The Nigerian government has approved the addition of an electronic monitoring and evaluation framework to the process of granting Import Duty Exemption Certificates (IDEC) to private companies and government establishments towards reducing tax expenditures.
Minister of Finance and the Coordinating Minister of the Economy Wale Edun said the move would provide the Federal Ministry of Finance with a robust automated tool for more effective M & E measurement of the impact of all customs duty exemptions issued by the ministry to government entities, companies, NGOs and international organisations.
Edun said the system is designed to provide a framework to check-mate and restrict ineligible applicants, enforce strict compliance to fiscal policy measures and provide a robust impact analysis of tax incentives on the economy. “This would further eliminate the misuse of tax expenditures; support the delivery of economic outcomes from fiscal incentives and strengthen the direct measurement of the impact of tax incentives on the economy,” the minister said in a statement on Monday.
Key features of the monitoring tool include duty claw-back mechanism, e-report generation; a centralised database; factory geo-location tagging: industry qualification status validation; inter ministries, departments and agencies’ integration; incentive tracking and issuance of Demand Notices to defaulters.
The aim of the import exemption model is to ultimately cut down on the cost of tax expenditure and ensure tax incentives positively impact the economy.
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