The Senate yesterday passed for second reading a bill to amend the Federal Inland Revenue Service (FIRS) Act.
The proposed law aimed to regulate the processes of granting corporate tax holidays, import duty waivers and investment incentives to investors and businesses in Nigeria.
The bill was sponsored by Yahaya Abubakar Abdullahi (PDP, Kebbi North).
It seeks to among others, whittle down the powers of the federal government to unilaterally grant tax holidays and incentives to businesses.
It seeks create a new Section (9) in the FIRS Act to mandate the Service to secure due legislative approval of the National Assembly in granting of new or renewal of corporate tax incentives and waivers.
It stated that for purposes of transparency, efficiency, effective monitoring and fair play, all requests and applications for parliamentary approval shall be referred to the Senate and the House of Representatives for necessary scrutiny.
"Such requests and applications for parliamentary approval shall stipulate clear conditions and justification for granting tax waivers and investment incentives.
"All, or any other enactments specific to cases of granting investment incentives and tax waivers to businesses, institutions and individuals that conflict with the provision of this Act, shall be deemed, not applicable," he said.
Senator Abdullahi, in his lead debate, said the bill became imperative due to leakages and loopholes in tax collection and remittances to government amid revenue shortfalls and high debt profile.
He expressed worry that in the last five years, the country had not been able to achieve its revenue targets.
Figures from the Debt Management Office (DMO) showed that N3.9 trillion was realised out of the targeted revenue of N7.2 trillion in 2018.
In 2019, the target was N7 trillion while actual revenue collected was N4.12 trillion. The sum of N5.4 trillion revenue was targeted in 2020 but N3.9 trillion was received.
In 2021, the target was N6.4 trillion while N4.64 trillion was received.
In 2022, targeted revenue was put at N5.82 trillion while actual revenue received was N3.66 trillion.
The lawmaker expressed concern that debt service was consuming over 90 per cent of the government's revenues up from 32.7 per cent in 2015.
He said, "If this trend of relentless reliance on increasing public debt to finance the budget continues without corresponding rise in revenues, the country shall slide into distress and insolvency.
"With petroleum revenues dwindling into insignificance, we must rise to rationalise the system of tax administration by blocking loopholes, and tax evasion and ensure utmost efficiency in tax management.
"It is important to note that even while government explores other means of increasing its revenue streams and improve collecting capacity, the National Assembly must act with firmness and determination to ensure that we initiate and pass laws that regulate revenue streams collection and remittance.
"In early 2020, the FIRS reported a loss of N 1.3 trillion to tax waivers, in five years. And this was in just three sectors of the economy. Similarly, in October 2021, losses were put at $2.9 billion yearly, in tax waivers to multinationals.
"It is obvious that there are several other similar cases; and all this happening in the face of government increasing difficulties to fund its various development projects and welfare commitments across the country.
"The overall intendment of this Amendment Bill, therefore, is to ensure that government is able to pool all its collectibles in one coffer, to be able to target its allocations to those areas of priority in the country.
"An effective way to do this is to re-organise the processes of granting tax holidays, investment incentives and waivers to private individuals and corporate entities for effective coordination and transparency.
"We must also ensure that such applications are placed before the National Assembly, in order to ensure that all arms of the government are on the same page on this delicate matter."
The bill, after scaling second reading was referred to Senate Committee on Trade and Investment for further legislative works.
Meanwhile, the Senate yesterday demanded the involvement of the private sector and civil society organisations in the implementation of the National Social Investment Programme Agency, when established, for proper coordination.
The red chamber argued that the programme had not been effectively and efficiently implemented because the federal government has been solely managing the funds appropriated for the programme.
The upper chamber gave the verdict at plenary after it passed for second reading, a Bill to formally establish an agency got the SIP implementation.
The proposed legislation was titled: "A Bill for an Act to provide a legal and institutional framework for the establishment of the National Social Investment Programme for the assistance and employment of the poor and vulnerable in Nigeria; establish a National Social Investment Programme Agency for the purpose of managing the implementation of the programme and for related matters, 2022."
The executive bill was subjected to debate on the floor of the red chamber with the Leader of the Senate, Ibrahim Gobir, leading the discussion.
Lawmakers in their various contributions condemned the implementation of the SIP programme.
The Senate President, Ahmed Lawan commended all his colleagues and noted that there was no government since independence that has not address the issue of poverty.
Sign up for free AllAfrica Newsletters
Get the latest in African news delivered straight to your inbox
He said, "The bill is good because it was seeking improvement in the way the various programmes under the NSIP programme. We have picked many holes in the way the NSIP is currently being implemented.
"The bill is therefore an effort by the President Muhammadu Buhari administration to leave an enduring legacy behind for the Programme to be more efficient and transparent."
Minister of Humanitarian Affairs , Hajiya Sadiya Umar Farouq who appeared before the Senate Ad - hoc committee on uneven disbursement of N500billion Development fund by the Development Bank of Nigeria ( DBN), failed to provide required data or verifiable evidence of beneficiaries of the programmes.
During the interface, she said about 9.8million pupils nationwide were already benefiting from the School feeding programme on the rate of N100 per meal, aside from beneficiaries of other clusters of the programme.
But the Chairman of the Committee, Senator Sani Musa and other members like Ayo Akinyekure , Uche Ekwunife, Mathew Urhoghide, among others , told the Minister that her presentation and that of the Coordinator of the NSIP program, Dr. Umar Bindir , were beautiful on paper but lacked substance .
Consequently, the Committee directed her to furnish it with names of beneficiaries of different clusters of the program , their contact address , telephone numbers on the basis of states , local government and wards within the week.
