From Kenneth Udeh, Abuja
A Bill seeking to ensure a regulated and more organised process of granting corporate tax holidays, import duty waivers and investment incentives to deserving investors and businesses in the country has passed through first reading at the Senate.
The bill which is being reintroduced for the third time at the Senate is sponsored by Senator Abdullahi Yahaya Abubakar (Kebbi North) and it is titled “Federal Inland Revenue Service Act (Amendment) Bill, 2023 (SB. 253).
The Bill which seeks to amend the FIRS Act was first brought to the Senate during the 8th Senate for consideration. In the 9th Senate, it also progressed to the committee level, after the second reading, but further legislative attention ran out of time.
Explaining the importance of the Bill, the Kebbi North Lawmaker in his draft Copy stressed that it will address the shortfalls in government revenues, the consequent rise in deficit spending, and the high debt profile of Nigeria.
At the Senate’s sitting on Wednesday Leader of the Senate, Senator Opeyemi Bamidele reintroduced the Bill to the Senate afterwards Clerk of the Senate Chinedu Akubueze read the short title of the bill after which it was adopted by the Senate President Godswill Akpabio.
As stated in the explanatory Memorandum of the bill there is a dire need to block leakages and loopholes in tax collection and remittances to the government.
Another importance of the bill given by Abdullahi was because of the mounting financial demands to fund ever increasing government public expenditures, particularly our national budgets on public infrastructure, security and welfare commitments.
A statistical breakdown provided the Lawmaker to back the proposed FIRS Act Amendment is Nigeria’s public debt which currently stands at N87.4 trillion. When Amended the FIRS Act will solve the problem of bad debt servicing which in Nigeria’s case are serviced with revenues government derives from its GDP, which is abysmally low, (about 6-7% of the GDP, compared with 30-35% OECD; 19% for USA, and about 18% average for ECOWAS nations).
The explanatory Memorandum of the bill also stated that the Debt Management Office in its latest figures reported a debt service to revenue ratio of 73.4%, leaving meager 26.6% for recurrent and capital expenditure.
Abdullahi maintained that the policy of granting corporate tax waivers and related investment incentives to businesses and individuals is one tool that successive Nigerian governments have often used in order to facilitate rapid inflow of Foreign Direct Investment (FDI). He added that it was designed as an instrument that could channel local and FDIs into strategic areas that require attention in order to boost national economic growth and inclusive development.