The Senate’s Committee on Finance has expressed deep concern over the N17 trillion loss incurred by Nigeria in tax waivers over the last five years. During the 2024 budget presentation of the Federal Inland Revenue Service (FIRS), the committee demanded the suspension of abused tax waivers and proposed the introduction of a rebating system.
In response, FIRS Chairman Zacch Adedeji, projected N19.4 trillion as the targeted total tax collection for 2024, but faced opposition to the planned N2.7 trillion tax credit for road construction from the Central Bank of Nigeria (CBN).
Senator Sani Musa (APC, Niger East), the committee’s chairman, emphasized the need to address the abuse of tax waivers, citing substantial yearly losses. He urged FIRS to suspend the current system and consider implementing a rebating system instead. Additionally, he challenged FIRS to strive for a higher tax collection target of up to N30 trillion by implementing necessary measures.
Adedeji also highlighted the government’s initiative to streamline the multitude of taxes collected in the country. Collaborating with a committee set up by President Bola Tinubu, FIRS aims to reduce the 62 different taxes to eight, in an effort to alleviate the issue of multiple taxation.
Furthermore, the controversy surrounding the implementation of the Tax Credit Scheme for road construction by CBN was addressed. Adedeji stressed the necessity to fully utilize the N2.5 trillion allocated to the existing scheme before considering any additional funding, arguing that it’s crucial to optimize resources before introducing new requests.
The Senate’s determination to investigate and reform Nigeria’s tax system demonstrates a concerted effort to address significant revenue losses and streamline tax collection.
