Economy

Long-Term Tax Incentives to Firms for Projects Dangerous—CISLAC

Published

9 years ago

13/10/2017

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.”

Economy

MRS Oil, FrieslandCampina Wamco Shrink NASD Index by 0.68%

Published

2 days ago

06/06/2026

Adedapo Adesanya

By Adedapo Adesanya

The duo of MRS Oil and FrieslandCampina Wamco Nigeria Plc weakened the NASD Over-the-Counter (OTC) Securities Exchange by 0.68 per cent on Friday, June 5.

MRS Plc lost N19.00 during the session to sell at N171.00 per share compared with Thursday’s value of N190.00 per share, and FrieslandCampina Wamco Nigeria Plc depreciated by N8.70 to finish at N181.68 per unit compared with the preceding session’s N190.38 per unit.

As a result, the market capitalisation further lost N22.59 billion to close at N2.607 trillion versus the N2.630 trillion it ended a day earlier, and the NASD Unlisted Security Index (NSI) dropped 37.76 points to settle at 4,358.32 points, in contrast to the previous day’s 4,396.08 points.

The alternative stock market closed the last trading day of this week with a price gainer, Central Securities Clearing System (CSCS) Plc, which gained 6 Kobo to quote at N78.40 per share compared with the preceding session’s N78.34 per share. However, it could not prevent the market from going down at the close of business.

Yesterday, the volume of securities bought and sold by investors went down by 50.0 per cent to 140,345 units from the preceding day’s 280,714 units, the value of stocks decreased by 16.5 per cent to N17.9 million from the previous session’s N21.5 million, and the number of deals carried out by market participants fell by 35.7 per cent to 27 deals from the 42 deals recorded on Thursday.

When trading activities closed for the day, Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis, with 3.4 billion units exchanged for N8.4 billion, trailed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units sold for N6.5 billion, and CSCS Plc with 64.7 million units traded for N4.4 billion.

GNI Plc also ended the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infracredit Plc with 2.3 billion units transacted for N6.5 billion, and Resourcery Plc with 1.1 billion units valued at N415.7 million.

Economy

NGX Index Rebounds 0.15% on Renewed Interest in Financial Stocks

Published

2 days ago

06/06/2026

Dipo Olowookere

By Dipo Olowookere

Renewed interest in financial stocks and others lifted the Nigerian Exchange (NGX) Limited by 0.15 per cent on Friday.

Customs Street closed higher yesterday despite the 1.37 per cent loss recorded by the consumer goods sector as a result of profit-taking.

This was offset by gains in the other key sectors of the local bourse, as the insurance counter chalked up 1,14 per cent. The banking space appreciated by 0.90 per cent, the industrial goods segment grew by 0.46 per cent, and the energy sector expanded by 0.01 per cent.

Consequently, the All-Share Index (ASI) went up by 366.00 points to 242,593.31 points from 242,227.31 points, and the market capitalisation gained N235 billion to close at N155.594 trillion compared with the previous day’s N155.359 trillion.

The trio of International Energy Insurance, Abbey Mortgage Bank, and DAAR Communications improved by 10.00 per cent each yesterday to N7.26, N9.35, and N1.98, respectively, while Zichis advanced by 9.39 per cent to N32.38, with Sovereign Trust Insurance up by 8.70 per cent to N2.50.

On the flip side, Academy Press lost 9.84 per cent to quote at N8.25, University Press depreciated by 9.73 per cent to N5.10, Africa Prudential dipped by 2.63 per cent to N12.95, Chams crumbled by 2.44 per cent to N4.00, and International Breweries slipped by 1.59 per cent to N12.35.

Business Post reports that the market breadth index was positive during the session after recording 37 appreciating equities and 14 depreciating equities, implying strong investor sentiment.

Abbey Mortgage Bank led the activity chart with a turnover of 164.1 million units worth N1.5 billion, Ellah Lakes sold 76.7 million units for N767.2 million, Access Holdings transacted 44.8 million units valued at N1.1 billion, Linkage Assurance exchanged 23.0 million units worth N41.2 million, and The Initiates traded 20.2 million units for N562.1 million.

At the close of trades, market participants transacted 608.5 million units worth N32.0 billion in 53,826 deals versus the 588.5 million units valued at N27.9 billion executed in 57,352 deals in the previous session. This showed that the number of deals eased by 6.15 per cent, the volume of transactions rose by 3.40 per cent, and the value of transactions soared by 14.70 per cent.

Economy

Naira Depreciates to N1,362/$1 at Official Market

Published

2 days ago

06/06/2026

Adedapo Adesanya

By Adedapo Adesanya

The Naira further depreciated against the United States Dollar by N3.46 or 0.25 per cent to N1,362.21/$1 from N1,358.75/$1 in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, June 5.

However, it appreciated against the Pound Sterling in the same market window during the session by N4.47 to trade at N1,823.59/£1 compared with the previous day’s N1,828.06/£1, and gained N7.00 against the Euro to sell at N1,574.58/€1, in contrast to Thursday’s closing price of N1,581.58/€1.

For another trading session, the Nigerian Naira maintained stability against the Dollar in the parallel market and the GTBank forex counter on Friday at N1,375/$1 and N1,372/$1, respectively.

The Naira is expected to remain strong in the near term, backed by a rise in external reserves, which are nearing $50 billion, enhancing analysts’ confidence about its outlook in the second half of 2026.

Heightened global uncertainty has reduced the incentive for importers and corporates to demand FX, as cautious trade weighs on import needs. Analysts estimate a $40 billion net FX position for the year, a projection anchored in oil windfall gains.

As for the cryptocurrency market, prices remained depressed following a strong US jobs report that spurred markets to price in higher-for-longer interest rates, sending Treasury yields and the dollar up while hammering stocks, especially AI-related names. Crypto markets saw heavy leverage washouts with about $1.6 billion in positions liquidated over 24 hours.

Ethereum (ETH) gave up 4.9 per cent to trade at $1,584.68, Solana (SOL) fell by 3.3 per cent to $63.22, Bitcoin (BTC) crashed by 1.9 per cent to $61,333.23, Dogecoin (DOGE) slipped by 1.8 per cent to $0.0821, and Ripple (XRP) moderated by 1.8 per cent to $1.09.

Further, TRON (TRX) dropped 1.6 per cent to sell at $0.3197, Binance Coin (BNB) slumped by 1.0 per cent to $581.18, and Cardano (ADA) declined by 0.4 per cent to $0.1589, while the US Dollar Tether (USDT) gained 0.07 to sell at $0.9997, and US Dollar Coin (USDC) closed flat at $0.9998.