Members of the House of Representatives have unveiled plans to review the nation’s tax laws, with the intent of eliminating tax holidays to multinationals, especially in the areas of telecommunications, maritime, power and oil and gas.
Other stakeholders, including Tunde Aremu, manager, ActionAid’s Policy Advocacy and Campaigns, and Mitchel Lecomte, consultant to European Commission (EC), have also expressed solidarity for the initiative.
Kehinde Odeneye (APC, Ogun), who gave the information during an interactive session with civil society organisations (CSOs) and other stakeholders held at the National Assembly complex, Abuja, said participants at the meeting expressed displeasure over the huge amount lost to indiscriminate waivers granted to the multinationals, urging the Federal Government to discontinue the granting of tax incentives and holidays to multinational companies as such gesture was detrimental to the economic growth of the country.
“We are going to demand for an audit of all the tax incentives enjoyed by both foreign and local companies. In addition, we are going to really take on the challenge by ActionAid to investigate the roles of agencies and individuals involved because cases of manipulations and conspiracy have been established,” Odeneye said.
“Looking at our tax laws, there are so many loopholes that have been manipulated which makes it expedient to be amended for a good tax environment. The time is now to review it, and it is going to be holistic cutting across all sectors, telecommunications, oil and gas, maritime, power, no sector would be excluded in the audit and review,” he added.
In his remarks, Mitchel Lecomte also noted that the aims of encouraging Foreign Direct Investments (FDI) into developing countries have been defeated with the quantum of funds involved.
On his part, Tunde Aremu disclosed that three multinational companies involved with the Nigerian Liquefied Gas (NLG) enjoyed tax holiday amounting to $3.9 billion.
Aremu argued that tax holidays remains a deliberate means of throwing away the nation’s financial resources by a government that is in dire need of funds to fix its decaying infrastructure and economy.
He also described tax incentives enjoyed over the years by multinationals operating in the country as theft because the incentives were not only unnecessary but manipulated.
While noting that Nigeria loses $2.9 billion annually to these tax incentives, Aremu called on the National Assembly to probe the processes of granting the tax incentives.
“How are these incentives negotiated? Because some of our suspicion is that the processes of negotiating these incentives are not open. The companies go under the rugs to negotiate these incentives,” he said.
“The Nigerian parliament should start querying the processes and demand that they should be open and transparent and that the representatives of the people should be informed when these incentives are being negotiated in order to have a say if they are necessary or not,” he added.
He described e-trading, over-invoicing, mispricing and price shifting as some of the technical terms adopted by the companies to encourage illicit financial flow from the country.
“The bulk of the money leaving Africa that we are losing contrary to impression is not due to corruption, crime, drug trade or trade in human trafficking or other crimes. Over 75 percent of the money leaving Africa illicitly is actually through tax avoidance practices which unfortunately are not regarded as illegal,” Aremu said.
KEHINDE AKINTOLA
