Senate Committee Reveals N17 Trillion Loss Over Tax Waivers

The Senate Committee on Finance on Monday revealed that Nigeria has lost around N17 trillion to tax waivers extended to some individuals and corporate establishments in the last five years.

Speaking during an interactive session with the management team of the Federal Inland Revenue Service (FIRS), the chairperson of the committee Sani Musa disclosed the loss, adding that former President Muhammadu Buhari's administration granted tax waivers to some corporate houses in the country.

The Senate Committee on Appropriations in December asked the government to stop tax waivers as it causes less revenue for Nigeria.

Musa, who is representing Niger East on the platform of the All Progressives Congress (APC), told the federal government to consider a rebate system instead of a tax waiver.

"Available records show that within the last five years, about N17 trillion has been lost by the country to tax waivers. It should be suspended and possibly substituted with a rebating system," he said, Premium Times reported.

"Your (FIRS) projection of N19 trillion as total tax collection for 2024 is good when compared to N11.16 trillion achieved in 2023, but the Senate believes that you can do more even to the tune of 30 trillion if required measures are put in place," Musa said.

Musa said that the performance and projections of FIRS look impressive and encouraging, urging that the government should understand that tax waivers are "being abused with attendant and avoidable losses being incurred on a yearly basis."

In response, FIRS chairperson Zach Adedeji said that his team will review the tax reforms and fiscal policy, which was set up by President Bola Tinubu.

Adedeji explained that after Tinubu took over the office on May 29 last year, he learned that there are "issues of multiple taxation as a pool of problems that is why he set up the presidential committee on tax reforms and fiscal policy."

"The mandate he gave to the committee was that they should work on only one digit tax," FIRS chairperson said, revealing that the country is currently collecting 62 types of taxes.

He noted that only less than eight out of all 62 types of taxes, generate over 97% of the revenue for the Nigerian government. Adedeji acknowledged that the other tax types are just constituting problems.