Stop Granting Tax Holidays, Waivers to Power Sector Operators, Govt Urged


Abimbola Akosile

The Federal Government has been urged to stop further granting of incentive, tax holidays or waivers to the operators of the power sector.

Government was also enjoined to declare a state of emergency in the power sector and prioritise investment in the sector, and that the entire privatisation process should be reviewed and evaluated, both the technical and financial capacities of the operators.

The calls were made by the Tax Justice and Governance Platform in Nigeria, which expressed its concern over news reports that the federal government is considering granting further tax holiday to investors in the power sector to enable it garner investment in the sector.

The Platform in a release issued recently, said “It is no secret that the federal government has been frantic in its efforts to attract private investors since the Power Sector Reform Act was enacted in 2005, which enabled transfer of public control of the Nigerian Electricity Power Authority (NEPA) to the Power holding company of Nigeria (PHCN).”

The release was signed by members of the steering committee of the Platform, including Harry Udoh. Support & Training Entrepreneurship Programme (STEP) for the Akwa Ibom state TJ&GP, Chibundu Uchegbu for the Imo state TJ&GP, and James Eustace for the NLC.

“The major intent of the Federal Government privatising the power sector was to provide a lasting solution to the problem that bedevilled the sector. Contrary to the expectations of the Nigerian citizenry, the power sector has degenerated to an even more deplorable state than before it was privatised.

“Add to the fact that Nigerians are not getting value for the services they pay for, rather, the Nigerian public is paying for darkness and the serial increment in electricity tariff has further impoverished Nigerians”, the release noted.

To the group therefore, “the proposed tax holiday is not targeted at making electricity available for Nigerians but to serve the purpose of the elites who are benefiting from the charade, called privatisation of the power sector.

“The country has lost the revenue that would have accrued from taxes in that sector because of the tax holiday (pioneer status) granted to these investors from inception till date. It is alarming that there is likely to be a further tax holiday incentive given to these investors, who by right ought to have proven their technical and financial capacity as perquisites for participating in the sector in the first instance.”

“Our take is that these operators lacked the capacity in the first place to bid for the blocks. They should not have been pre-qualified talk less of bidding for control of blocks in the power sector.

“There has been tariff hike twice already. A hike borne by the ordinary Nigerians paying for services they have not received. Even with the price hike, these ‘investors’ are yet to find their footing and provide Nigerians with the needed power”, the group added.