The Senate Committee on Appropriations has urged the Federal Government to discontinue the provision of tax waivers and concessions to corporate entities, citing concerns about significant revenue losses.
During an interactive session on the 2024 budget, committee members proposed that companies fulfill their tax obligations entirely and subsequently apply for rebates if needed.
The committee, led by Senator Adeola Olamilekan (APC, Ogun West), expressed worry about the substantial revenue loss attributed to tax waivers and incentives.
Finance Minister Wale Edun informed the panel that Nigeria lost approximately N3 trillion to tax waivers in the current year.
Related News: Rep Committee Advocates Health Sector Emergency Declaration
Senator Mohammed Sani Musa (APC, Niger) suggested adopting a system similar to withholding taxes for tax waivers.
Under this approach, companies would pay their taxes upfront, and if they fulfill their obligations, they could later apply for rebates.
Senator Ali Ndume (APC, Borno) emphasized the need for bold decisions, drawing parallels to the President’s bold stance on ending fuel subsidies.
He advocated stopping tax credits and waivers, comparing it to the decisive move against fuel subsidies.
Ndume highlighted the importance of removing loopholes in revenue collection that some individuals exploit to the detriment of the country.
Senator Olamilekan proposed a transitional reduction of 50% in the provision for waivers during the interactive session.
In response, Finance Minister Edun acknowledged the committee’s advice and stated that it would be considered by the federal government’s fiscal policy and tax reform committee.
Edun emphasized the need to examine the practicality of implementing such a policy and to consider potential exceptions.
The proposal aims to transition to a rebate system, providing incentives after companies fulfill their tax obligations rather than granting upfront waivers and incentives.
The fiscal policy and tax reform committee will carefully consider the details and practical aspects of implementing this alternative approach.
You can also read: ECOWAS Raises Concerns Over Military Coups, Links Them to Regional Insecurity