Nigerian Senate Instructs FIRS to Suspend Tax Waivers

On Monday, the Nigerian Senate through its Committee on Finance, announced that it was disappointed at the N17 trillion loss suffered by the country on tax waivers for the past five (5) years.

The Senate has asked the Federal Inland Revenue Service to suspend the tax waivers that have been abused for a long time and substitute them with a rebating system.

The Nigerian Senate’s objection to the allegedly abused tax waivers followed the 2024 budget presentation of FIRS to its Finance Committee.

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The Chairman of FIRS, Zacch Adedeji, who projected N19.4tn as the targeted total tax collection for 2024, stated that the fresh N2.7tn Tax Credit planned for road construction in the country by the Central Bank of Nigeria should be stopped.

In his remarks at the budget presentation session, the Chairman of the Committee, Senator Sani Musa (APC Niger East), told the FIRS Chairman that tax waiver abuse, which has cost the country about N17 trillion within the last five years, should be suspended and substituted with the rebating system.

He said, 

• Your projection of N19tn as total tax collection for 2024 is reasonable compared to N11.16tn achieved in 2023, but the Senate believes that you can do more, even to the tune of N30tn, if required measures are implemented.

• As impressive and encouraging as the performance and projections of FIRS are, under your leadership, this committee and, by extension, the Senate, on a serious note, urge you to look at the direction of tax waivers largely being abused, with attendant and avoidable losses being incurred yearly. Available records show that within the last five years, about N17tn has been lost by the country to tax waivers. It should be suspended and possibly substituted with a rebating system.

• In his presentation, the FIRS chairman informed the committee that to save Nigerians from multiple taxation, FIRS, in collaboration with a committee set up by President Bola Tinubu, would reduce the 62 different taxes to 8.

He noted, 

• President Bola Tinubu has seen the issue of multiple taxes as a pool of problems. He set up the presidential committee on tax reforms and fiscal policy. Today, in Nigeria, 62 types of taxes are being collected. The sad news is that less than eight out of 62 accounted for 97% of the collection.

• We are already consulting and engaging the state government on it. We won’t have more than eight or nine taxes that the state and federal governments will collect.

On controversy concerning the CBN implementing the Tax Credit Scheme for road construction, the FIRS boss insisted that the N2.5tn earlier committed to it must be fully implemented before considering any fresh one.

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He said, 

• Regarding tax credit, I said that the programme is laudable but that the N2.5 trillion spent on it by NNPCL should be exhausted before a fresh request is brought.

• N2.7tn fresh request being made should not be entertained because all NNPC revenue should not be spent on roads when the Ministry of Works is there.