Action Aid Faults FG over Tax Holiday to Multinational Firms

Adedayo Akinwale ín Abuja

ActionAid Nigeria has lamented that the tax holidays given to multinational companies by the federal government was hurting local businesses and Small and Medium Scale Enterprises (SMEs) in the country.

ActionAid Country Director, Ene Obi, stated this yesterday in Abuja at the launch of tax incentives report in Nigeria, adding that aside the burden on SMEs, Nigeria was also losing billions to tax incentives

Obi, who was represented by the Director, Human Resource and Organisational Effectiveness, Funmilayo Oyefusi, described tax holidays as ineffective and inappropriate by allowing multinational companies to enjoy a limitless tax holiday, hence, the need for the federal government to put a limit to the incentive.

“We know that we are losing billions of dollars in tax incentives, there are lots of multi-national that are being given tax holidays, that’s not appropriate. It’s not effective. There is no point giving tax holiday to a multinational limitlessly.

“We want the tax holiday to be within a specified period after which they can start paying appropriate tax in the country, so that we don’t overburden the local businesses and the SMEs in Nigeria,” Obi said.

On the proposed Value Added Tax (VAT) increase, Obi said Nigerians would only be committed and willing to pay tax if government channel proceeds from tax to the provision of infrastructure and basic social amenities.

She expressed concern that Nigerians who are paying taxes are not enjoying the full benefits of such taxes as basic infrastructure is not made available.

The country director pointed out that significant number of Nigerians who pay tax still pay heavily for basic infrastructure, such as light, water, etc, which further pushed citizens below the poverty line.

“It’s not just making VAT increase in isolation and forgetting the other aspects of the tax, and if you are collecting the tax, make sure you are providing the infrastructure. So that Nigerians don’t use the remaining money left after paying tax to service basic amenities. That’s the reason why poverty is increasing in the country,” she said.

She advised the federal government to provide basic infrastructure for a few tax-paying Nigerians in order to encourage those who are not paying yet.