TAX ALLOWANCES, EXEMPTIONS, AND HOLIDAYS IN NIGERIA: CHALLENGES AND PROSPECTS

Abstract

This study explores the challenges and prospects of tax allowances, exemptions, and holidays in Nigeria. These tax incentives are designed to stimulate economic growth, attract investments, and foster sectoral development across various industries, including agriculture, manufacturing, mining, oil and gas, ICT, tourism, and healthcare. Despite their potential benefits, the effectiveness of these incentives is undermined by several challenges, such as policy inconsistency, administrative inefficiency, corruption, tax evasion, and a complex tax code. The study identifies key areas for improvement, including the establishment of stable and consistent tax policies, simplification of the tax code, leveraging technology for efficient administration, enhancing transparency and accountability, strengthening enforcement mechanisms, and conducting robust monitoring and evaluation. By addressing these challenges and adopting best practices, Nigeria can optimize its tax incentive framework, making the country more attractive to investors and fostering sustainable economic growth. The findings underscore the importance of strategic reforms and a commitment to transparency and efficiency in leveraging tax incentives to achieve long-term economic development.