The National Assembly joint committee on Appropriations has urged the federal government to stop tax waivers and concessions already granted to corporate entities.
This was just as the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, yesterday, stated that non-interest financial market also known as Islamic financial market offers cheaper and more sustainable way to raise funding for major infrastructure, hinting that Nigeria would need to play deeper in the global non-interest market.
The National Assembly panel said the country was losing huge revenue to tax waivers and incentives.
It, however, suggested that all companies should pay their taxes in full to the government coffers and then request for rebate.
The chairman of the joint committee, Senator Adeola Olamilekan (APC, Ogun West), and other members stated this 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.
The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Mr. Taiwo Oyedele had last month said the country incurred losses of up to N6 trillion in tax waivers annually.
He said the country was generating a similar amount of revenue annually.
Oyedele, stated that the levels of government had failed to measure the impact of tax waivers on the economy of the country
The finance minister had told the panel that Nigeria lost over N3 trillion to tax waivers this year.
Senator Mohammed Sani Musa (APC, Niger) said the federal government should adopt the system of withholding taxes for tax waivers.
He 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?”
Adeola, said the committee had agreed that all taxes should be paid to the coffers of the government and then corporate entities should apply for rebates.
“Since this is a transition period, can we half it? The provision for these waivers should be reduced by 50 per cent,” he said.
The finance minister, in his response, said the lawmakers’ advice would be looked into by the federal government’s fiscal policy and tax reform committee.
Edun 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.”
