Low Tax-To-GDP Ratio Sparks House Investigation Into Waivers

Lawmakers Raise Alarm Over Revenue Losses

THE House of Representatives has disclosed that Nigeria loses an estimated ₦8 trillion annually through tax concessions, waivers, and exemptions, raising fresh concerns about fiscal sustainability at a time of mounting economic pressure.

Chairman of the House Ad Hoc Committee on the Review of Tax and Export Incentives, Waivers and Exemptions, Rep. James Faleke, made the revelation in a statement on Tuesday, describing the situation as both “paradoxical and concerning.”

According to Faleke, official projections show that between 2023 and 2026 alone, the Federal Government expects to forgo approximately ₦12.4 trillion in revenue through tax incentives.

He noted that the development is troubling given Nigeria’s tax-to-GDP ratio of 10.6 percent—one of the lowest in Africa—despite the country’s growing fiscal demands.

A Structured Investigation Begins

The House has constituted an ad hoc committee pursuant to Resolution HR.112/11/2025 of 13 November 2025 to investigate revenue leakages associated with fiscal incentives granted between 2015 and 2025.

Faleke stressed that the probe is not a witch-hunt but part of a broader oversight responsibility aimed at strengthening policy administration and safeguarding public funds.

“The House debated the motion with vigour and serious concern,” he said, adding that lawmakers resolved it was necessary to assess whether incentives were transparently administered and whether they delivered measurable economic impact.

The committee has begun a structured review of tax incentives, export incentives, waivers, exemptions, and other fiscal support instruments.

Focus on Key Incentive Schemes

The first phase of the investigation will concentrate on major incentive programmes, including:

• The Export Expansion Grant (EEG)

• The RT200bn FX Programme

• The Pioneer Status Incentive

• Selected oil and gas fiscal incentives

The committee has requested records from relevant Ministries, Departments, and Agencies (MDAs) and may invite beneficiary companies to provide documentation and clarification.

Faleke assured stakeholders that engagements would be conducted transparently and in accordance with due process.

Reform, Not Retribution

The lawmaker emphasised that the objective of the probe is to improve accountability and restore public confidence in government-backed investment programmes.

Nigeria has increasingly relied on tax incentives to stimulate investment and export-led growth. However, concerns have mounted over whether such incentives deliver proportional economic returns or simply reduce government revenue without commensurate benefits.

Faleke said the new tax regime presents an opportunity to reassess existing fiscal policies and ensure that concessions genuinely contribute to national development.

Aligning With Broader Economic Reforms

The review also aligns with the Federal Government’s broader economic reform agenda, including efforts to build a more resilient and competitive economy.

The House assured the public that periodic updates would be provided as the investigation progresses.

With Nigeria grappling with debt servicing pressures, subsidy reforms, and limited revenue mobilisation, the outcome of the probe could significantly influence future fiscal policy and investment strategy.