Senate to Probe Non-remittance of Withholding Tax by Banks

0
Nigerian Senate

By Chuks Okocha and Deji Elumoye

The Senate Tuesday urged its Committee on Banking, Insurance and other Financial Institutions to investigate and ensure that all withholding tax revenues on both bank deposits and dividends are remitted to the appropriate organs of government.

Also, the Senate directed its Committees on Federal Character Commission and Inter Governmental Affairs to ensure road safety compliance in the country.

This was sequel to a motion by Senator Uche Lilian Ekwunife (Anambra Central), who said that it was discovered that the Central Security and Clearing System (CSCS) and banks in Nigeria do not remit withholding tax on bank deposit and dividend to state governments as and when due.

The Senate gave the committee four weeks to report back on the motion titled ‘Digitization/Automation of collection and remittance of withholding tax on bank deposits and dividend payments for enhanced state government internally generated revenue (lGR)’.

In her lead debate, Senator Ekwunife said that most state governments are unable to pay salaries and meet their financial obligations as a result of poor and dwindling revenue and that billions of naira are being held by banks in Nigeria either in form of under remittance or non-remitlance of withholding tax due to government.

The senator said that she is aware that the need for states to increase their IGR has become imperative given the dwindling revenue from the federation account which has left various state governments with the task of formulating strategies to improve the revenue base of their states.

Ekwunife said that one of the major sources of revenue for state governments is the withholding tax on bank deposits and dividends which has been difficult for the states to track, adding that the current practice is that both the banks and CSCS remit to state governments any amount it desires as it is difficult for the states to reconcile what amount should be credited to them.

She equally said that remittances without recourse to details is capable of and already eroding the revenue due to the state governments.

She explained that leakages with respect to remittance of withholding tax can be addressed using modern tax solutions and information technology. None of the senators spoke against the motion.

Meanwhile, the Senate has urged the Nigerian Police Force (NPF), the Federal Road Safety Commission (FRSC) and Vehicle Inspection Officers (VIO) to immediately clamp down on trucks and articulated vehicles plying Nigeria’s highways without the minimum prescribed levels of lighting or other road safety requirements.

The Senate also mandated its Committee on Federal Character and Inter Governmental Affairs to investigate the level of compliance on road safety legislations amongst haulage operators, owners and drivers as well as mandate the Committee on Federal Character and Inter Governmental Affairs to investigate the adoption and implementation of the
recommendations from the 2018 haulage Operators Stakeholders’ Summit, amongst all relevant stakeholders.