The House of Representatives has commenced a formal investigation into the widespread abuse of tax incentives, waivers, and exemptions that have reportedly drained the Federal Government of over N8 trillion in revenue annually.
The resolution followed the adoption of a motion of urgent public importance sponsored by Hon. Oluwole Oke, representing Oriade/Obokun Federal Constituency of Osun State, during plenary on Thursday.
The move signals renewed legislative urgency to address one of the country’s most critical fiscal leakages.
Hon. Oke explained that while tax incentives are legitimate tools used globally to stimulate investment and promote sector-specific growth, the Nigerian experience has been marred by systemic exploitation and mismanagement.
According to him, the continued abuse of these instruments has created a “black hole” in government revenue streams.
Citing fiscal data, Oke stated that an estimated N6 trillion is lost annually to corporations that manipulate the tax incentive framework, while an additional N2 trillion results from administrative loopholes and misapplied exemptions.
The affected tax instruments include capital allowances, pioneer status incentives, investment allowances, VAT exemptions, and benefits tied to free trade zones.
“These fiscal tools were introduced to attract investment, encourage innovation, and drive industrial growth,” Oke said. “However, in the absence of strict oversight and accountability, they have now become avenues for revenue loss and regulatory arbitrage.”
He warned that the continued misuse of these incentives not only weakens Nigeria’s tax base but also contributes to the country’s alarmingly low tax-to-GDP ratio of 10.6%, one of the lowest in sub-Saharan Africa.
Oke further cautioned that failure to urgently address these issues could plunge Nigeria into a severe fiscal crisis.
Drawing a comparison to Venezuela, he noted that even resource-rich nations are not immune to economic collapse when public finances are mismanaged.
Following deliberations, the House mandated its Committees on Finance, Commerce, and Industry to conduct a comprehensive investigation into the administration of tax waivers and exemptions, and to identify companies benefiting unjustly from the regime.
The committees are expected to submit a detailed report within four weeks, including recommendations for policy reform, recovery of lost revenues, and tighter regulatory frameworks to prevent future abuse.
The legislative action comes at a time when the Federal Government is under growing pressure to boost non-oil revenue and reduce fiscal deficits.
With mounting debt obligations and limited foreign inflows, experts believe plugging leakages in tax administration is critical to achieving long-term economic stability.
Industry stakeholders and tax professionals are expected to engage with the committees during the investigation phase to ensure transparency and alignment with international best practices.
The probe is part of broader efforts by the National Assembly to support fiscal sustainability, enhance accountability, and rebuild public trust in Nigeria’s tax and incentive systems.
