The Senate has asked the Executive arm of government to stop tax waivers granted to companies in Nigeria.
It said President Bola Ahmed Tinubu was courageous enough to stop oil subsidy and urged the minister of finance, Wale Edun, to also take the bold step by stopping the controversial tax waivers.
Through its Committee on Appropriations, the Red Chamber said yesterday in Abuja that the country is losing huge revenue to tax waivers and incentives.
The Senate chief whip who is also the vice chairman of the Committee on Appropriation, Ali Ndume, said if the president was taking bold steps aimed at correcting the wrongs, his ministers must follow suit.
“The president took the bold step by ending the fuel subsidy. We believe Nigerians will start getting the benefits. If the president had said he wanted to consult the people, there would still be fuel subsidy. So, as the Minister of Finance, you must take the bold step and end the tax waiver just as the president did because tax waiver is draining the country,” Ndume said.
Ndume, however, suggested that all companies should pay their taxes in full to the government coffers and then request for a rebate.
The chairman of the committee, Senator Adeola Olamilekan (APC, Ogun West), during an interactive session on the 2024 budget with the finance minister, Wale Edun, and his counterpart from the budget and economic planning ministry, Atiku Bagudu, insisted they must end the tax waiver immunity.
The finance minister had told the panel that Nigeria lost about N3 trillion to tax waivers this year.
Senator Mohammed Sani Musa (APC, Niger) said the federal government should adopt the system of withholding taxes for tax waivers.
He said, “If you look at tax credits and the waivers, why can’t we adopt a system like what we are doing with withholding taxes? Withholding taxes is going into a fund. After a while, if you can prove that you have paid all your taxes, they pay you your rebate back. So, why can’t we do the same?”
Ndume (APC, Borno) said the government should be bold enough to stop the tax credits and waivers just as it did with the fuel subsidy.
He said, “I think we should be bold enough just like the president is very bold. I still want to use this opportunity to commend him for his speech to say there is no more fuel subsidy.
“If he were to consult and talk to people, the subsidy would have still been there. So, if you come out from here and declare that no more waivers, it must be appropriated, and you as the Minister of Finance can do that. We have to make bold decisions.
The finance minister, in his response, said the lawmakers’ advice would be looked into by the federal government’s fiscal policy and tax reform committee.
Edun said, “In trying to implement such a laudable policy, it is important to look at the practicality and decide how it can be done, whether it can be done in one fell swoop, or whether there are some obvious exceptions.
“That has to be looked at, and the devil is in the details. But I think we are all agreeing that we should try as much as possible to move to a rebate system rather than up-front granting of waivers and other incentives even including interest incentives.
“So, if somebody is going to be given a concessional interest rate, they pay the normal interest, carry out the transaction, and then they get a rebate.
“The fiscal policy and tax reform committee is very careful about that and what you have advised today will be taken as important input into our work,” he said.
