Road Deficit: Saraki seeks private sector interventions through Tax Incentives
Senate president, Bukola Saraki on Monday disclosed that Nigeria cannot find the money required to fund its road deficit infrastructure in the next 10 to 20 years.
Saraki stated this when he officially declared opened a public hearing on two separate but closely related bills namely; company income tax act 2004(amendment) bill, and tax incentives management transparency bill, (2017).
Considering the huge financial burden on government, Saraki called for an arrangement that would encourage intervention from the private sector who in return would enjoy tax incentives in form of tax holiday.
The company income tax act which is currently being amended provides that “a new company going into business where infrastructures such as electricity, water or tarred road are not provided by the government shall be exempted from tax for the first ten years of its operation”.
Saraki believes such offers of tax incentives to private companies could be used in servicing Nigeria’s huge road deficit.
Executive chairman, federal Inland Revenue service (FIRS), Babatunde Fowler in his presentation cautioned strongly against the proposed tax incentive to grant 10-years tax holiday to companies doing business in Nigeria’s rural communities.
He said such tax incentive is too much a burden on Nigeria’s tax revenue base; warning sternly against arrangements that seek to transfer responsibility of providing infrastructures like roads to private companies.
The chief tax officer also kicked against virtually all the proposed amendments to the companies income tax act insisting that they would adversely affect tax revenue.
The institute of chartered accountants (ICAN) is however opposed to the position of firs particularly as it concerns the issue of tax incentives.
While the institute welcomes the tax incentives which it said would encourage investments; it seeks an amendment that would extend the offer not only to new companies but also to companies already doing business in the country.
The one-day public hearing also opened debate on constituency projects (budgetary provision) bill, (2016).
The bill seeks to create a legal framework for the release of allocations to finance constituency projects which lawmakers argued would aid equitable distribution of development.
The idea of constituency projects and how they are implemented has been a matter of controversy in Nigeria for many years with allegations that the entire concept is to give lawmakers unfettered access to corner money for themselves.
Saraki ruled this out, hoping that the bill when eventually passed into law will clear all of the controversies.
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