The Senate, through its Standing Committee on Finance, on Monday, frowned at N17trillion loss incurred by the Federal Government on tax waivers in the last five years.
The Red Chamber consequently urged the Federal Inland Revenue Service (FIRS) to suspend the current tax waiver policy over its alleged abuse and substitute same with a tax rebate system.
Our Correspondent reports that a tax rebate is a reimbursement made to a taxpayer for an excess amount paid in taxes during the year. It occurs when the taxes paid by an individual or a business – through payroll deductions or estimated payments – exceed the liability.
The Senate’s position was disclosed during the 2024 budget presentation of FIRS to the legislative committee on Finance at the Senate Wing of the National Assembly in Abuja, on Monday.
This is even as the chairman of FIRS, Zacch Adedeji, who made a projection of N19.4trillion as total tax collection for 2024, insisted that the fresh N2.7trillion Tax Credit planned for road construction in the country by the Nigerian National Petroleum Company Limited (NNPCL), be stopped.
In his remarks at the budget presentation session, the chairman of the Senate Committee on Finance, Senator Sani Musa (APC, Niger East), told the FIRS chairman that tax waiver abuse, which has cost the country about N17trillion loss within the last five years should be suspended and substituted with a tax rebating system.
“Your projection of N19trillion as total tax collection for 2024 is good when compared to N11.16trillion achieved in 2023 but the Senate believes that you can can do more even to the tune of N30trillion 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 N17trillion have been lost by the country to tax waivers.
“It should be suspended and possibly substituted with a rebating system,” Senator Musa said.
Earlier, the FIRS chairman in his presentation, informed the Senate committee that to save Nigerians from multiple taxation, FIRS, in collaboration with a committee set up by President Bola Tinubu, would reduce the 62 different taxes to only eight.
“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 account for 97 per cent of the collections.
“We are already consulting and engaging the state governments on it
“At the end of the day, we won’t have more than eight or nine taxes that the state and federal governments would be collecting,” Adedeji stated.
On the controversy trailing the implementation of Tax Credit Scheme for road construction by NNPCL, the FIRS boss insisted that the N2.5trillion earlier committed to the scheme 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 N2.5trillion being spent on it by NNPCL should be exhausted before bringing fresh request.
“N2.7trillion 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,” the FIRS boss added.
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