By Omodel Adigun
the The Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, has objected to the granting of a tax credit or tax holiday to a company for the construction or rehabilitation of roads in the country, saying it mortgages future government revenue streams.
According to Emefiele, who during his recent visit to the Lagos Free Trade Zone (LFZ) warned companies operating there to avoid tax evasion, said: “We will engage with the government of the State and the Federal Government through the Federal Ministry of Works and Housing as what can be done to evacuate goods along this corridor (LFZ-Lekki-Epe-Ijebu Ode Road)? “.
Emfiele added that the evacuation of cargo from LFZ port is an infrastructure issue, stating that Infrastructure Company Limited (InfraCo), chaired by CBN, is currently in the process of raising around N15 billion to finance road infrastructure.
Explaining why he will not support granting a tax holiday or tax credit to a company to carry out the reconstruction or rehabilitation of the road, he said:
“As a person, I don’t like the idea of a road tax credit. Once the government gets into it, what it does is like mortgaging future government revenue in taxes W will like to think of other brilliant financing options that can make this infrastructure possible while not depriving the government of potential and future tax revenue to run government operations.
He, however, expressed concern over the operations of the free trade zone with regard to tax exemption and duty exemptions, saying there is a need to create a clear demarcation between companies that operate and those that do not. do not operate in the LFZ.
“You operate like a free trade zone. We have concerns about how a free trade zone works: tax exemptions or customs exemptions. We sincerely want to work and create a clear demarcation. You will discover that a company a company may want to operate as a free trade zone and at the same time operate in the other direction, so we really need to delineate how this will work so that it does not result in loss of revenue for the Nigerian government. Generally, businesses like to avoid or evade taxes. The government does not want you to avoid or evade taxes in order to generate revenue to run government operations.