Tax Expenditure in Sub Saharan Africa: The Nigerian Experience

Abstract

The Nigerian government established the National Economic Empowerment and Development Strategies (NEEDS) in 2003 to achieve its trade policy of which the reform of Nigeria Custom Services is one of the major functions. Over the years, custom and excise duties have been major sources of revenue apart from crude oil. However, the problems of corruption, fraud and malpractices together with inefficiencies and ineffectiveness in operations have hindered the desire to contribute maximally to the economic development of the nation. The central objective of trade policy was to provide protection for domestic industries and reduce the perceived dependence on imports; reduce level of unemployment and generate more revenues from the non-oil sector, hence tariffs on raw materials and intermediate capital goods were scaled down. Duty exemptions and concessions remain some of the quantitative policy instruments for attracting investment and boost domestic production. This paper will review; discuss Tax Expenditure and the Nigerian experience, especially on loss of revenue from customs.

Keywords: Custom duties, Revenue, Duty exemptions, Domestic production, Development.