Operators in Nigeria’s oil and manufacturing sector got the highest tax exemption out of the N1.42tn granted to various sectors by the Federal Government in 2022.
This is according to a breakdown of sectoral tax exemption obtained from the Medium Term Expenditure Framework and Fiscal Strategy Paper 2024-2026.
The report says that revenue forfeiture to 21 sectors was part of measures to protect the investment from foreign competition, industrial estates and freedom of transfer of profits and capital among others.
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Tax exemption is the waiver of a national tax, a fee or a charge, and suppliers of goods excused can neither charge output VAT nor claim input VAT; No VAT is chargeable on the supply of exempt goods or services.
According to the new MTEF/FSP, the government forfeited N739.74bn of its revenue under tax expenditure on exempt supplies, while 675.83bn was foregone as tax expenditure on zero rated supplies.
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