Don't Miss


Home   >   Taxation   >   FG loses N1.85tn to dubious tax refunds

FG loses N1.85tn to dubious tax refunds

By on October 22, 2015

By issuing pioneer status certificates to companies other than those granted by law, the Nigerian Investment Promotion Council (NIPC) has caused the government to refund taxes amounting to about N1.850 trillion.

The House of Representatives at plenary yesterday therefore mandated its committee on finance, when constituted, to probe the issuance of pioneer status to firms in the past six years.

The committee would determine if there have been abuses, and then recommend modalities for recovery of lost revenues, and ensure the prosecution of those found to have willfully caused such financial loss to the country.

Hon. Herman Hembe (Benue APC) sponsoring the motion titled ‘Abuse of Grant of Pioneer Status by Companies,’ cited Section 10 of the Investment Development Act which provides that tax relief period shall be for three years from the first day of production by the company with option for extension for another year or two years.

He alleged that the NIPC has however granted it straight to companies for five straight years contrary to extant laws, and has also granted unwholesome extensions, and even further granted the status to companies that had already benefited from the grant.

“The NIPC had on occasions granted the pioneer status retrospectively, thereby causing the government to even refund taxes already paid by the companies, which have cost the federal government about N1.850 trillion in revenues,” Hembe said.

Section 1 of the Investments Development (Income Tax Relief) Act, confers power to the president to grant pioneer status or tax relief as incentives to companies designated as pioneer industries to encourage investments and stimulate growth in the under-explored sectors that are considered important to the growth of the economy.

 

[ThisDay]