FG Introduces Electronic Monitoring System to Curb Tax Expenditure Abuse
By Patience Ikpeme
In a significant development aimed at curbing tax expenditure and ensuring fiscal policy compliance, the Minister of Finance and Coordinating Minister for the Economy, Mr. Wale Edun, has announced the implementation of an electronic monitoring and evaluation framework within the Import Duty Exemption Certificate (IDEC) process.
This innovative framework, known as the Import Duty Exemption Certificate Monitoring and Evaluation Platform (IMEP), seeks to enhance transparency and efficiency in the management of customs duty exemptions granted by the Ministry.
The Minister in a statement said it had become necessary to introduce this new system.
According to him, “the IMEP is a critical step towards reducing tax expenditures associated with IDECs and enhancing the effectiveness of fiscal incentives on our economy.”
The Minister stated the objectives of the IMEP, highlighting its core features and expected impact. He underscored the importance of leveraging technology to enforce compliance with fiscal policies and ensure that tax incentives are allocated judiciously for maximum economic benefit.
The IMEP, Minister Edun explained, will enable real-time monitoring and evaluation of customs duty exemptions issued to government entities, companies, NGOs, and international organizations. Through this system, the Federal Ministry of Finance will gain access to a comprehensive automated tool to measure the impact of these exemptions accurately.
Key features of the IMEP include a duty claw-back mechanism, e-report generation, a centralized database, factory geo-location tagging, industry qualification status validation, inter-MDA integration, incentive tracking, and issuance of Demand Notices to defaulters. These functionalities are designed to streamline the application process, improve oversight, and prevent ineligible entities from exploiting tax incentives.
“We aim to significantly reduce the cost of tax expenditure and ensure that every exemption granted translates into tangible economic outcomes,” Minister Edun remarked.
The introduction of the IMEP reflects the government’s commitment to fiscal responsibility and transparency in economic management. By leveraging technology to enhance monitoring and evaluation processes, the Ministry of Finance seeks to eliminate misuse of tax expenditures and strengthen the direct measurement of incentives’ impact on the economy.
Responding to concerns about implementation challenges and timeline, Minister Edun reassured stakeholders of a phased rollout, with comprehensive training and support provided to relevant agencies and organizations.
“We are confident that the IMEP will serve as a game-changer in fiscal governance, enabling us to better manage tax expenditures and drive sustainable economic growth,” said Mr Edun.
The Federal Government anticipates that the IMEP will bolster public confidence in fiscal management and contribute to the efficient allocation of resources towards national development priorities.
The platform is slated to be fully operational within the coming months, marking a significant milestone in Nigeria’s drive towards fiscal accountability and economic transformation.
