Halt tax waivers, concessions granted to corporate entities, Senate tells FG - NEWS FRONTIER DAILY


Wednesday, December 6, 2023

Halt tax waivers, concessions granted to corporate entities, Senate tells FG

The Senate  has asked the Federal  Government  to as a matter of urgency  stop tax waivers and concessions already granted to corporate entities as  the country was losing huge revenue to tax waivers and incentives.

According to the Senate, all companies should pay their taxes in full to the government coffers and then request for a rebate. 

The Senator Olamilekan Adeola,  APC, Ogun West led Senate  Committee on Appropriations said this to the Federal  Government  yesterday during an interactive session on the 2024 budget with the Finance Minister, Wale Edun, and his counterpart from the budget and economic planning ministry, Atiku Bagudu.

Adeola who noted that the committee had agreed that all taxes should be paid to the coffers of the government and then corporate entities should apply for rebates, said, "Since this is a transition period, can we half it? The provision for these waivers should be reduced by 50 per cent,"

Senator Adeola said, "What we are talking about here is it should go to Consolidated Revenue Fund of the Federal Government. The Federation has to do with everybody

We have also agreed on the issue of waivers that, firstly all monies should be paid to the coffers of government and then people can now apply for rebate and that we say yes, we are in a transition period that the provision that was made in this year's budget, since this is a transition period,can we have it by reducing it by 50% since we are in transition period. The provision for these waivers should be reduced by 50%.

In his response,  the Finance  Minister,  Wale Edun told the Committee  that they should hold on so that he will brief the lawmakers before the budget is passed. Whatever is expenditure must be appropriated. 

Edun who  told the panel that Nigeria lost about N3 trillion to tax waivers this year, said that the lawmakers’ advice would be looked into by the federal government’s fiscal policy and tax reform committee.

The Minister  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 has to be looked at, and the devil is in the details. But I think we are all agreeing that we should try as much as possible to move to a rebate system rather than up-front granting of waivers and other incentives even including interest incentives. 

“So, if somebody is going to be given a concessional interest rate, they pay the normal interest, carry out the transaction, and then they get a rebate.

“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.” 

 In his remarks,  Chairman,  Senate  Committee  on  Finance,  Senator Mohammed Sani Musa, APC, Niger East who noted that  the federal government should adopt the system of withholding taxes for tax waivers, said, “If you look at tax credits and the waivers, why can't we adopt a system like what we are doing with withholding taxes? Withholding taxes is going into a fund. After a while, if you can prove that you have paid all your taxes, they pay you your rebate back. So, why can't we do the same?”

On his part, Senator Ali Ndume,mAPC, Borno South  who noted that the government should be bold enough to stop the tax credits and waivers just as it did with the fuel subsidy, said, “I think we should be bold enough just like the president is very bold. I still want to use this opportunity to commend him for his speech to say there is no more fuel subsidy. 

“If he were to consult and talk to people, the subsidy would have still been there. So, if you come out from here and declare that no more waivers, it must be appropriated, and you as the Minister of Finance can do that. We have to make bold decisions. 

“Some people are taking advantage unnecessarily of Nigerians and benefiting to the detriment of Nigerians. We talk about tax credits; it is an expenditure and it should go through the National Assembly and there are no two ways about that. 

“Look at these illegalities, remove them, and then let us move ahead. If not, this country is being drained by some loopholes. It is our loopholes in revenue collection that is killing this country. 

“Few people are taking advantage of it. Look at the tax credit they collected for roads, up till now they did not do the roads. So, what the Constitution says is very clear. The ball is in your court, the President has done his own, no more subsidy, five months after Nigerians said yes but let us see the benefit and they are seeing the benefits bit by bit and more is coming.”

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