The Senate has called on the Federal Government to cease the granting of tax waivers and concessions to corporate entities, emphasizing the significant revenue loss experienced by the country due to these incentives.

During an interactive session on the 2024 budget with Finance Minister Wale Edun and Budget and Economic Planning Minister Atiku Bagudu, the Chairman of the joint committee on Appropriations, Senator Adeola Olamilekan expressed concern about the revenue impact of tax waivers and suggested an alternative approach.

The committee proposed that all companies should pay their taxes in full to the government coffers and then apply for rebates.

Mr. Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, had previously highlighted that Nigeria incurs losses of up to N6 trillion in tax waivers annually.

Edun informed the panel that the country lost over N3 trillion to tax waivers this year.

Senator Mohammed Sani Musa recommended adopting a withholding tax system for tax waivers, stating, “If you look at tax credits and the waivers, why can’t we adopt a system like what we are doing with withholding taxes?”

He suggested creating a fund where withholding taxes are deposited, and companies can claim their rebates after proving full tax payment.

Senator Ali Ndume also urged the government to be bold in discontinuing tax credits and waivers, comparing it to the President’s decisive move on fuel subsidy removal.

He emphasized the need for bold decisions to curb exploitation by a few individuals.

Senator Adeola proposed a phased reduction of the provision for waivers during the transition period, suggesting a 50% reduction to address the issue.

Edun assured that the lawmakers’ advice would be considered by the federal government’s fiscal policy and tax reform committee, acknowledging the need to transition to a rebate system.

Edun stated, “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 are very careful about that, and what you have advised today will be taken as important input into our work.”