The Nigerian Senate, through its Committee on Finance on Monday, frowned at the N17 trillion loss uncured by the country on tax waivers within the last five years.
It consequently urged the Federal Inland Revenue Service (FIRS) to suspend the tax waivers being largely abused and substitute them with a rebating system.
The Senate’s objection to the allegedly abused tax waivers came to the fore during the 2024 budget presentation of FIRS to its committee on Finance.
This is even as the Chairman of FIRS, Zacch Adedeji, who projected N19.4 trillion as the targeted total tax collection for 2024, insisted that the fresh N2.7 trillion tax credit planned for road construction in the country by the Nigerian National Petroleum Company Limited (NNPCL) should be stopped.
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 waiver abuse, which has cost the country about N17 trillion in losses within the last five years, should be suspended and substituted with the rebating system.
“Your projection of N19 trillion as total tax collection for 2024 is good when compared to N11.16 trillion achieved in 2023, but the Senate believes that you can do more, even to the tune of N30 trillion, if the required measures are put in place.
“As impressive and encouraging as 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 every year.
“Available records show that within the last five years, about N17 trillion has been lost by the country to tax waivers.
“It should be suspended and possibly substituted with a rebating system,” he said.
In his presentation, the FIRS Chairman informed the committee that to save Nigerians from multiple taxation, FIRS, in collaboration with the committee set up by President Bola Tinubu, would reduce the 62 different taxes to 8.
“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 percent 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,” he said.
On the controversy surrounding the implementation of the Tax Credit Scheme for road construction by NNPCL, the FIRS boss insisted that the N2.5 trillion 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 N2.5 trillion being spent on it by NNPCL should be exhausted before bringing fresh requests.
“N2.7 trillion of fresh requests being made should not be entertained because all NNPCL revenue should not be spent on roads when the Ministry of Works is there.”