has shown that tax incentives are the least important thing to investors when they are moving into a country,” he said

Chukwu said that the key attraction of investors to a country was the market prospect and infrastructure that could support their businesses.

“Unfortunately, we don’t have those in Nigeria because government has not invested well in infrastructures.

“But we have the market. Don’t forget that we have a population of about 200 million people.

“Let us assume only 10 per cent of that population is patronising a particular product. That is about 20 million which is bigger than some nations on the continent.

“That means there is huge market here in Nigeria, so the incentives that are given is like throwing our dinner to the dogs,” he said.

Chukwu urged the government to review its policies and enforce strict sanctions on foreign companies that come in and act outside the agreed terms and conditions of their operations.

“We have situations whereby a company is entitled to a five-year tax break and where there is need for extension, it should not be extended more than two or three years.

“But you find a situation whereby companies are now perpetually on tax incentives.

“There is evidence that there are some companies that are given five year tax break, but they have been operating in our jurisdiction for over 25 years and they have not paid tax.

“There are also companies that come to Nigeria, they operate for five years, after getting tax incentives, they then claim that due to some challenges, the company is being sold.

” And the regulatory bodies don’t check the list of the board members. The company will just change its name, and claim that they have transferred ownership and then negotiate for another five year incentive,” he said.

Chukwu called on the government to address these issues, adding that the country could not afford to continue giving out tax incentives and losing part of its revenue, especially with the alarming rate of unemployment in the country.

-NAN