- Senate Committee on Appropriations urges the government to end tax waivers, proposing full tax payment with subsequent rebate requests
- Finance minister reveals Nigeria lost N3 trillion to tax waivers, committee suggests a withholding tax-like system for rebates
The Senate Committee on Appropriations has called on the federal government to cease tax waivers and concessions granted to corporate entities, emphasizing that the country is losing substantial revenue due to these incentives. The committee proposed that all companies pay their taxes in full to the government and subsequently request a rebate.
During an interactive session on the 2024 budget with the finance minister, Wale Edun, and the minister of budget and economic planning, Atiku Bagudu, the committee expressed concerns about the significant revenue loss attributed to tax waivers. The finance minister revealed that Nigeria lost approximately N3 trillion to tax waivers this year.
Senator Mohammed Sani Musa suggested adopting a system similar to withholding taxes for tax waivers. He proposed that taxes be withheld, and if companies can demonstrate full tax payment, they would receive a rebate. Senator Ali Ndume emphasized the need for bold action to eliminate tax credits and waivers, drawing parallels with the government’s decisive move to end fuel subsidies.
Senator Adeola Olamilekan, the committee chairman, concurred with the proposal to have companies pay taxes to the government first, followed by applying for rebates. He suggested reducing the provision for waivers by 50% during the transition period.
In response, the finance minister acknowledged the committee’s advice and mentioned that it would be considered by the federal government’s fiscal policy and tax reform committee. Edun highlighted the importance of practicality in implementing such policies, emphasizing the need to carefully examine details and exceptions in transitioning to a rebate system instead of upfront granting of waivers and incentives.
The fiscal policy and tax reform committee will review the recommendations provided by the Senate Committee on Appropriations to improve the country’s revenue collection system.