The N17 trillion loss the nation has suffered from tax waivers over the last five years was expressed with disapproval by the Senate on Monday through its Committee on Finance.
As a result, it recommended that the Federal Inland Revenue Service implement a rebating system in place of the heavily exploited tax waivers. The Senate’s concern to the purportedly misused tax exemptions became apparent when FIRS’s 2024 budget was presented to the Finance Committee.
Similarly, Zacch Adedeji, the Chairman of FIRS, stated that the Central Bank of Nigeria’s new N2.7tn Tax Credit for road building in the nation should be discontinued. Adedeji projected N19.4tn as the intended total tax collection for 2024.
In his remarks at the budget presentation session, the Chairman of the committee, Senator Sani Musa (APC Niger East), told the FIRS Chairman that tax waivers abuse which has cost the country about N17tn loss within the last five years should be suspended and substituted with rebating system.
He said, “Your projection of N19tn as total tax collection for 2024 is good when compared to N11.16tn achieved in 2023 but the senate believes that you can do more even to the tune of N30tn if required measures are put in place.
“ As impressive and encouraging the performance and projections of FIRS are , under your leadership , this committee and by extension , the Senate , on a serious note , urge you to look at the direction of tax waivers largely being abused with attendant and avoidable losses being incurred on yearly basis . Available records show that within the last five years , about N17tn have been lost by the country to tax waivers. It should be suspended and possibly substituted with a rebating system.”
The FIRS chairman, in his presentation, informed the committee that to save Nigerians from multiple taxation, FIRS in collaboration with a committee set up by the President Bola Tinubu , would reduce the 62 different taxes to 8.
He noted, “President Bola Tinubu has seen the issue of multiple taxation as a pool of problems. That is why he set up the presidential committee on tax reforms and fiscal policy. As of today in Nigeria, we have 62 types of taxes being collected. The sad news about that is that less than eight out of the entire 62, accounted for 97 per cent of the collection.
“We are already consulting and engaging the state government on it. At the end of the day, we won’t have more than eight or nine taxes that the state and federal government would be collecting.”
On controversy concerning the implementation of the Tax Credit Scheme for road construction by the CBN, the FIRS boss insisted that the N2.5tn earlier committed to it, must be fully implemented before thinking of any fresh one.
He said, “Regarding tax credit, what I said was that the programme is laudable but that the N2.5trn being spent on it by NNPCL should be exhausted before bringing a fresh request.
“N2.7tn fresh request being made should not be entertained because all NNPC revenue should not be spent on roads when the Ministry of Works is there.”
