Amid the overwhelming revenue challenges, the Federal Government granted tax relief to a tune of N16 trillion between 2019 and 2021.
Investors King learnt that at the end of 2022, up to 46 companies had benefitted from various tax incentives and duty waiver schemes while the requests of 186 companies were still pending.
Information about the tax relief was contained in the Tax Expenditure Statement (TES) released by the Budget Office of the Federation.
Most of these tax incentives were administered via Company Income Tax (CIT), Value Added Tax (VAT), Petroleum Production Tax (PPT) and Customs Duty.
It could be noted that five countries accounted for about 86 percent of the custom relief.
It is not surprising that China accounted for nearly two third of the total relief that was granted. Both Nigeria and China have good trade relations. Investors King earlier reported that trade volume between both countries has increased by 157 percent to N1.49 trillion in the first half (H1) of 2022.
In 2019, the Federal Government waived N4.2 trillion in Company Income Tax and Value Added Tax. While N3.1 trillion was granted as tax relief on VAT in 2019, N1.1 trillion was granted on CIT.
By 2020, the figure rose to N5.8tn, with the majority of it coming from revenue forgone under VAT. A breakdown showed that N4.3tn was forgone under VAT; N457bn under CIT; N307bn under PPT, and N780bn under customs duty.
The figure rose to N6.7 trillion in 2021 with VAT accounting for most of the relief. By and large, a culmination of the tax relief granted between 2019 to 2021 was N16.79 trillion.
Meanwhile, the Federal Government has also proposed a tax exemption to the ton of N6.0 trillion in the 2023 budget despite about N12.43 trillion deficit.
