The stakeholders made the call at a webinar on Tuesday in Lagos, organised by the Manufacturers Association of Nigeria (MAN) and KPMG.
The event’s theme was “Catalysing Growth in a Turbulent Economic Environment: The Role of Tax Incentives”.
MAN’s Director-General, Segun Ajayi-Kadir, said that the incentives should be sector-wide and implemented in a transparent and sustainable manner, devoid of sudden disruptions and indiscretions.
Ajayi-Kadir said that the challenges confronting the manufacturing sector in the face of mounting macroeconomic dynamics were accentuated by the prevailing heightened foreign exchange volatility and high electricity tariff. He decried the multiplicity and high rate of taxes and levies by the three tiers of government and their agencies.
According to him, these and other external factors create a challenging business environment for manufacturers in Nigeria.
He, however, said that there was the need to explore all avenues to remain in business, surmount the hurdles and contribute to the much desired growth in our economy.
“One of such avenue that could be better deployed is the utilisation of tax incentives.
“Tax incentives play a crucial role in reducing production cost, driving investment, encouraging innovation, and ultimately fostering economic growth and development.
“Through tax incentives, the government can effectively incentivise businesses to invest in key sectors, create jobs, and drive productivity.
“By reducing the tax burden on businesses, especially in times of economic uncertainty, the government can provide the much-needed support to manufacturers and other economic actors,” he said.
He also urged manufacturers to support the implementation of the outcomes and recommendations of the Presidential Committee on Fiscal Policy and Tax Reforms.
Ms Elizabeth Olaghere, from KPMG, urged manufacturers to take advantage of the various tax incentives and waivers provided by the Federal Government as part of its ease of doing business agenda.
Olaghere, who is the Head, Tax, Regulatory and People Service, KPMG West Africa, urged government to mplement policies that can stimulate the economy, particularly in the manufacturing sector, for Nigeria to achieve economic growth.
She classified tax incentives into profit-based incentives and cost-based incentives, adding that they are vital tools used by governments to attract new investments and expand existing ones.
She urged stakeholders to contribute suggestions to drive the Pioneer Status Initiative (PSI), an income tax relief instrument in Nigeria.
According to her, tax benefits of the PSI include income tax exemption, and exemption from dividends of withholding tax.
“Tax incentives will continue to play a significant role in stimulating economic growth and providing an opportunity for manufacturers to grow exponentially.
“A review of tax incentives and domestic legislation should be accelerated to mitigate the taxing right impact of the global minimum tax.
“Whilst recognising MAN’s mandate of advocating for a conducive business environment, Olaghere said that it was imperative for MAN to encourage its members to take advantage of available incentives.
Deputy Director, Tax Policy Advisory, Federal Inland Revenue Service (FIRS), Matthew Osanekwu, said that government did not only provided several incentives, but was determined to ensure that businesses accessed those incentives.
Osanekwu said that many manufacturers, such as those who produce pharmaceutical products, baby products, veterinary medicine, agriculture and gas, already enjoyed certain waivers and incentives. (NAN)
