Abuja – ECOWAS countries lose about 9.6 billion dollars yearly from indiscriminate granting of tax incentives, a report as shown.
The Nigeria Tax Justice and Governance Platform, an NGO, made the remark when its leadership visited the ECOWAS Director of Customs Office in Abuja on Wednesday.
Mr Tunde Aremu, the Head, Policy Advocacy and Campaign Manager, Actionaid Nigeria, speaking for the group, said the corporate tax incentives given by African states were mostly harmful to their economies.
Aremu urged ECOWAS to abolish “unproductive corporate tax incentives in the interest of its member countries.’’
From the report, Aremu said that ECOWAS countries lose about 9.6 billion dollars yearly from indiscriminate granting of incentives.
He said the report showed that Nigeria loses about 2.9 billion dollars, Ghana, 2.27 billion dollars and Senegal 638.7 million dollars a year.
He listed the incentives as reduced tax rates on profit, tax holidays and waivers which he said were reasons most ECOWAS countries were still struggling to develop infrastructure and reduce poverty.
He said the granting of incentives also bred high existence of bribery and corruption by corporate bodies to government officials in the region.
“The research finds that 46 per cent of firms in Ghana, Nigeria and Côte d’Ivoire receive tax holidays and 10 per cent of these companies do not pay correct corporate income tax.
“A sizable proportion of firms receive export tax support or subsidies to encourage export-led growth, 15 per cent of firms indicated receive discretionary incentives by tax officials.
“These off-the-book incentives are particularly harmful as they are misleading and non-transparent’’, he said.
He urged ECOWAS to start the process that would eliminate corporate income tax holidays, adding that it should review all corporate incentives to ensure they were commensurate with expected benefits.
“A regional framework for corporate tax incentives in ECOWAS should be agreed on and implemented.
“ECOWAS states should develop better mechanisms to provide oversight to corporate tax incentives offered in the region and promote tax harmonisation where these are appropriate’’, he said.
Meanwhile, the Director of Customs, ECOWAS, Mr Salifou Tiemtore, said ECOWAS would be happy to partner with the civil society organisations as technical partners to find lasting solutions to the challenges.
“I believe that the economies and revenue of ECOWAS countries will improve if these harmful incentives are stopped.
“I can see that if we follow the recommendations of this report, revenue generation of member states will increase’’, he said.
According to Tiemtore, the commission is working to stop double taxation among member states to encourage trade in the region.
The group presented the commission with the report by Actionaid and Tax Justice Network titled “The West African Tax Giveaway: Use and Abuse of Corporate Tax Incentives in ECOWAS.” (NAN)
