The Senate committee urged the federal government to consider a rebate system as an alternative to tax waiver.
The Senate Committee on Finance has declared that the country lost about N17 trillion to tax waivers in the last five years.
The Chairperson of the Committee, Sani Musa, disclosed this on Monday during an interactive session with the management team of the Federal Inland Revenue Service (FIRS).
The administration of former President Muhammadu Buhari granted tax waivers to some corporate organisations.
During the budget defence last December, the Senate Committee on Appropriations asked the federal government to stop the tax waiver because it is reducing the revenue of the country.
At an interactive session on Monday, Mr Musa, the senator representing Niger East on the platform of the All Progressives Congress (APC), urged the federal government to consider a rebate system as an alternative to 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," the committee chairperson said.
The senator urged the FIRS management to increase its revenue projection for the year and consider a total stop to the waiver of tax to selected corporate organisations.
"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.
"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 yearly basis".
Nigeria's 62 tax categories
Responding, the chairperson of the FIRS, Zach Adedeji, assured that his team would collaborate with the committee set up by President Bola Tinubu to review the tax reforms and fiscal policy.
"President Bola Tinubu has seen the issue 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.
Sign up for free AllAfrica Newsletters
Get the latest in African news delivered straight to your inbox
"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, accounted for 97 per cent of the collection.
"So, the others are just constituting problems. However, because we run a federation and we have laws, anything that has to do with motor parks and road taxes among others, are under the purview of the state"
Why food prices are increasing
The FIRS Chair identified an increase in tax payments by transporters of food items as major a reason for the high cost of food across the country.
"We are already consulting and engaging the state government on it. We have also demonstrated to them that we want to move all those taxes, especially the ones that led to increased food prices, to the centre.
"There is a report that when food items are moved from the North, before it gets to the South, they pay more than 40 types of taxes.
"That is part of the reason food prices are increasing in Nigeria."
Mr Adedeji said many of the taxes paid by the transporters of food items are illegal.
He assured that his team will work effectively with the tax reforms committee of the federal government.
"The most unfortunate thing about this is that most of those taxes are not well coordinated and were not being accounted for.
"It is just creating problems for us so we are working through the joint tax board to make sure that we harmonise and let the states see that such tax is giving us problems.
"We are also awaiting the report of the Committee set up by the President to actually harmonise all the taxes.
"At the end of the day, we won't have more than eight or nine taxes that the state and federal government would be collecting."
