Economy
Long-Term Tax Incentives to Firms for Projects Dangerous—CISLAC
By Modupe Gbadeyanka
Federal Government has been warned to avoid institutionalising a policy of the granting of long-term tax incentives to corporate businesses to achieve project implementation.
According to the Civil Society Legislative Advocacy (CISLAC), this has the tendency to create a distorted fiscal picture necessary for sustainable revenue and expenditure planning for infrastructural development.
In a statement signed by the Executive Director of CISLAC, Mr Auwal Ibrahim Musa (Rafsanjani), it was also noted that granting long-term tax incentives to firms for project implementation was susceptible to abuse and could create complex tax administration frameworks that would result in long term revenue loss to the nation.
“We are worried that the failure of government to deliver on its promise to Nigerians on infrastructure development, after over two years in office, due to the financial challenges because of dwindling revenues from oil, is driving her into panic mode and making her resort to desperate measures, including falling back on discredited and obsolete approach of handing out tax incentives to show results, probably for electioneering campaign prelude to 2019,” Mr Musa said.
The Executive Director pointed out that, “This must however not be done at the expense of long term national interest and development.”
He said CISLAC finds it disturbing that a country that is posting a debt to GDP Ratio of 16 percent and a budget deficit of about 31 percent of her annual budget in 2017, planning to borrow another $5.5 billion (about N1.9 trillion) to fund the 2017 budget, while already spending about 36 percent of scarce revenues to service debts and is in danger of losing international funding to provide social services, still finds it convenient to concede revenues through the use of incentives.
That this is done in exchange for road construction is quite embarrassing and an indictment of the government, he said.
“We remind the government that in the era of falling prices of commodities, including oil, dipping national oil reserves and waning demand for fossil fuels, countries are seeking alternative sources of revenues through domestic resource mobilization with emphasis of maximizing tax revenues to finance development and meet SDG goals.
“They are blocking tax loopholes, addressing illicit financial flows, tackling tax evasion and avoidance, re-negotiating fiscal regimes in contracts and doing away with granting of tax incentives.
“CISLAC understands that the arrangement reached with the Dangote Group to offer tax incentive in exchange for road construction falls within the purview of the CITA (Exemption of Profits Order 2012).
“However, the new National Tax Policy envisages that tax incentives are sector based and not directed at entities or persons that should provide a net benefit to the country, and equally available to all persons in the same class and be very clear and avoid ambiguity.
“We find no evidence that these principles have been followed in this case. The fact that the design and cost of the proposed road project is unknown, reveal the quality of thinking that went into this decision.
“We also find the review of the Order to extend from five years to ten curious. We are aware that this tendency for hasty and discretionary award of tax incentives is what makes it prone to abuse and corruption as has been with previous arrangements such as the Pioneer Status Incentives which this administration have had to cancel and review.
“For instance, have other cement companies being offered the opportunity to construct roads in exchange for tax incentives? How many of such is government willing to grant and what will be the cost? Is such concession exclusive to some entities? How many micro, small and medium enterprises businesses that have funded road rehabilitation, sunken boreholes and provided other public benefits to which the CITA (Exemption of Profits Order 2012) also applies have benefited from the order?
“CISLAC observes that the process leading up to this has lacked clarity and transparency as a cost-benefit analysis and report has not been publicly disclosed; there are no indications that similar corporate entities were offered equal opportunity.
“We find the very idea of offering firm tax incentives to build a road from which it directly benefits undesirable.
“We therefore call on the Minister of Finance to review this decision and ensure that this practice is stopped to avoid setting a dangerous trend that would hurt the nation in the long run. The actual revenue forgone should be computed and announced for all Nigerian to know by January 2017, as envisaged by the National Tax Policy.
“The process should be open to all potential beneficiaries in the sector, if it must proceed for fairness and equity.
“The FIRS should undertake a thorough audit at the appropriate time and publicly declare the implication to revenue to the Nigerian people.
“We call on the National Assembly Committees on Finance to interrogate this decision to ensure that it passes the tests of transparency and equity and is truly in the national interest. The relevant Committees must carry out effective oversight to ensure value for money, especially since any such incentive is meant to take effect only after the road project is completed.
“We call on the federal government to be mindful of the widening fiscal deficit, increasing national debt and wide infrastructural gap and bleak oil revenues and address these through better tax administration, tackling tax evasion and avoidance and illicit financial flows and ensure that all citizens and corporate businesses pay their fair share of tax.
“Government should adhere strictly to the implementation of the National Tax Policy and follow through her commitments in the OGP national Action Plan This is the only way for sustainable revenues to finance development for our people.”
By Adedapo Adesanya
The Senate Committee on Banking, Insurance and Other Financial Institutions has called for stronger collaboration among financial sector regulators and other stakeholders to strengthen Nigeria’s financial system and support sustainable economic growth.
The committee made the call during an expanded stakeholders’ engagement in Lagos, attended by the leadership of the Central Bank of Nigeria (CBN), Nigeria Deposit Insurance Corporation (NDIC), Asset Management Corporation of Nigeria (AMCON), National Insurance Commission (NAICOM) and Nigeria Export-Import Bank (NEXIM), among other industry stakeholders and financial experts.
Chairman of the committee, Mr Adetokunbo Abiru (Lagos East), who was represented by Mr Osita Izunaso (Imo West), said stronger legislative reforms and regulatory collaboration were necessary to reposition Nigeria’s financial architecture for long-term economic prosperity.
Mr Abiru said the financial sector remained critical to investment, job creation, business expansion and macroeconomic stability, stressing that its ability to mobilise savings, channel credit to productive sectors, facilitate investment and manage risks was fundamental to sustainable economic growth.
He said the current economic realities required closer collaboration between the legislature and financial regulators, noting that challenges confronting the sector were interconnected and could not be effectively addressed through isolated interventions.
The lawmaker identified inflationary pressures, global economic uncertainties, cybersecurity threats, low insurance penetration and the need to diversify Nigeria’s export base as some of the challenges requiring coordinated policy responses.
He said the engagement was aimed at generating practical solutions to strengthen the country’s financial architecture and support sustainable economic growth.
According to him, monetary policy, financial safety nets, banking institutions, the insurance industry and export finance were interdependent components of a stable financial system and must therefore be strengthened collectively.
The Commissioner for Insurance and Chief Executive Officer of the National Insurance Commission (NAICOM), Mr Olusegun Ayo Omosehin, said the Nigeria Insurance Industry Reform Act (NIIRA) 2025 had contributed significantly to stabilising and repositioning the insurance sector.
Mr Omosehin disclosed that 43 insurance companies had successfully recapitalised, describing the development as a major milestone for the industry.
He commended Abiru and members of the committee for their role in advancing insurance sector reforms and urged the House of Representatives to expedite action on the relevant insurance reform bill to enable it to receive presidential assent and become operational.
Representatives of the CBN Governor and the Managing Directors of AMCON, NEXIM and NDIC also commended the Senate committee for its oversight and legislative support, saying its interventions had strengthened the agencies’ capacity to discharge their statutory mandates.
The engagement, held under the theme, Strengthening Financial System Architecture for Sustainable Economic Growth and Stability in Nigeria, also featured presentations by Professor Uche Uwaleke, President of Capital Market Academics of Nigeria (CMAN); Professor Biodun Adedipe, Chief Consultant, B. Adedipe Associates Limited; and Dr Tilewa Adebajo, Chief Executive Officer of CFG Advisory.
The experts presented policy recommendations on key issues affecting Nigeria’s financial system, with emphasis on financial stability, investment and sustainable economic growth.
Mr Abiru said the Senate would continue to engage financial regulators and other stakeholders to deepen financial inclusion, strengthen public confidence in financial institutions and improve regulatory effectiveness.
He said the broader objective was to position Nigeria’s financial system to compete more effectively in the global economy while remaining resilient and responsive to the country’s economic transformation agenda.
By Aduragbemi Omiyale
The first six months of 2026 were not too good for Caverton Offshore Support Group Plc, as it suffered an N8.7 billion loss compared with the N2.1 billion net profit it recorded in the same period of 2025.
This occurred as the company posted a 10.91 per cent decline in earnings between January and June 2026, according to its financial statements for the period ended June 30, 2026.
Analysis of the results showed that the revenue generated in the period under review stood at N14.7 billion versus the N16.5 billion printed in the corresponding period of last year.
Business Post observed that the revenue was negatively impacted by a decline in earnings from helicopter charter and helicopter/airplane contract.
Further analysis of the financial results indicated that operating profit went down by 22.34 per cent to N7.3 billion from N9.4 billion, with administrative expenses jumping to N7.9 billion from N4.7 billion.
But Caverton believes things will get better, noting that the clearest driver of the recovery is Caverton Marine.
Through its relationship with Stena Bulk, one of the world’s leading tanker operators, the organisation now participates in three Suezmax tankers trading a rare source of foreign-currency revenue for a Nigerian-listed company.
It noted that the relationship is being deepened through Unity Shipping Worldwide, a joint venture with the Nigerian National Petroleum Company (NNPC) Limited and Stena Bulk that pairs the state-owned oil firm’s national position and Stena Bulk’s fleet with Caverton’s indigenous operating platform
Closer to home, the firm’s OMIBUS platform, developed with Shanghai-based electric-propulsion OEM Explomar, is bringing battery-electric passenger ferries to Lagos waterways. A prototype is already in service, and Caverton holds a firm order from Lagos State for ten vessels, an early-mover position in clean inland-water transport that the group believes can be replicated across other states as the fleet enters service and ferry operations mature into steady, recurring revenue.
In aviation, the institution said the recovery is anchored on its partnership with NHV, a Belgium-based international helicopter operator, with the restructuring of charter operations targeted for the second half of 2026.
“The first half of the year tested us, but the direction of travel is now visible in the numbers.
“Quarter on quarter, we are working to build up our revenue to narrow losses. Our marine business units, from international tankers to electric ferries, are scaling.
“Meanwhile, our aviation relaunch is on track for the second half, and our cost base is tighter than it has been in years. There is distance still to travel, but Caverton is moving from stabilisation to recovery, and we intend to finish 2026 with that momentum intact,” the chief executive of Caverton, Mr Olabode Makanjuola, stated.
By Adedapo Adesanya
The Nigeria Revenue Service (NRS) and the Joint Revenue Board (JRB) have issued new guidelines clarifying the taxation of virtual assets in Nigeria.
The guidelines provide an administrative framework for the taxation of virtual assets and specify the tax obligations of individuals and businesses operating in the sector.
According to a public notice issued by the two agencies, the framework covers registration, reporting and record-keeping requirements, valuation principles and the tax treatment of virtual asset transactions.
It applies to taxpayers, Virtual Asset Service Providers (VASPs), peer-to-peer (P2P) marketplace operators, tax practitioners and other persons engaged in virtual asset-related activities.
The NRS and JRB said the guidelines were developed in line with the provisions of the Nigeria Tax Act 2025 and the Nigeria Tax Administration Act 2025.
The two bodies said the release was aimed at providing clarity, certainty and consistency in the administration of Nigeria’s tax laws as the country’s virtual asset ecosystem continues to evolve.
The agencies added that the framework would promote voluntary compliance, enhance transparency and support the development of a fair and efficient tax system for digital asset transactions.
They urged all affected taxpayers and stakeholders to familiarise themselves with the guidelines and ensure compliance with the applicable tax obligations.
The guidelines are available on the official websites of the two agencies.
