Organised labour as well as Civil Society Organizations (CSOs) have called on the federal government to consciously look inward to reduce and ultimately eliminate tax incentive abuses as against the mind-blowing penchant for internal and external borrowing.
This call was made during the launch of a report conducted by Public Services International (PSI) affiliates in Nigeria, with funding from the Friedrich Ebert Stiftung (FES) Nigeria.
According to the report, governments lose between $50 million and $500 million per year because of tax incentives provided to companies in export processing zones.
The report noted that the Nigeria Export Processing Zones (NEPZ) were developed to boost exports, attract foreign direct investment, and create jobs in the country.
However, the report said corporations now abuse the provisions of the Act establishing the Export Processing Zones, thereby making the country to lose huge sums of revenue.
The labour unions and Civil Society Organizations urged the government to reform this Act to reduce the amount of revenue loses because of what they described as the ridiculous tax incentives granted these corporations.
Speaking, comrade Sani Baba, the Regional Secretary of Public Services International (PSI) opined that “for a country seeking ways to mobilise internal finance necessary for shoring up spending in social services provisions such as education, potable water, sanitation and hygiene support and healthcare, it ought to be seeking imaginative, timely and effective ways to cut these abuses”.
Also speaking, Comrade Peters Adeyemi, Vice President of PSI noted that “these are funds that ought to improve the payment of wages and living conditions of workers, build public schools and supply adequate teaching staff and materials to public schools, provide the required conditions to reinforce girl-child education, improve health services and delivery, develop a sustainable infrastructure and energy sector, and a strong domestic production sector”.
According to Adeyemi, by affirming these reforms canvassed by the PSI, government can generate billions of Naira to address the debt crises in Nigeria.
Meanwhile, Tax and development experts have described these abusive tax exemptions and incentives as contraventions to the mandate of the Federal Inland Revenue Service to generate funds domestically to fund national development.
They said it is, therefore, necessary and urgent to commence reform to, aside from sourcing internal resource mobilization possibilities, also increase transparency and accountability of the operations of the corporations in these zones, including the participation of labour unions in these zones.
The unions and CSOs have committed to lend their voices and support to the necessary reform processes.