The House of Representatives' Ad Hoc Committee on the Review of Tax and Export Incentives, Waivers, and Exemptions has expressed alarm regarding what it calls significant revenue leakages, estimating that Nigeria loses approximately N8 trillion each year due to these concessions and fiscal incentives.
James Faleke (APC, Lagos), the Chairman of the 19-member committee, announced that the committee has embarked on a structured, phased inquiry into the management of tax incentives, export grants, waivers, and exemptions issued by the federal government from 2015 to 2025.
This committee was established after the approval of a motion aimed at investigating the revenue deficits associated with these schemes and suggesting necessary policy and legislative reforms.
“The committee has therefore initiated a systematic evaluation of the administration and impact of tax incentives, export incentives, waivers, exemptions, and other forms of fiscal support extended by the federal government from 2015 to 2025,” noted Mr. Faleke.
The lawmaker, also chair of the House Committee on Finance, indicated that available data shows that Nigeria loses around N8 trillion annually due to such waivers and concessions.
He further mentioned that the federal government anticipates revenue generation from tax incentives to reach N12.4 trillion between 2023 and 2026, while the country’s tax-to-GDP ratio is only 10.6 percent, among the lowest in Africa.
Mr. Faleke characterized the situation as contradictory, particularly in light of Nigeria's fiscal and infrastructure challenges.
“This review is prompted by rising concerns, based on existing official data and budget reports, that substantial public funds may have been lost or mismanaged under various incentive programs, during a time when the nation grapples with pressing fiscal, infrastructure, and developmental issues,” he added.
Although these incentives were intended to draw investments, enhance exports, and bolster key sectors, the House has concluded that it's crucial to evaluate their actual economic effects, assess whether they were implemented transparently and in compliance with due process, and ensure they yield tangible benefits to the economy.
The review will be conducted in phases, with the initial phase concentrating on four critical areas with considerable fiscal implications: the Export Expansion Grant, the RT200bn FX Programme, the Pioneer Status Incentive, and certain fiscal incentives for the oil and gas sector.
He clarified that the review intends neither to witch-hunt nor undermine legitimate businesses but aims to reinforce the management of incentives, protect public finances, and rebuild trust in policies that nurture investment and export-driven growth.
Additionally, the committee acknowledges exporters’ concerns regarding outstanding obligations connected to the Export Expansion Grant and has initiated a fact-based verification process to validate legitimate claims.
To aid its investigation, the panel has requested documentation from relevant Ministries, Departments, and Agencies (MDAs) and may call on beneficiary companies to supply further paperwork and clarifications as necessary.
He assured that all proceedings will be conducted with transparency and adherence to due process, affirming that the review corresponds with the House’s oversight responsibilities and aligns with the federal government’s economic reform initiatives under the President’s Renewed Hope Agenda.
Furthermore, Mr. Faleke promised stakeholders that the committee will provide regular updates on the progress of its activities.
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