.FIRS opposes fresh N2.7tr tax credit for road construction

The Senate Committee on Finance has flayed the N17 trillion loss by the country to tax waivers within the last five years.

It urged the Federal Inland Revenue Service (FIRS) to suspend the exercise and replace it with rebating system.

The upper legislative chamber’s objection came during the 2024 budget presentation of FIRS yesterday in Abuja.

This is even as Chairman of FIRS, Zacch Adedeji, who made projection of N19.4 trillion as targeted total tax collection for 2024, insisted that the fresh N2.7 trillion tax credit,  planned for road construction in the country by the Central Bank of Nigeria (CBN), should be discontinued.

In his remarks, chairman of the committee, Sani Musa (APC Niger East), told the FIRS boss: “Your projection of N19 trillion as total tax collection for 2024 is good when compared to the N11.16 trillion achieved in 2023, but the Senate believes you can do more even to the tune of N30 trillion if required measures are put in place.”

He continued: “As impressive and encouraging 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 on a yearly basis.

“Available records have shown that within the last five years, about N17 trillion have been lost by the country to tax waivers.
“It should be suspended and possibly substituted with rebating system.”

Adedeji, in his presentation, informed the panel that, “to save Nigerians from multiple taxation, FIRS, in collaboration with the committee set up by President Bola Tinubu, would reduce the 62 multiple taxes to eight.”

He added: “As of today in Nigeria, we have 62 types of taxes being collected. The sad news about that is that less than eight out of the entire 62 account for 97 per cent of the collection.

“We are already consulting and engaging the state governments on it. At the end of the day, we won’t have more than eight or nine taxes that the state and federal governments would be collecting.”

On the controversy trailing implementation of Tax Credit Scheme for road construction by CBN, the FIRS boss insisted that the N2.5 trillion earlier committed to it, should be fully implemented before thinking of any fresh one.

His words: “Regarding the tax credit, what I said was that the programme is laudable, but that the N2.5 trillion being spent on it by NNPCL should be exhausted before bringing a fresh request.”

“The N2.7 trillion fresh request should not be entertained because all NNPCL revenue should not be spent on roads when the Ministry of Works is there.”