Home News FG Grants Dangote, Honeywell, and 44 Others A N16 Trillion Waiver

FG Grants Dangote, Honeywell, and 44 Others A N16 Trillion Waiver


According to research by The PUNCH, between 2019 and 2021, tax relief and concessions provided to huge firms cost the Federal Government N16.76tn in revenue.

By the end of 2021, 46 businesses had benefited from various tax advantages and duty waiver programs, while 186 businesses’ requests were still being processed.

The Medium-Term Expenditure and Fiscal Strategy materials provided on the website of the Budget Office of the Federation featured these in the tax expenditure statement (TES) reports.

The TES is concerned with lost revenue from company income tax, value-added tax, petroleum production tax, and customs duty.

According to the TES report for 2019, the Federal Government lost out on N4.2 trillion in revenue from its two main sources, CIT and VAT.

The projected revenue lost was N1.1 trillion for CIT and N3.1 trillion for VAT.

The most important finding, according to the TES research, is the quantity of the money Nigeria forgoes from just two of the major taxes, namely CIT and VAT.

Potential non-oil revenue for Nigeria is at least twice what it is now.

“According to an initial projection, N1.1 trillion will be lost in 2019 due to CIT incentives and concessions; in comparison, CIT receipts were N1.6 trillion.

The early estimate of lost revenue due to VAT policy decisions and compliance issues is NGN 3.1 trillion, although it may be higher.

It is important to reiterate that the money lost from excises, petroleum production tax, personal income tax, and concessions under the law governing oil and gas zones still has to be calculated.

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According to the TES research, if there was enough information, particularly from Customs Duty, Excises, PPT, Personal Income Tax, and concessions under the Oil and Gas Zones Act, the amount of money lost would certainly surpass N4.2 trillion.

The amount increased to N5.8 trillion by 2020, with the majority of that money coming from revenue lost to VAT. According to a breakdown, N4.3tn under VAT, N457bn under CIT, N307bn under PPT, and N780bn under customs duty were lost.

Additionally, it was discovered that five countries accounted for roughly 86% of all given customs assistance, with China receiving close to two-thirds of it.

The other major supply sources that benefited from the relief measures included the Netherlands, Togo, Benin, and India.

The total amount reached N6.79 trillion in 2021, with revenue lost to VAT accounting for the majority of it.

According to a breakdown, N3.87tn in VAT, N548.40bn in CIT, N337.70bn in PPT, N1.84tn in customs duty, and N111.15bn in imports VAT were forgone.

Therefore, a study by The PUNCH found that throughout the course of the three years, the Federal Government was forced to forego tax exemptions, customs duty waivers, and concessions totaling N16.79 trillion.

Tax exemptions included fuel and lubricants, military hardware, hospital and surgical equipment, airplanes (together with their parts and associated equipment), plant and machinery imported for use by businesses in export processing zones, and health and medical supplies to stop the spread of COVID.

The COVID-19 supplies presidential initiative, import duty, and VAT on commercial airlines were among the other exemptions.

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It was also found that five countries accounted for almost 92% of all given customs assistance, with China receiving close to half of it.

The other major supply sources that benefited from the reliefs were Singapore, Netherlands, Togo, Benin Republic, and India.

In the meantime, 43 other significant benefactors in addition to Dangote, Lafarge, and Honeywell benefited from the tax breaks and concessions.

By the end of 2021, just 46 businesses had benefited from the tax incentive program, while 186 businesses’ requests were still waiting.

They received tax benefits for three years as pioneer status recipients under the Industrial Development Income Tax Act.

This was stated in the Nigeria Investment Promotion Commission’s Q4 2021 PSI report.

An incentive provided by the federal government, pioneer status exempts businesses from paying income tax for a predetermined amount of time.

This tax break may be wholly or partially applied.

The incentive is typically seen as a business measure intended to encourage economic investment.

The only goods or businesses that qualify for this pioneer classification are those that are new to the nation.

These businesses were Jigawa Rice Limited, Stallion Motors Limited, Lafarge Africa Plc, Honeywell Flour Mills Nigeria Plc, Dangote Sinotrucks West Africa Limited, and Honeywell Flour Mills Nigeria Plc.

Additionally, there were African Foundries Limited, Masters Liquefied Gas Limited, Royal Pacific Group Limited, Kunoch Hotels Limited, Princess Medi Clinics Nigeria Limited, and Medlog Logistics Limited.


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