|The Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala|
A report by the Budget Office of the Federation obtained by THISDAY showed that organisations operating in agriculture, oil and gas, power and education sectors were the major beneficiaries.
In all, a total of 64 different organisations were granted waivers with several of them claiming supply of machinery, equipment and spare parts, plants, equipment and core drilling rigs.
THISDAY findings revealed that grants, tax holidays granted to corporates by the federal government and failure by many Nigerians to pay their taxes is costing the government about N1 trillion in valuable tax revenue annually.
As a result, Nigeria has consistently ranked along with countries with the lowest tax to gross domestic product (GDP) in the world.
Numbers released by the Federal Inland Revenue Service (FIRS) recently showed that gross collections totalled just 12.1 per cent of GDP in 2013 (8.5 per cent for oil and 3.6 per cent for non-oil). In Brazil the ratio is 32 per cent, and for Organisation for Economic Co-operation and Development (OECD) countries the average is closer to 35 per cent.
Experts believe Nigeria’s poor record of tax collection for the non-oil economy reflects the award of generous tax exemptions, inadequate salaries and overlapping responsibilities.
“There is a broader explanation. The ratio for the OECD impresses because collection is generally efficient with the help of computerisation. Additionally, taxpayers are more willing to meet their obligations if they can identify some reciprocal benefits such as a welfare system.
“It is no coincidence in our view that those states in the federation such as Lagos which provide some basic services for the population and channel resources into collection tend to achieve far higher rates of internal revenue generation,” said analysts at FBN
The FIRS had recently reminded corporate Nigeria that firms whose financial years ended in December (2013) are required to meet their tax obligations by the end of June this year.
The warning comes against the background of the service’s underperformance. For instance, the FIRS gathered N418 billion in the second quarter of 2014 against a target of N558 billion.
The Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, had set the FIRS a new target of N700 billion for April and May combined, including at least N400 billion from the non-oil sector.