The Senate has called on the Federal Government to stop giving tax breaks and concessions to corporate entities, saying the country is losing huge revenue to such practices.

According to a report by Vanguard, the lawmakers said all companies should pay their taxes in full to the government coffers and then request for a rebate, if need be.

The Senate Committee on Appropriations made the call during an interactive session on the 2024 budget with the Finance Minister, Wale Edun, and his counterpart from the Budget and Economic Planning Ministry, Atiku Bagudu.

Tax Credits vs Withholding Taxes

The committee suggested that the government should adopt the system of withholding taxes for tax waivers, as done in other countries.

Withholding taxes are taxes that are deducted from the income of individuals or businesses and paid to the government. The taxpayers can then claim a refund or a credit if they have overpaid or are eligible for any deductions.

The committee said this would ensure that all taxes are paid to the Consolidated Revenue Fund of the Federal Government, and then corporate entities can apply for rebates after proving that they have complied with the tax laws.

Fiscal Policy and Tax Reform

The Finance Minister, Wale Edun, said the government was working on a fiscal policy and tax reform committee that would look into the issue of tax waivers and incentives.

He said the committee would consider the practicality and feasibility of moving to a rebate system rather than granting tax waivers and concessions up-front.

He also stated that the committee would look into the issue of interest incentives, where some businesses are given concessional interest rates on loans. Such businesses should pay the normal interest rate and then get a rebate later.

The committee would take the advice of the Senate as an important input into its work.

Bold Move by the President

The Senate also commended the President for his bold move to end the fuel subsidy regime, which had been a source of corruption and wastage of public funds.

The President had announced in his speech that there would be no more fuel subsidy in the country, and that the government would use the saved funds to invest in infrastructure, health, education, and social welfare.

The Senate said this was a courageous and patriotic decision that would benefit the nation in the long run.

They assured the President of its support and cooperation in implementing the 2024 budget and other policies that would enhance the economic growth and development of the country.