Senate Challenges President Muhammadu Buhari On Putting An End To Import Waivers Concluding That N585 Billion Was Lost To The System Last Year
Rather than encouraging Foreign Direct Investments (FDIs) into the country, the tax incentives that are offered to importers in the form of concessions, grants and waivers are now doing more harm than good to the economy, as it has been revealed that the Federal Government gave out sum of N585 billion as waivers between 2011 and 2015.
This was the submission of Senator Ibrahim Gubir, who observed that the huge amount the Federal Government spent on waivers within the four-year period, was enough to establish five quality local industries in each of the states of the federation and the Federal Capital Territory (FCT). “The sum of N585 billion was given out as waivers between 2011 and 2015.
If you share this amount amongst the (36) states of the federation, each would have received the sum of N15 billion (N15,810,810,810.81). When you take it further down to the (109) senatorial districts, each would have received the sum of N5 billion (N5,366,972,477.0642). This amount is more than enough to establish five industries in each state”, he said.
Gubir made the revelation yesterday while making contributions in favour of a motion entitled: indiscriminate use and abuse of waivers for real importation. Following the motion, which was sponsored by Senator Adebayo Rafiu Ibrahim, the Senate urged President Muhammadu Buhari to stop all waivers on the rice importation and other agricultural products.
The Senate also urged the Federal Government to mandate the Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, and the Comptroller General of Customs, Alhaji Abdullahi Dikko, to ensure that all duty due to government is fully recovered. Also, the Senate resolved to set up an ad hoc committee of the Senate to look at all waivers, concessions and grants, and carry out a holistic review to determine the full recovery of all government revenue that are related to this policy.
Ibrahim, who noted that the Federal Government has a policy to encourage agriculture and agriculture business as a deliberate policy to diversify the economy, acknowledged the huge amount of money lost by the Federal Government on duty waivers to importers of rice, palm oil, energy equipment, steel and vegetable oil. He, however, observed that the tax incentives that were offered to encourage Foreign Direct Investments (FDIs) into the country, are now doing more harm than good to the nation’s economy.
“This policy, especially relating to agriculture has become significantly eroded and gradually made nonsense of (the initial objectives) by the indiscriminate abusive grant of waivers, concessions and grants, especially on rice importation.
The flagrant abuse of the waivers scheme has severely eroded the Federal Government’s Rice Production Policy by importing huge quantities of the commodity in excess of their approved quota. “During the past recess and during an interactive session with the CBN, the CBN had revealed to the Senate how these importers have overshot their quota and now owe the Federal Government duties running into billions of Naira.
These importers ordinarily should be paying, in addition to the duty on the commodity, a fine of 70 percent of duties and levies to the Federal Government; the government has failed to implement this directive and denied our people legitimate review into the Federal Government coffers.
“Some of the defaulting companies had, notwithstanding their default, been awarded fresh waivers to import more. The (Nigeria) Customs Service, which ought to be enforcing compliance to duty and other revenue at the boarders, has failed to carryout its mandate and enforce compliance from these defaulters.
“The Federal Government loses (the sum of) N71 billion annually on duty waivers, especially to importers of rice, palm oil, energy equipment, steel and vegetable oil. In 2011, government gave import duty waivers to 10 rice and palm oil importing companies alone, which amounted to N150 billion.
“To lose this vast amount of revenue at a time when Nigeria’s main source of revenue – oil, has plunged to record lows impacting on the fiscal stability of the country is reckless and does not show that we are serious about driving our economic revival. These tax incentives offered to encourage FDIs into the country is now doing more harm than good to the economy, as monies, which could have been invested in public schools, hospitals, roads and other social infrastructure are lost mindlessly without consequences,” Ibrahim said.
While urging his colleagues to give support to the motion, Ibrahim noted that the general yearning of Nigerians is to stamp out corruption from the country. He recalled that the Senate has equally pledged to assist the Federal Government in the fight against corruption. In his submission, Senator Enyinnaya Abaribe, who, however, observed that the motion did not go far enough, noted that removing waivers could help to bring in more money into the country.
“We should equally look at those that are benefitting from the waivers,” he added. Also speaking in favour of the motion, Senator Mao Ohuabunwa pointed out that Nigeria cannot afford to blow hot and cold at the same time. “We can’t be talking about diversification, and yet be killing our economy by ourselves. Waivers kill our agricultural sector.
We need to encourage our local entrepreneurs and manufacturers to grow,” he said. In his submission, Senator Philip Aduda expressed sadness that Nigeria has become a dumping ground for Asian countries like China and India. “Local production is supposed to promote local economy. The issue of waivers is aimed at promoting local content.
But unfortunately, Nigeria has become a dumping ground for rice, especially from countries like China and India. Waivers undermine the economy of the nation,” he added. The UNION reports that the motion received supports from other senators like Dino Melaye, Tayo Alasoadura, Abdullahi Adamu, Chukwuka Utaze, Ali Wakil and Joshua Ligali.
-Teddy Nwanunobi, Abuja