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Published On: Wed, Mar 26th, 2014

FG urged to stop tax holiday to multinational companies

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By Clem Khena-Ogbena

The Federal Government of Nigeria has been called upon to stop granting Tax Holiday to multinational companies in the country.

The Action Aid-Nigeria made the call, while its members were protesting against the policy in the premises of the Transcorp Hilton Hotel, venue of The Seventh Joint AU Conference of Ministers of Economy and Finance, and Economic Commission for Africa Conference of African Ministers of Finance, Planning and Economic Development, which opened yesterday, in Abuja.

The spokesman for the placard carrying protesters, Mr. Donald Ideh, who is also the True Justice Adviser to Action Aid, insisted that the Tax Holiday policy of the government, designed to benefit foreign multinational companies in the country at the expense of local industries, had to be abrogated, for the nation’s industrial growth and development.

Ideh added that a situation in which a multinational companies were always granted a 50-year tax holiday amounted to an economic suicide and absurdity, especially in an economy whereby local industries and even micro, small and medium enterprises MSMEs had been struggling to survive under the heavy weight of multiple taxes.

He further maintained that the country’s tax policy be reviewed and adjusted, such that the tax incentives and waiver systems could be used to support the needs of the economy as well as build the capacity of the Federal Inland Revenue Service (FIRS), with a view to tackling hamful practices, such as transfer pricing.

According to him, revenue from taxes was required to improve investment-attracting factors and social infrastructure, including: roads, schools, hospitals, water, among others.

While appealing to the federal government not to honour the double taxation agreement it signed with Mauritius a couple of years back, Ideh stated: “In August, 2012, Nigeria signed a double taxation treaty with Mauritius, that is waiting to be ratified by the government. If ratified, this treaty will result in a significant loss of tax revenue for Nigeria. India has a similar double taxation treaty with Mauritius and is now considering reviewing it after realising it creates tax revenue losses of $600 million a year.

“The money the government receives from taxes pays for our schools, hospitals, roads, electricity and other social services. If the government reduces tha amount of tax foreign companies have to pay, it reduces the amount of money we have for these services. And the amount is plentiful! In Nigeria, harmful tax practices amount to a loss of billions of naira per year.”

By Clem Khena-Ogbena
The Federal Government of Nigeria has been called upon to stop granting Tax Holiday to multinational companies in the country.The Action Aid-Nigeria made the call, while its members were protesting against the policy in the premises of the Transcorp Hilton Hotel, venue of The Seventh Joint AU Conference of Ministers of Economy and Finance, and Economic Commission for Africa Conference of African Ministers of Finance, Planning and Economic Development, which opened yesterday, in Abuja.The spokesman for the placard carrying protesters, Mr. Donald Ideh, who is also the True Justice Adviser to Action Aid, insisted that the Tax Holiday policy of the government, designed to benefit foreign multinational companies in the country at the expense of local industries, had to be abrogated, for the nation’s industrial growth and development.Ideh added that a situation in which a multinational companies were always granted a 50-year tax holiday amounted to an economic suicide and absurdity, especially in an economy whereby local industries and even micro, small and medium enterprises MSMEs had been struggling to survive under the heavy weight of multiple taxes. He further maintained that the country’s tax policy be reviewed and adjusted, such that the tax incentives and waiver systems could be used to support the needs of the economy as well as build the capacity of the Federal Inland Revenue Service (FIRS), with a view to tackling hamful practices, such as transfer pricing.According to him, revenue from taxes was required to improve investment-attracting factors and social infrastructure, including: roads, schools, hospitals, water, among others.While appealing to the federal government not to honour the double taxation agreement it signed with Mauritius a couple of years back, Ideh stated: “In August, 2012, Nigeria signed a double taxation treaty with Mauritius, that is waiting to be ratified by the government. If ratified, this treaty will result in a significant loss of tax revenue for Nigeria. India has a similar double taxation treaty with Mauritius and is now considering reviewing it after realising it creates tax revenue losses of $600 million a year. “The money the government receives from taxes pays for our schools, hospitals, roads, electricity and other social services. If the government reduces tha amount of tax foreign companies have to pay, it reduces the amount of money we have for these services. And the amount is plentiful! In Nigeria, harmful tax practices amount to a loss of billions of naira per year.”

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