ActionAid Nigeria has expressed grave concern over a recent announcement by Nigeria’s Minister of Mines and Steel Development, Dr. Kayode Fayemi to offer foreign investors waivers and holidays.
ActionAid, which in a recent study on incentives in West Africa, revealed that the region loses an estimated $6.9bn annually to tax incentives and giveaways, with Nigeria losing the largest chunk – $2.9bn stated that “it is unacceptable that in spite of this and other revelations we made about the country’s loss to excessive incentives, such unproductive and wasteful offers are still considered.”
The minister, who announced the offer of tax holidays at a mining conference in Australia, claimed it would serve as incentives to improve activity in the country’s vastly under active mining sector.
Reacting to the minister’s pronouncement, ActionAid described the minister’s offer of incentives as “unnecessary and a reversal of a recent progressive decision that saw the withdrawal of pioneer status previously granted companies.”
According to the Country Director of the Anti-poverty agency, Ms. Ojobo Ode Atuluku, tax incentives as a means of attracting foreign investors is outmoded and no longer considered a major reason for investors looking at such a country as vast as Nigeria as an investment destination.
Atuluku said that with its abundant resources, a vast and available market, a free-market economy, indiscriminate access to banking and financial services, the investors need no further incentives.
Noting an ongoing process for review of the tax system through a recent call for memorandum, she said what is urgently needed now is an audit of existing incentives to determine the cost and benefit to the nation, not another series of Santa gifts to foreign investors who do not need it.
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