Upset industry players have lambasted the Federal Government for its reckless issuance of waivers and levy concessions to a select group of companies, and even churches, describing the action as highly irresponsible and a disservice to the nation.
Some informed industry stakeholders told BusinessDay in confidence that import duty waivers, levy concessions, and petroleum
subsidies were robust tools for funding elections, implying that “beneficiaries of the scam are in league with key government functionaries.”
The Manufacturers Association of Nigeria (MAN), the umbrella body for manufacturers in the Nigeria, observed that contrary to the stipulation of Chapter 72 of the Tariff Book that says “no waivers and concession on import duty and VAT should be given, steel items are being imported in enormous tonnage, most times in excess of what is needed to execute claimed projects.”
MAN, in a letter dated January 10, 2013, written to Ngozi Okonjo-Iweala, minister of finance and co-ordinating minister of the economy, (Attention: Director general, Budget Office), noted: “CME, we are surprised also to discover that the material/product list attached to the concessions newly granted to three other companies (Messrs WEMCO, Rite Aid Wire Industries Limited and Quits Aviation Services Limited) contain items that are not plant and machinery and are also being produced locally.
“We also request the ministry to amend all previous waivers given to companies that included other items apart from plants and machinery (such as steel, cables, etc.) in order to save local manufacturing from collapse.”
The Lagos Chamber is concerned about the wanton abuse of Import Duty waivers. The Chamber, according Muda Yusuf, its director general, this condition has a number of very serious implications for the economy. He argued, “First, it creates distortions in the investment space as a result of the uneven playing field it creates among private sector players. This could be a major disincentive to entrepreneurship and enterprise development.
“Secondly, it is a system that is prone to corruption. Access to waivers is often dependent on critical contacts in the realm of politics or bureaucracy, and this is a process that is considerably prone to corruption. It is not a system that recognises merit. Thirdly, it leads to profound loss of revenue as had been variously reported by the Nigerian Customs Service.”
For the Chamber, “It is astounding that in spite of the various assurances by the government that granting of waivers has been stopped, the practice apparently had continued. This is regrettable and not healthy for the economy.
“The principle of waivers would make sense where strategic government projects are involved, with significant national interests at stake. It is not supposed to serve narrow interests of profitability. Where it becomes inevitable to grant such waivers, it should be of universal application to all players in the sector.”
Shuaibu Idris, former deputy managing director, Dangote Flour Mills plc, entrepreneur and industry analyst, argued: “In general, the concept of duty waivers, concession and tax holiday is good and an excellent idea which has been used by many countries to help industrialise nations. However, successive governments in Nigeria tend to use these waivers, concessions and tax holidays in a way and manner that is highly questionable and in fact a disservice to the nation.
“Scrupulous and frivolous persons apply for this assistance under questionable guise and are processed and granted waivers on duty, only for them to turn back and sell the commodities without any regards to the waivers and a few people feed fat on the system. This economic rent seeking, while many present day businessmen and women alike did enjoy it to rise to stardom, recent persons enjoying these peerages have little or no bases for even applying for the assistance.”
BY OUR REPORTER
