By Akanimo Kufre (The New Diplomat’s A/Ibom|C/River Correspondent)
Tax payers in Akwa Ibom State will soon ease a sigh of relief as the state government is set to roll out tax incentives’ plan to woo businesses to the South-South state.
This was announced by the state government as part of measures to cushion the effect of the Covid -19 crisis.
The tax waiver was part of the resolutions reached last Friday at the State Executive Council meeting presided over by Governor Udom Emmanuel in Uyo with modalities to be simplified by the ministry of finance.
According to the Commissioner for Information in Akwa-Ibom, Mr. Charles Udoh, the decision was in line with the World Bank requirements for giving out grants and support to states.
“Major decisions taken today include the approval to commence a process of working out modalities for implementation of tax relief to tax payers in Akwa Ibom State for 2020 tax year. This is in consideration of the adverse effect of Covid-19 pandemic and in line with the requirement of World Bank for grants and supportive to state governments,” Udoh said.
Tax holidays are statutory incentive given to businesses by governments to attract local and foreign investments or to develop a certain area of patronage.
However, a business development finance expert, Mr. Desmond Ushie says beyond grant criteria, tax incentives or subsidy, detailed safety-net measures should be rolled out to help businesses rebound following the Covid-19 impact.
“Tax holidays is temporary elimination of taxes or reductions in businesses especially those on sales. Because of COVID 19 most businesses were not productive as such the tax holiday by the state will boost the capital of business owners and as such help business profitability, expansion and meeting set goals like employment. These should be the objective of the state government ministry,” Ushie said.
The New Diplomat recalls Akwa Ibom State failed to secure 2019 World Bank grant announced in April 2020 due to political scuffle between the state’s executive arm and the leadership of the state’s House of Assembly as the state narrowly missed out partaking in the World Bank assisted N43.416 billion States Fiscal Transparency Accountability and Sustainable Program (SFTAS).
“The unprecedented crisis will require an unprecedented response from the entire Nigerian public sector, in collaboration with the private sector, to contain the outbreak, save lives, and protect livelihoods of the poor and vulnerable,” said Marco Hernandez, World Bank Lead Economist for Nigeria.