The Federal Government’s introduction of import Duty Exemption Certificate (IDEC) through the Ministry of Finance to boost the economy with the exempton of critical players from payment of import duties and other statutory Customs charges may have cost the country a whopping N16 trillion in fruadulent manipulation of the system.
Th was as local manufacturing companies and other institutions have beeen encouraged to advantage of the waiver incentives and exemptions on import policy.
The waiver and exemptions are actually granted for different strategic reasons, including strengthening primary industries that are just coming up to sustain themselves, create employment and contribute to the economy.
However, some companies, individuals and other entities abused the system and shortchange the Federal Government of revenue by hiding under the waiver policy to evade duty on imported goods that are dutiable.
With massive corruption now dogging the policy, a group known as Association of Concerned Citizens of Nigeria on Revenue and Economy (ACCNRE), raised the alarm that Nigeria lost about N16 trillion to fraudulent practices under the policy on imports and related incentives that are more of a scam than the intended economic benefits for the country.
Philip Orji, the founder of the association and chief promoter of a bill seeking establishment of office of the National Inspector General for Tax Crimes Commission (NIGTCC), presently before the National Assembly, said while the waivers were not bad, lack of close monitoring has led to all manner of abuses, where supposed manufacturers offered waivers hide under its cover, by constructing fictitious factories and importing products over many years, thereby short-changing the country of revenue.
While appealing to the National Assembly to pass the bill, which has already scaled second reading in both chambers, appreciated spokesman of the House of Representatives, Benjamin Kalu, and Senate chief whip, Uzor Kalu who separately sponsored the proposed legislation in the two chambers.
He cited countries like the United Kingdom and the United States among others, where similar office exists alongside the internal revenue service agencies, for oversight purposes, said the NIGTCC would “protect the FIRS employee improprieties and external attempts to corrupt or threaten FIRS employees.
He said it was the duty of the legislators to fast-track the passage of the NIGTCC bill into law as the watchdog in the nation’s tax administration, to save the lives of the country’s unborn generations.
“Tax is a complex subject to discuss; the poor don’t want to hear about tax neither do the rich have time to listen to issues that concern tax. No one loves to pay tax, neither does the government want to impose it on its citizens, but no nation can exist without tax.
“In that respect, there’s a need for the government to take the responsibility of fashioning a fair, efficient and transparent taxation system that guarantees the security and the protection of the taxpayer’s right,” he added.
Data from the nation’s Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) 2023-2025 show that Nigerian government granted waivers, incentives and exemptions worth N2.296 trillion in 2021 to different institutions through the Nigeria Customs Service (NCS) while Customs total revenue collection in 2021 was only N1.34 trillion, according to the document. This implies that the total waivers granted by the Nigerian government surpassed its total revenue by 71.3 per cent.
Daily Sun learnt that the beneficiaries in 2021 were the diplomatic community in Nigeria, armed forces, airlines and some unique healthcare service providers.
Ironically, the Senate Committee on Finance had also vehemently rejected the N6 trillion tax and import duty waivers proposed by the Nigerian government in the 2023 budget, while declaring that wastages and leakages in the nation’s public finance space must be blocked.
Against this backdrop, the Minister of Finance, Zainab Ahmed, was directed to cut down the tax waivers by half to N3 trillion, to offset the N12.43 trillion deficit of the N19.76 trillion proposed as expenditure for the 2023 budget.
Speaking with Daily Sun, an analyst on export and import duty, Mr Segun Adesina, said that the abuse of waivers and incentives granted to companies, government agencies, individuals and diplomatic community started way back in 2013-2014 under the Goodluck Jonathan regime.
He said the practice of tax waivering was only for the benefits of the few rich people at the expense of the socio-economic growth of the country.
He said the reason why corruption was allowed to creep into the system was simply lack of monitoring, stressing that government has good intentions by giving waivers to some companies and others whom it felt deserved it but with corruption and greed, such good intentions of the government was turned to abuse by unpatriotic elements.
He said to curb the abuse of waivers to the barest minimum, there is for Federal Government and National Assembly must team up to criminalised the abuse.
President, National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), Lucky Amiwero, said waiver is to assist the companies that are just coming up especially the ones that don’t have stable electricity, good road networks, water and all the rest, adding that waivers at sometimes are given to companies to stand on their feet.
“The problem of that waivers is being abused. So many of the waivers granted by the Federal Government might not be for companies, they give it to political patronage and all the rest. Those are the problems associating with the policy.
“Waiver is something that is done all over the world and it is done on the basis of having the real thing to do. For instance, like things that will assist the company to grow, especially the primary industries that are just coming up.
“Sometimes, the waiver is giving to these companies to sustain them due to competition outside so that they will be able to get things done probably and remain in business,” he explained.
Speaking on how to curb the abuse associated with waivers, he said to stop the abuse it to be able to give the people that deserve it and stop the ones that do not deserve it because there are many companies that do not deserve it.
He said companies that are given waivers are primary industry and companies that are subject to competition in abroad so that those companies will be able to sustain themselves.
The President of Africa Association of Professional Freight Forwarders and Logistics of Nigeria (APFFLON), Otunba Frank Ogunojemite, said if the people given waivers are abusing it that is a compromise on the side of the government agencies like Customs, Standard Organisation of Nigeria (SON), the National Agency for Food and Drug Administration and Control (NAFDAC) and the rest.
“Looking at it very well, Customs has the responsibility to do examination to determine the duty on imported goods whether you are giving a waiver or not. That is the responsibility of the Customs.
“There is nothing wrong if government is giving waivers. What is wrong is abusing the waivers. I think people cannot abuse the waivers if Customs who is to protect the country is up and doing. Government would not have lost any money of the people have done their jobs diligently.”