Senate rejects N12.43trn budget deficit, N6trn tax, import duties waivers

…Directs Customs to conduct downward review of proposed waivers by 50%

…Tasks FIRS to investigate  tax credit abuse by companies

By Uthman Salami

The Red Chamber of the National Assembly has rejected the proposed N12.4 trillion budget deficit, describing it as unacceptable.

The Senate Committee on Finance further kicked against the N6 trillion tax and import duties waivers proposed for the N19.76 trillion 2023 budget.

The Senate’s position was made known during the interface between the Committee 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).

After the Minister’s submission, the Committee Chairman, Senator Solomon Olamilekan (APC Lagos West), said before sending the proposals to the National Assembly for consideration and approval, the projected N12.43trillion budget deficit and N6trillion tax and import duty waivers should be critically reviewed downward.

The Senate further directed the Nigeria Customs Service (NCS), to carry out a downward review of the proposed waivers by 50 per cent and also tasked the Federal Inland Revenue Service (FIRS), to critically look into seeming abuse of tax credit by some companies.

The Committee Chairman, who specifically told 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, added that “the proposed N12.43trillion deficit for the 2023 budget and N6trillion waivers are very disturbing and must be critically reviewed.”

He further said, “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 tax credit window offered by FIRS to some companies.

“Billions and trillions of Naira can be generated by 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 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.”

The Minister had informed the committee that the proposed N19.76trillion 2023 budget will have 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.

On his part,  the Federal Inland Revenue Service Chairman, Muhammad Mamman Nami, explained said tax credit is an important innovation of government, explaining that it has yielded positive results from September 2019 when it was introduced through Executive order 007 by President Muhammadu Buhari.

He revealed that out of the N6.08trillion projected revenue from January to July 2022, FIRS generated N5.59trillion whilst promising that the N10.4trillion projected for the year will be achieved.

During his presentation, meanwhile, the Comptroller – General of Nigeria Custom Service (NCS), Col. Hammed Ali (Rtd) assured the committee of improved revenue generation in 2023 fiscal year, during his presentation.