• Thursday, February 29, 2024
businessday logo

BusinessDay

Senate asks FG to stop tax waivers for corporate entities 

Senate confirms four out of five CBN board members

The Senate has called on the Federal Government to discontinue providing tax waivers and concessions to corporate organisations.

The Senate Committee on Appropriations expressed concerns over substantial revenue loss attributed to these tax incentives, emphasizing the need for companies to fulfil their tax obligations entirely.

On Wednesday, the committee proposed an alternative approach during an interactive session on the 2024 budget with Wale Edun, Minister of Finance, and Atiku Bagudu, Minister of Budget and Economic Planning.

The suggestion is that companies pay their taxes upfront and apply for rebates if deemed necessary.

The committee, chaired by Adeola Olamilekan, highlighted the abuse of economic policies during the screening and confirmation of Adedeji. Members of the Senate raised alarms about the loss of billions of naira in revenue due to these policies.

Edun disclosed to the panel that Nigeria lost approximately N3 trillion to tax waivers this year. In response to the concerns raised by the Senate, Senator Mohammed Sani Musa proposed adopting a system similar to withholding taxes for tax waivers. He suggested that companies prove tax compliance before receiving rebates.

Read also Senate summons NPA over $1.85bn, N1.87bn debt

Ali Ndume urged the government to emulate the bold decision on fuel subsidies and end tax credits and waivers.

He emphasized the need to address loopholes in revenue collection that benefit a few at the nation’s expense.

Olamilekan, the committee chairman, suggested a transitional approach by reducing the provision for waivers by 50 per cent. Edun assured that the federal government’s fiscal policy and tax reform committee would consider the lawmakers’ advice.

Edun emphasized the importance of practicality in implementing such policies, stating that the details need careful consideration. He acknowledged the agreement to move towards a rebate system rather than the upfront granting of waivers and incentives.

“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. 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.

“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”, Edun said.