The Centre for Social Justice (CSJ) has criticised the implementation of an estimated N34 trillion in customs duty waivers in the 2025 financial year, describing the tax expenditure regime as mismanaged and calling for urgent legislative reforms to strengthen fiscal accountability.
In a statement signed by its Lead Director, Eze Onyekpere, the organisation said it was concerned by the recent disclosure made by the Nigeria Customs Service (NCS) before the House of Representatives Committee on Finance that it implemented customs duty waivers valued at N34 trillion in 2025.
According to the NCS, the waivers were granted on the authority of the Minister of Finance in line with existing laws, while the service only implemented the approvals.
The House Committee on Finance has since requested a comprehensive breakdown of the beneficiaries, the legal basis and the purpose of the waivers.
CSJ noted that customs duty waivers form only a part of Nigeria’s overall tax expenditure, which also includes tax holidays and other incentives granted to companies, particularly to attract investment into critical sectors.
The organisation argued that the total value of tax expenditures for 2025 would likely exceed the N34 trillion customs duty waiver figure.
It also highlighted what it described as a glaring contradiction between the scale of the waivers and the Federal Government’s revenue performance.
According to CSJ, the Federal Government generated N28.23 trillion in consolidated revenue in 2025 against a target of N36.35 trillion, making it difficult to justify waiving revenue exceeding what the government actually retained.
“It is unreasonable for a government facing a high budget deficit to forfeit more revenue than it earns while resorting to increased borrowing,” the statement said.
The organisation argued that the waivers appeared to violate provisions of the Fiscal Responsibility Act (FRA), particularly Section 29(1), which requires any proposed tax expenditure to be accompanied by an evaluation of its budgetary and financial implications over four years.
The law also stipulates that such tax expenditures should not adversely affect government revenue unless supported by countervailing revenue measures such as expanding the tax base or increasing tax rates.
CSJ questioned whether the required evaluations were conducted, whether the proposals were submitted to the National Assembly, and whether any countervailing measures were approved to offset the revenue losses arising from the waivers.
The organisation further cited the Nigerian Tax Policy 2017, which requires annual reporting on tax incentives, including an assessment of revenue forgone against the actual benefits realised.
It questioned the absence of publicly available reports evaluating the effectiveness of tax waivers granted over the years.
Describing the current tax expenditure framework as susceptible to abuse, CSJ said no public official should possess broad discretionary powers to waive significant government revenues at a time of mounting fiscal deficits and rising public debt.
To address the situation, the organisation called on the National Assembly to amend relevant laws to cap total annual tax expenditures at 10 per cent of the actual revenue generated in the preceding financial year.
It also recommended that all proposed tax expenditures be presented alongside the annual Appropriation Bill for legislative approval and urged lawmakers to strengthen oversight to ensure full compliance with the Fiscal Responsibility Act.
