Minister of State for Labour and Employment, Prof. Stephen Ocheni has disclosed that the Federal Government has developed a special package of incentives aimed at accelerating the growth and development of the various sectors of the Nigerian economy, reduce poverty and promote economic recovery and growth of the nation.
Ocheni said this Speaking at an Excellence Award by the Chartered Institute of Taxation of Nigeria.
He said the special incentives was designed by the government to restore Nigeria’s economy to the part of sustainable growth.
“The Federal Government has developed a package of incentives for various sectors of the economy which will help to accelerate growth and development, reduce poverty and promote the government economic recovery and growth plan which is designed to restore Nigeria’s economy to the part of sustainable growth.” Ocheni said
The minister describe the private sector as the engine of growth and wealth creation in any country while the government’s major responsibility is to provide the enabling environment for the private sector to operate.
He said tax incentive is a deliberate reduction in tax liability approved by government to encourage some corporate bodies to invest more, save more and import less, adding that reduction tax liability can be achieved through reduction in tax rate, tax deferment or outright exemption.
Ocheni said “priority sectors of the economy such as agriculture, mineral, oil and gas are given. Incentives in order to influence production cost. One form of tax incentive is the granting of capital allowances because capital expenditure is not admissible in earning profits, but definitely capital expenditures results in the creation of fixed assets which contribute immensely to profits earning.
“It is therefore reasonable to provide a form of relief in taxation in respect of these expenditure items. Therefore, special allowances called capital allowances are created to take care of this relief. When a fixed asset is put into use by a business, its value declines through physical wear and tear through passage of time.
“The law does not allow the cost of these assets as direct debits or charges against profit hence it becomes reasonable for a tax payer to set aside some portions of the profit annually for the replacement of the asset on the expiration of its useful lifespan.
He commended President Muhammadu Buhari for the huge success recorded in the implementation of the economic recovery and growth plan which led the country out of recession.