Tax expert disagrees with them

By Franklin Alli

THE Organised Private Sector, OPS, yesterday, faulted the call on the Federal Government by the International Monetary Fund, IMF, to scrap tax holidays and exemptions given to companies. The Senior Resident Representative and Mission Chief for Nigeria, Africa Department, IMF, Mr. Amine Mati, had described the tax holidays and exemptions as forms of corruption while making a presentation at a forum organised by the Chartered Institute of Bankers of Nigeria, CIBN, recently.

President of Manufacturers Association of Nigeria, MAN, Frank Jacobs, stated yesterday: “It is ridiculous for IMF to come up with such recommendation because they probably don’t understand the need for such incentives considering the conditions under which manufacturers operate in this country with poor roads, high cost of funds, non-existing rail system and other challenges.

“I think the policy makers are aware of why they are giving those incentives; they have to find a way to compensate for the harsh operating environment and they are doing it to attract investments into those sectors. And of course, everybody knows what will come out of that at the end of the day-job creations, technology transfers, etc.”

Also, Muda Yusuf, Director General, Lagos Chamber of Commerce and Industry, LCCI, stated: “I don’t agree with IMF that tax incentives should be scrapped, rather, I would say they should be managed in a transparent and equitable manner.”

While noting that the real sector of the economy needed as much incentives as possible because they were operating in a very difficult business environment, he said, “The operating cost is so high and there are acute infrastructure deficiencies and unless they are supported through incentives, it may be difficult for some of them to be able to sustain their investments.

“The administration of tax incentives should be transparent and equitable. And if that is done, we won’t have issues with giving tax holidays and all that, especially for sectors that are operating in a very difficult environment, especially those who are in the manufacturing, construction, agriculture even infrastructure investors, government should give as much incentives to them as they can.”

However, on his part, a  former President of Chartered Institute of Taxation of Nigeria, CITN, Chief Mark Dike, said he was of the opinion that the government should create an enabling environment and provide general incentives for companies, adding that tax waivers and holidays could create a lack of level playing field. According to him, the government can reduce the tax rate to enable every company and individuals to pay.