Finance Bill: LCCI warns against tax raise

• Published date: 10 January 2023
• Publication title: Nigeria - The Nation

The Lagos Chamber of Commerce and Industry (LCCI) has called for caution with the Finance Bill.

Its Director-General, Dr Chinyere Almona, argued that with the plan to exit some large enterprises from the pioneer status incentives, the government can save about N6trillion tax expenditure.

She said this lump sum would come from waivers, exemptions and incentives granted by the government according to the Minister of Finance, Budget and National Planning, Mrs Zainab Shamsuna Ahmed in her 2023 Budget presentation.

The LCCI boss advised that leaving rates at their current levels would not lead to a loss of revenue.

She said: 'In recognition of the potential impact of the 2022 Finance Bill on the operations of our members operating in various sectors of the economy, LCCI has reviewed the Bill and is pleased to provide some comments on affected sectors.'

Dr Almona said recent statistics showed that the country has struggled to attract investments into the oil and gas industry. She noted that investments in the Nigerian oil and gas sector have declined significantly in the last seven years with operations overheads of oil and gas companies remaining above 40 per cent above the global benchmark.

The LCCI boss said in line with Federal Government priorities and ongoing initiatives to incentivise gas production, several sections of the PIA clearly show the determined efforts by the government to limit gas-flaring and contain very steep penalties.

Dr Almona said gas flare fees/costs were treated as a penalty and as such a non-tax-deductible item.

She said oil and gas companies in Nigeria have reduced flaring by 70 per cent since 2000 while nearly doubling overall gas production and commercialised volumes in four-folds.

She lamented that the oil sector's contribution to Gross Domestic Product (GDP) through 2022 was just around five per cent but incidentally the sector accounts for over 85 percent of foreign exchange earnings and about 50 per cent of total government revenue.

According to her, this suggests that this sector requires a sensitive regulatory environment to avoid disruptions to investments in the sector.

She said: 'With the divestments by some IOCs from the oil and gas sector, we need to reposition the industry through a steeply implemented Petroleum Industry Act (PIA) to pave way for...