The Nigerian Content Development and Monitoring Board (NCDMB) has said it is leveraging the enabling business environment pillar of its 10-year Strategic Roadmap to collaborate with the Federal Inland Revenue Service (FIRS) in creating a platform for engaging oil and gas industry stakeholders on tax incentives available to companies that invest in Research in Development.
The Executive Secretary, NCDMB, Simbi Wabote, made this known in his welcome address at the Nigerian Oil and Gas Industry Suppliers’ Tax Incentives Awareness Workshop organised by the Board and FIRS in Yenagoa, Bayelsa State capital.
Wabote noted that the workshop was in tandem with Section 70 of the Nigerian Oil & Gas Industry Content Development Act 2010 mandating NCDMB to organise conferences, workshops, seminars, symposia, trainings, road shows and other public education fora to further the attainment of the goal of developing local content in the Nigerian oil & gas industry.
He said following the advice of experts, there was the urgent need to promote and educate companies in the sector on the tax regime, incentives, and benefits available for research and development within the Nigerian Tax Code identified as critical to private sector investment in research and innovation.
“Diagnostics of the level of R&D funding by the private sector in Nigeria indicates apathy, which is attributable in part to dearth of information on available incentives and benefits of funding and carrying out research.
“The consequence is not only significant capital flight in the acquisition of technology required for oil and gas projects and operations; but also players in the sector are tied to the apron and direct control of the foreign supply chain who control the technological advances arising from their R&D activities.
“In terms of strategic intent therefore, this Tax Awareness Workshop is intended to highlight the inherent benefits of investing in R&D and showcase mutual benefits to both the private sector and the government separately and collectively.
“The Federal Inland Revenue Service, through this workshop, will do a deep dive and provide critical insights into the incentives inherent in the Finance Act 2021 and how companies that invest in R&D can benefit from tax credit.
“Surely, opportunities exist within our tax laws for the industry to tap the benefits derived from investing in Research and Development. Workshops like this provide the necessary education and enlightenment to enable businesses to position themselves appropriately to benefit from making research an integral part of their business model.
“We have high hopes that this workshop will rectify gross underfunding of research in Nigeria, which is currently estimated at less than 0.2% of the national budget.
“It is our expectation that through the awareness that will be created from this workshop the private sector will reverse the trend.
“I must stress that we can no longer neglect R&D as it is key to local content development, enhancement of future tax revenue to the government, development of home-grown solutions and retention of industry spending within Nigerian financial institutions.
“It is a no-brainer that once a sustainable R&D investment culture is attained, it would be mutually beneficial to the public and private sectors”, he said.
In his keynote address, the Executive Chairman of FIRS, Mohammad Nami, said the revenue agency which is saddled with the administration of tax incentives in Nigeria, would continue to support all companies in Nigeria to take advantage of available fiscal incentives provided by the Nigerian tax laws.