Group Seeks Tax Incentive for CSR Projects

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Nume Ekeghe

The Chairman of Strengthen Public Finance in Nigeria, (Strepfin), an international non-governmental organisation, in collaboration with Oxfam, Mr. David Nwachukwu has called for tax incentives to corporations who carry out major corporate social responsibility (CSR) projects in communities they reside.

This call was made during a stakeholders’ meeting on CSR, wages and tax issues held in Lagos recently.
He urged the federal government to reduce borrowing and focus on infrastructure development by encouraging CSR to embark develop their communities.

Nwachukwu said: “Governments is to create an enabling environment for businesses, now if you have multiple taxation it discourages investments in your environment.

“If people have a choice to make investment and I know that when I go to Ghana to make an investment in a project the government would provide basic infrastructure but in Nigeria, you have to provide everything for myself and run my own local government; water, light roads in addition to the cost of doing business and the government would not even allow me claim back some of those expenditures I have made in the community.
“So, it makes Nigeria an unattractive environment for doing business.”

He added: “In the Niger Delta states for example, you would hear people talk about NDDC projects, then the legislatures would talk about constituency projects, the oil companies operating in those areas would also do their CSR projects as well as the state and federal governments.

“All these do not translate to an improved quality of life to those areas. Against that backdrop, we came up with a public finance roadmap that says a lot of effort should be put towards reforming public financing framework for Nigeria so that people can have access to information to interrogate the statistics that we rail out on public financing in the country.”

Continuing, he said: “There is a school of thought that people are reluctant to pay taxes in Nigeria because they do not have confidence in government’s ability to utilise the taxes they pay.

“In other climes, if you are sick and you go the hospital, you would get world class health service, the roads are good, etc, but in our own environment all these things government should provide to us are failing and there is a huge gap between the resources available and provision of those services.

“In this specific case, we are saying that many companies because of government’s failings spend a lot of resources doing CSR, they build schools, roads, hospitals in the government they operate not because it is their responsibility, but because the government has failed and to manage restiveness in those communities, companies spend their resources doing those things.”