The groups said the law regulating the granting of incentives places enormous discretionary powers on the executive arm of government.
Some civil society organisations have advocated a fair tax expenditure for the Nigerian government.
The groups in partnership with the National Institute for Legislative and Democratic Studies (NILDS) made the call on Monday in Abuja at a two-day workshop titled 'Identifying and Strengthening Pathways for Reforming Tax Expenditure Governance in Nigeria.'
The workshop was specifically organised to imbue relevant lawmakers with the requisite understanding and technical know-how concerning fiscal and tax regime policies and reforms in the country, especially as they relate to tax expenditure.
The groups, led by the Civil Society Legislative Advocacy Centre (CISLACl, in their various presentations on the opening day of the workshop, said Nigeria won't have an equitable and reflective tax expenditure regime without the input of the National Assembly to come up with proper legislation hence the capacity-building workshop for the lawmakers.
For the legislation to work effectively, civil society operators believe lawmakers must also ensure strict compliance with its enforcement by other arms of government in their oversight responsibilities.
CISLAC Executive Director, Auwal Rafsanjani, noted that the Nigerian tax expenditure governance system is plagued with abuses, which are observable to the public, saying reports of indiscriminate waivers and concessionary approvals have all contributed to questioning the bearing and economic sustainability of this initiative of the government.
The law regulating the granting of incentives, Mr Rafsanjani said, places enormous discretionary powers on the executive arm of government.
While sundry incentives have been given by the Nigerian government over the years, they have not produced the corresponding volume of investments needed to drive the economy.
"The governance of the incentive regime is also at best opaque and lacks the scrutiny necessary to guarantee transparency and accountability in the process leading to a situation where the supposed benefits are not optimised," the CISLAC executive director said.
In his opening remarks, the Director General of NILDS, Abubakar Sulaiman, noted that Nigeria is confronted with a revenue challenge amidst a rising debt profile despite abundant opportunities., saying, "Yet all sectors of the economy require increased government funding to address lingering challenges. Amidst this need for increased public spending, tax expenditures offer an opportunity to fund national development."
Mr Sulaiman, a professor, represented at the occasion by Nuhu Yakub, former vice chancellor of UniAbuja, said that as the Nigerian government continues to seek new ways of reforming the fiscal policy space, the workshop presents an opportunity for "stakeholders to engage in ways to harness the opportunities that tax expenditure presents for the nation's development.
Experience from OECD countries, the DG noted, shows that there are legitimate reasons for tax expenditures which include promoting business growth, encouraging job creation, and reducing the burden that tax producers place on consumers by transferring the "tax burden."
OECD, the Organisation for Economic Cooperation and Development, is a forum comprising 37 countries with market-based economies which collaborate to develop policy standards to promote sustainable economic growth.
For the challenges, Mr Sulaiman said that tax expenditures are politically tempting as they may not be subject to regular scrutiny, noting that "In most cases, tax exemptions, for instance, are issued by policy statements. Overseeing such a space may, therefore, be cumbersome, as the benchmark for such oversights is not clearly provided for in a legislative framework. The debate over whether or not a legislature can oversee policy is another reason why tax expenditures can slide under the legislative lens.
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"But again, issues around tax expenditures are not binary. It requires clear understanding and proper contextualisation and understanding," he said.
"Fairness, justice, and equity are issues related to tax expenditures. While big firms receive tax waivers to continue operations, poor people continue to pay higher prices for goods and services.
"Furthermore, it appears that over the years, tax policy has been aimed at taxing the poor rather than the rich. Hence, finding a fair balance is crucial."
Mr Sulaiman charged the lawmakers present at the workshop to take maximum advantage of the capacity building in their quest to fine-tune Nigeria's tax policy regime to reflect current realities to help drive the 'Renewed Hope Agenda' of President Bola Tinubu.
Dignitaries who attended the event included relevant lawmakers from the House of Representatives and Senate, the Country Director of International Budget Partnership who was represented and representatives of civil society groups, among others.
