The Senate’s Committee on Finance has expressed concern on Monday over the significant N17 trillion loss the country has suffered in tax waivers over the past five years.
Consequently, in order to address the widespread abuse of tax waivers, the Federal Inland Revenue Service (FIRS) has been advised to temporarily suspend them and implement a rebating system instead.
During the 2024 budget presentation of the FIRS to its committee on Finance, the Senate’s concerns about the reported misuse of tax waivers were prominently raised.
The Chairman of FIRS, Zacch Adedeji projected a total tax collection target of N19.4 trillion for 2024. Despite this, he emphasized the need to halt the proposed N2.7 trillion Tax Credit intended for road construction in the country by the Central Bank of Nigeria (CBN).
During his speech at the session for presenting the budget, Senator Sani Musa, Chairman of the Committee from APC Niger East, advised the FIRS Chairman to discontinue the misuse of tax waivers, which has resulted in a loss of approximately N17 trillion for the country over the past five years. He suggested replacing this practice with a rebating system instead.
“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 required measures are put in place.
“Available records show that within the last five years, about N17 trillion have been lost by the country to tax waivers.
“It should be suspended and possibly substituted with a rebating system”, he said.
During his presentation, the FIRS Chairman advised the committee that in order to alleviate the burden of multiple taxation on Nigerians, FIRS plans to work closely with a committee established by President Bola Tinubu to streamline the current 62 taxes down to just 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 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”, he said.
