In a budget presentation session held on Monday, the Senate Committee on Finance expressed concern over the staggering N17 trillion loss incurred by Nigeria within the last five years due to tax waivers. The committee, chaired by Senator Sani Musa (APC Niger East), urged the Federal Inland Revenue Service (FIRS) to suspend the allegedly abused tax waiver system and consider implementing a rebating system instead.
During the session, FIRS Chairman, Zacch Adedeji, projected a total tax collection target of N19.4 trillion for 2024. However, Senator Musa emphasized that while the performance and projections of FIRS under Adedeji’s leadership were commendable, more efforts were needed to maximize tax revenue. He pointed out that the abuse of tax waivers has led to significant losses for the country, amounting to N17 trillion over the past five years.
Senator Musa stressed the importance of suspending the current tax waiver system, citing the need to mitigate avoidable losses and explore alternative mechanisms such as rebating. He urged FIRS to take decisive action in reforming the tax regime to ensure optimal revenue generation for the nation.
In response, FIRS Chairman Adedeji highlighted ongoing efforts to streamline Nigeria’s tax system. He revealed plans to reduce the number of taxes collected from 62 to 8, in collaboration with a committee established by President Bola Tinubu. Adedeji emphasized the need to address multiple taxation issues to create a more efficient and effective tax framework.
Regarding the controversy surrounding the implementation of the Tax Credit Scheme for road construction by the Central Bank of Nigeria (CBN), Adedeji reiterated the importance of fully utilizing the N2.5 trillion allocated to the scheme before considering any additional funding. He cautioned against diverting resources from other essential sectors, emphasizing the need for prudent fiscal management.
The Senate Committee on Finance underscored the significance of tax reforms and responsible fiscal policies in driving sustainable economic growth and development. As discussions continue, stakeholders are hopeful that collaborative efforts between the government and relevant agencies will lead to tangible improvements in Nigeria’s tax administration and revenue generation processes.
