CORPORATE SOCIAL RESPONSIBILITY IN CURBING INCREASED ENVIRONMENTAL POLLUTION IN NIGERIA: IMPERATIVE FOR ADEQUATE TAX INCENTIVES

Abstract

Tax incentive is an aspect of a government’s taxation policy designed to encourage tax payers to carryout economic activities by reducing the tax payable by them. Corporate Social Responsibility (CRS) refers to the ethical obligation of companies to contribute positively to the society and its environment The new Nigeria Tax Bill, 2024 provides that companies with an annual turnover of fifty million naira or less are exempted from paying companies income tax. Also, income tax obligation of large companies reduced from the current rate of 30% to 27.5% for the year 2025 and 25% for the subsequent years in the new tax regime of Tax Reform Bill which has been passed into law by the National Assembly. There is no withholding tax deduction on business income of small businesses. There is also an exemption from requirement to deduct and account for tax on payments to vendors. The Nigeria Tax Reform Bill, also granted economic development tax incentives to companies that are into waste management such as conversion of waste to useable materials, treatment of organic waste for disposal, operation of facilities for treatment of hazardous waste, treatment and disposal of toxic live or dead animals or contaminated waste and processing of metal and non- metal scrap and other articles into secondary raw materials involving mechanical or chemical transformation process. With these tax incentives, companies in Nigeria would be encouraged to perform their Corporate Social Responsibility (CRS) when the provisions of the Tax reform Bill on these tax incentives are adequately implemented. These companies can contribute to reducing environmental pollution through Corporate Social Responsibility. The problem that gave rise to the study is the quest for adequate implementation of the provisions of the Tax Reform Bill on tax incentives vis-viz corporate social Responsibility of corporate entities in curbing environmental pollution. The aim of this study is to examine the effect of tax incentives to Corporate Social Responsibility of corporate entities in curbing environmental pollution in Nigeria. The study will find that tax incentives to corporate bodies in Nigeria will lead to increased Corporate Social Responsibility spending as companies will have more resources to allocate towards curbing environmental pollutions in Nigeria. The study will conclude that adequate tax incentives will motivate companies to fulfill their Corporate Social Responsibility obligations by reducing pollution in the environment. The study will recommend the implementation of the new Nigeria tax law to ensure that companies take advantage of the tax incentives under the new tax regime in addressing environmental pollution and need to require these companies to channel their corporate social responsibility towards reducing environmental pollution in Nigeria.