Nigerian senate
Stop tax waivers, Senate tells FG. On Wednesday, the Senate Committee on Appropriations urged the federal government to halt the giving of tax breaks and concessions to corporations.
The committee voiced worry that the country is losing significant revenue as a result of tax breaks and incentives.
As an alternative, the committee suggested that businesses satisfy all of their tax duties in order to contribute to government finances and then seek for rebates if necessary.
Senator Adeola Olamilekan (APC, Ogun West) and other members of the committee revealed this during an interactive session on the 2024 budget with Minister of Finance Wale Edun and his counterpart from the Budget and Economic Planning Ministry, Atiku Bagudu.
The finance minister told the panel that tax breaks cost Nigeria N3 trillion this year.
Senator Mohammed Sani Musa (APC, Niger) suggested that the FG implement a system of withholding taxes for tax waivers.
“If you look at tax credits and waivers, why can’t we adopt a system like what we’re doing with withholding taxes?” he asked. Withholding taxes are deposited into a fund. After a period, if you can show that you have paid all of your taxes, they will refund your rebate. So, why can’t we follow suit?”
Senator Ali Ndume (APC, Borno) said the government should be courageous enough to halt tax credits and waivers, like it did with gasoline subsidies.
“I think we should be bold enough, just like the president,” he remarked. I’d want to use this opportunity to thank him for his speech in which he stated that there will be no more gasoline subsidies.
“If he had consulted and talked to people, the subsidy would still have been there.” So, if you come out from here and proclaim that there will be no more exemptions, it must be appropriated, and you as the Minister of Finance have the authority to do so. We must make courageous decisions.
“Some people are taking advantage of Nigerians unnecessarily and benefiting to the detriment of Nigerians.” We’re talking about tax credits; it’s an expenditure, and it has to go through the National Assembly, no doubt about that.”
“Look at these illegalities, remove them, and then let us move forward,” the Senator added. If not, such loopholes are draining this country. Our revenue collection flaws are killing our country.
“Only a few people are using it. Look at the tax credits they earned for roads; they did not build the roads till today. So the Constitution is crystal clear. The ball is in your court; the President has done his own thing, no more subsidies, five months after Nigerians said okay but let us see the advantages, and they are seeing the benefits bit by bit, with more on the way.”
According to Olamilekan, the committee agreed that all taxes should be paid into the government’s coffers before corporate organizations could ask for rebates.
“Since this is a transition period, can we half it? The provision for these waivers should be reduced by 50 per cent,” he said.
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 must be investigated, and the devil is in the details.” But I believe we can all agree that we should strive to move as much as possible to a rebate system rather than offering waivers and other incentives up front, including interest incentives.”
“So, if someone is going to be given a concessional interest rate, they pay the normal interest, complete the transaction, and then they get a rebate,” Edun explained.
“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.”