By Nathaniel Zacchaeus, Abuja
The Senate yesterday lamented the N17trn that the country had lost to tax waives which were abused by individuals and corporate firms in the last five years.
The red chamber through its Committee on Finance, chaired by Senator Sani Musa, has therefore, urged the Federal Inland Revenue Service (FIRS) to suspend any form of tax waivers being currently abused and substitute it with the rebating system.
The Senate objected to the alleged abuse of tax waivers when the management team of the FIRS, led by its Chairman, Zach Adedeji, defended the agency’s 2024 budget before the committee on Finance.
Adedeji, on the occasion, projected N19.4trn as the agency’s targeted total tax collection for 2024.
He urged the senators to support his position that the fresh N2.7trn tax credit planned for road construction in the country by the Nigerian National Petroleum Corporation Limited (NNPCL), should be stopped.
Musa, the Senate panel’s Chairman, agreed with the FIRS boss that the tax waiver abuse which had cost the country about N17trn loss in the last five years, should be suspended and substituted with the rebating system.
The Senator said, “Your (FIRS) projection of N19trn as total tax collection for 2024 is good when compared to N11.16trn achieved in 2023 but the Senate believes that you can do more even to the tune of N30trn 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 N17trn have been lost by the country to tax waivers. It should be suspended and possibly substituted with a rebating system,” he said.
*Explains how tax reduction from 62 to eight will tackle food scarcity
The FIRS Chairman informed the committee that the FIRS in collaboration with the committee set up by President Bola Tinubu, would reduce the 62 different taxes being collected at the federal and sub-regional levels to eight.
He said doing so would reduce the burden on Nigerians and tackle the current food crisis being experienced in Nigeria.
Adedeji said, “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. The mandate he gave to the committee was that they should work on only one digit tax.
“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.
“So, the others are just constituting problems. However, because we run a federation and we have laws, anything that has to do with motor parks and road taxes among others, is under the purview of the state. We are already consulting and engaging the state government on it.
“We have also demonstrated to them that when we want to move all those taxes, especially the ones that led to an increase in food prices to the centre.
“There is a report that when food items are moved from the North before they get to the South, they pay more than 40 types of taxes. That’s part of the reasons food prices are increasing in Nigeria.
“The most unfortunate thing about this is that most of those taxes are not well coordinated and were not being accounted for.
“It is just creating problems for us so we are working through the joint tax board to make sure that we harmonise and let the states see that such tax is giving us problems.
“We are also awaiting the report of the Committee set up by the President to harmonise all the taxes. 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.”
*FIRS seeks NASS support to stop N2.7trn fresh tax credit
On the controversy trailing the implementation of the Tax Credit Scheme for road construction by CBN, the FIRS boss insisted that the N2.5trn 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 N2.5trn being spent on it by NNPCL should be exhausted before bringing fresh requests.
“N2.7trn 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 “.
