October 2, 2022

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Senate rejects N6trn tax, import duties waivers in 2023 proposed budget

Senate rejects N6trn tax, import duties waivers in 2023 proposed budget

 …. urges Customs to review waiver by 50%

The Senate on Tuesday rejected the N6trillion tax and import duties waivers proposed for the N19.76trillion 2023 budget with attendant deficit of N12.4trillion.

This is just as the Senate urged the Nigeria Customs Service (NCS) to as a matter of urgency carry out a downward review of the proposed waivers by 50% and also tasked the Federal Inland Revenue Service (FIRS), to critically look into seeming abuse of tax credit by some companies.

The resolutions of the Senate were sequel to the interface between the Senator Olamilekan Adeola, APC, Lagos West Committee on Finance and the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed as well as heads of revenue generating agencies in the country on proposed 2023 – 2025   Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).

At the meeting, the finance minister informed the committee that the proposed N19.76trillion 2023 budget will have a deficit of N12.43trillion as a result of projected N6trillion tax and import duty waivers and fuel subsidy of over N6trillion as well if retained for the whole year.

Worried by the submission, Senator Adeola told the Minister that both the projected N12.43trillion budget deficit and N6trillion tax and import duty waivers should be critically reviewed downward before sending the proposals to the National Assembly for consideration and approval.

The Committee Chairman who asked the Minister to look into the list of beneficiaries of the waivers for required downward review to N3trillion with attendant reduction of N12.43trillion deficit figure, said, “The proposed N12.43trillion deficit for the 2023 budget and N6trillion waivers are very disturbing and must be critically reviewed.

“Many of the beneficiaries of the waivers are not ploughing accrued gains made into expected projects as far as infrastructural developments are concerned. The same goes for the tax credit window offered by FIRS to some companies.

“Billions and trillions of Naira can be generated by the government as revenue if such windows are closed against beneficiaries abusing them and invariably provide required money for budget funding with less deficit cum borrowings.

“The Nigeria Customs Service should help in this direction by critically reviewing waivers being granted on import duties for some importers just as the FIRS should also review the tax credit window offered to some companies without corresponding corporate social services to Nigerians in terms of expected project executions like road construction.

“Generally, the issue of waivers should be taken strongly by relevant authorities because Nigeria does not have the capacity for now. We cannot accommodate this N6trillion tax waivers.”

On his part, the   FIRS Chairman, Muhammad Mamman Nami who told the committee that tax credit is an important innovation of government which has yielded positive results from September 2019 when it was introduced through Executive order 007 by President Muhamnadu Buhari, urged the Senate not to move in the direction of scrapping it as it is only given to companies with evidence of projects execution.

He informed the committee that out of the N6.08trillion projected revenue from January to July 2022, FIRS generated N5.59trillion and assured that the N10.4trillion projected for the year would be achieved.

Also speaking, the Comptroller – General of Customs, Col. Hammed Ali (Rtd), also assured the committee of improved revenue generation in 2023 fiscal year.

The interface will continue today with expected appearances of the Governor of the Central Bank, Godwin Emefiele and Group Managing Director of Nigerian National Petroleum Corporation Limited (NNPCL) Mele Kyari before the Committee.