Economy

FG Grants Dangote, Honeywell, Others Tax Reliefs and Concessions Worth N16tn – Report

Published

4 years ago

September 19, 2022

Eric

The Federal Government has foregone N16.76tn in revenue to tax reliefs and concessions given to large companies between 2019 and 2021, according to findings by The PUNCH.

As of the end of 2021, 46 companies had benefitted from various tax incentives and duty waiver schemes while the requests of 186 companies were still pending.

These were contained in the tax expenditure statement (TES) reports in the Medium-Term Expenditure and Fiscal Strategy documents posted on the website of the Budget Office of the Federation.

The TES deals with revenue forgone on Company Income Tax, Value Added Tax, Petroleum Production Tax, and Customs Duty.

In the TES report for 2019, it was stated that the Federal Government had forgone revenue of N4.2tn from two main sources, CIT and VAT.

For CIT, the estimated amount of revenue forgone was N1.1tn while N3.1tn was for VAT.

The TES report read, “The most significant conclusion is the large size of Nigeria’s revenue forgone from just two of the main taxes, i.e., CIT and VAT. Nigeria’s non-oil revenue potential is at least twice its current collections.

“The preliminary estimate of revenue forgone from CIT incentives and concessions in 2019 is N1.1tn; for contrast, 2019 CIT collections was N1.6tn. The preliminary estimate of revenue forgone from VAT policy choices and compliance gaps is estimated to be NGN 3.1tn and could possibly be more. It is worth reiterating that revenue forgone from Customs Duty, Excises, Petroleum Production Tax, Personal Income Tax and concessions under the Oil and Gas Zones legislation is still to be computed.”

According to the TES report, the figure for revenue foregone would likely exceed N4.2tn if there were sufficient data, especially from Customs Duty, Excises, PPT, Personal Income Tax and concessions under the Oil and Gas Zones legislation.

By 2020, the figure rose to N5.8tn, with majority of it coming from revenue forgone under VAT. A breakdown showed that N4.3tn was forgone under VAT; N457bn under CIT; N307bn under PPT, and N780bn under customs duty.

It was also noted that five countries accounted for about 86 per cent of total customs relief, with China accounting for nearly two-thirds of total relief granted. Netherlands, Togo, Benin and India were the other top sources of supplies benefitting from the reliefs.

The total figure continued to rise in 2021, hitting N6.79tn, with revenue foregone on VAT accounting for most of it. A breakdown showed that N3.87tn was forgone under VAT, N548.40bn under CIT; N337.70bn under PPT; N1.84tn under customs duty; and N111.15bn under imports VAT.

For the three-year period, therefore, the Federal Government had to forgo a total of N16.79tn in tax reliefs, Customs duty waivers and concessions, according to an analysis by The PUNCH.

Under this figure, tax exemptions covered imported goods covered by diplomatic privileges, military hardware, fuels and lubricants, hospital and surgical equipment, aircraft (their parts and ancillary equipment), plant and machinery imported for use by companies in export processing zones, health and medical supplies to abate the spread of COVID.

Other exemptions included: reliefs on the presidential initiative on COVID-19 supplies, Import Duty and VAT on commercial airlines.

It was also noted that five countries accounted for about 92 per cent of total Customs relief with China accounting for nearly half of the total relief granted. Singapore, Netherlands, Togo, Benin Republic and India were the other top sources of supplies benefitting from the reliefs.

Meanwhile, the beneficiaries of the tax reliefs and concessions included Dangote, Lafarge, Honeywell and 43 other major beneficiaries.

As of the end of 2021, 46 companies had benefitted from the tax incentive scheme while the requests of 186 companies were still pending.

They were beneficiaries of the pioneer status tax relief under the Industrial Development Income Tax Act with tax reliefs for a three-year period.

This was contained in the Q4 2021 PSI report released by the Nigeria Investment Promotion Commission.

The pioneer status is an incentive offered by the Federal Government, which exempts companies from paying income tax for a certain period. This tax exemption can be full or partial.

The incentive is generally regarded as an industrial measure aimed at stimulating investments in the economy.

The products or companies eligible for this pioneer status are those that do not already exist in the country.

These companies included: Dangote Sinotrucks West Africa Limited, Lafarge Africa Plc, Honeywell Flour Mills Nigeria Plc, Jigawa Rice Limited, and Stallion Motors Limited.

Others included: African Foundries Limited, Royal Pacific Group Limited, Kunoch Hotels Limited, Princess Medi Clinics Nigeria Limited, Medlog Logistics Limited, and Masters Liquefied Gas Limited.

The Punch

Economy

World Bank Okays $1.25bn Loan for Nigeria, Unveils 6-Year Growth Strategy

Published

3 weeks ago

July 1, 2026

Eric

The World Bank has approved a $1.25 billion Development Policy Financing (DPF) loan for Nigeria as part of a new six-year partnership framework to accelerate private sector-led growth, create jobs, and support key economic reforms.

The approval, announced on Wednesday, falls under the Nigeria Actions for Investment and Jobs Acceleration (NAIJA) programme and is part of the World Bank’s Country Partnership Framework (CPF) for Nigeria, covering 2026 to 2032.

According to the bank, the financing will support reforms to improve competitiveness, deepen capital markets, modernise regulations for the digital economy, strengthen power sector reforms, expand agricultural productivity and enhance domestic revenue mobilisation. The programme also seeks to reduce trade barriers in line with Nigeria’s commitments under ECOWAS and the African Continental Free Trade Area.

The approval follows public debate over Nigeria’s rising debt profile, with some Nigerians questioning the country’s continued reliance on external borrowing and calling for greater transparency in the use of previous World Bank loans.

Beyond the financing, the World Bank said the new partnership framework aims to expand electricity access to 32 million Nigerians, provide broadband connectivity to 58 million people, improve health and nutrition services for 40 million citizens and support 9.5 million farmers through higher agricultural productivity.

World Bank Country Director for Nigeria, Mathew Verghis, said recent macroeconomic reforms had helped stabilise the economy but stressed that sustained improvements in living standards would depend on addressing structural constraints to private investment and job creation.

The World Bank Group added that its private sector arms, the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA), will support the strategy by mobilising private capital, expanding infrastructure investment and providing guarantees to reduce investment risks.

The new framework reflects the World Bank’s continued focus on supporting Nigeria’s economic reforms while encouraging greater private sector participation to drive long-term growth and reduce poverty.

Economy

Dangote Refinery Files Lawsuit Against FG, NNPC, Marketers over Petrol Import Licences

Published

2 months ago

May 18, 2026

Eric

Dangote Petroleum Refinery has filed a fresh lawsuit against the Nigerian National Petroleum Company Limited (NNPC) and several fuel marketers, seeking to overturn fuel import licences issued by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

According to court documents filed at the Federal High Court in Lagos and cited by Reuters, the refinery is asking the court to nullify import permits recently granted or renewed by the regulator, arguing that the approvals violate an earlier directive ordering all parties to maintain the status quo pending the determination of the case.

The legal action comes at a time when Nigeria is recording a sharp decline in petrol imports due to rising domestic refining capacity, largely driven by output from the Dangote Refinery.

In its filing, Dangote Refinery argued that Nigerian law permits fuel importation only when local production is unable to meet national demand. The company maintained that continued issuance of import licences undermines its operations as it ramps up production from its multi-billion-dollar refinery located on the outskirts of Lagos.

Fuel marketers, however, have consistently defended importation, insisting that imports remain necessary to guarantee a stable supply and prevent shortages across the country.

This is not the first dispute between Dangote Refinery and fuel importers. In 2025, the company filed a similar suit against NNPC Ltd and several marketers, including AYM Shafa Ltd, A.A. Rano Ltd, T. Time Petroleum Ltd, 2015 Petroleum Ltd and Matrix Petroleum Services Ltd, while also seeking ₦100 billion in damages. The suit was later withdrawn without explanation.

Recent industry data showed petrol imports dropped to 965.52 million litres in Q1 2026 from 2.43 billion litres in the same period of 2025. Meanwhile, supply from local refineries rose to 3.18 billion litres, accounting for about 76.7 percent of Nigeria’s petrol supply during the quarter.

Economy

World Bank Flags ‘Hidden Spending System’ Diverting N34.53trn of Nigeria’s Revenue

Published

3 months ago

April 19, 2026

Eric

The World Bank has raised concerns over Nigeria’s fiscal framework, revealing that more than N34.53 trillion was diverted from federation revenue over the past three years through pre-distribution deductions.

In its latest Nigeria Development Update obtained from its website, the global lender disclosed that although total federation revenue rose sharply to about N84 trillion between 2023 and 2025, about 41 per cent of the earnings did not reach the Federation Account for distribution to the federal, state and local governments.

According to the report, gross revenue increased from N17.08 trillion in 2023 to an estimated N37.44 trillion in 2025. However, deductions classified as “first-line charges” also rose significantly, from N6.22 trillion to nearly N15 trillion within the same period, reducing the pool of funds available for distribution.

The World Bank noted that the development has created a paradox in which rising revenues have not translated into improved public spending capacity, as a substantial portion is automatically retained by certain agencies before allocation.

It explained that reforms such as the removal of petrol subsidy and foreign exchange adjustments boosted nominal revenues, but much of the gains were offset by the structure of deductions tied to cost of collection and statutory transfers.

Agencies such as the Nigeria Customs Service, Nigerian National Petroleum Company Limited, and the Federal Inland Revenue Service account for a significant portion of these deductions. The report stated that their funding is based on fixed percentages of gross revenue, leading to higher allocations as revenues increase.

Describing the model as “pro-cyclical”, the Bretton Woods institution said it operates outside the conventional budgetary framework and weakens legislative oversight. In some cases, allocations to individual agencies exceed the revenues of several states and even the budgets of key federal ministries.

The report also highlighted the impact on public finances, noting a decline in capital expenditure from N5.5 trillion in 2024 to N4.5 trillion in 2025, with only about 25 per cent of the approved capital budget implemented. Meanwhile, the federal fiscal deficit remained elevated at N16.9 trillion, driven by debt servicing and recurrent expenditure.

The World Bank warned that the current arrangement undermines fiscal transparency and accountability, as significant portions of public revenue are spent outside the standard appropriation process.

Source: tribuneonline