A bill seeking to amend the Federal Internal Revenue Service (FIRS) (Establishment) Act of 2022, on Tuesday, passed second reading in the Senate.
This followed the introduction of the main debate on the general principles of the bill by the sponsor, Yahaya Abdullahi (PDP-Kebbi North), during plenary.
Introducing the discussion, Mr. Abdullahi said that the bill was intended to amend the FIRS (Establishment) Act, No. 13, 2007.
He said the key objective of the amendment bill was to ensure a regulated and more organized process for granting corporate tax exemptions and import duty exemptions to investors and companies in the country.
Abdullahi said the bill was made necessary for two related reasons: drastic drops in government revenue and the consequent increase in deficit spending and high debt profile.
“Hence the need to block the leaks and gaps in the collection of taxes and remittances owed to the government.
“The other reason was the growing financial demand to finance equally growing government public expenditures, particularly our national budgets on public infrastructure, security and welfare commitments.
“It is important that Parliament is aware of the dire state of our current economic circumstances and the danger we face if we fail to tame the twin threats of deficit spending and high debt.
“On the surface, it is easy to say that Nigeria is in safe territory because our public debt of 23.6% of GDP is still within our threshold of 40% and 55% estimated by the IMF for economies of our size. .
“The devil in our case is that the debts are paid with revenue that the government derives from its GDP, which in our case is abysmally low (around 6-7 percent of GDP),” he said.
He said it had been widely reported that around N6 trillion in expected revenue was unavailable due to tax and import duty breaks.
“This clearly indicates the spectrum of difficult times ahead.”
In his remarks, Senate President Ahmad Lawan said some exemptions were unnecessary.
“Why should we grant waivers in trillions and then borrow money from somewhere? It doesn’t make sense,” she said.
Lawan subsequently referred the bill to the Senate Finance Committee for further legislative action, reporting back in four weeks.