Nigerian Senate to investigate banks on revenue remittances

* Says CSCS, banks don’t remit WHT on deposits, dividends to states

Isola Moses | ConsumerConnect

The Nigerian Senate may have become more determined to intensify efforts at ensuring that probity and financial responsibility become the norm in public procurement and accounting process in the nation’s economy.

Subsequently, the Senate as the Upper Legislative chamber of the National Assembly (NASS) has mandated its Committees on Banking, Insurance and Financial Institutions, to investigate Withholding Tax (WHT) revenues on both banks’ deposits and dividends.

It also urged banks and Central Security and Clearing System (CSCS) to work with various government agencies and stakeholders to ensure that collection and remittance of Withholding Tax to the Federal Government are done, using modern automated tax and information technology (IT) solutions.

Ezrel Tabiowo, Special Assistant (Press) to Senate President Ahmed Lawan, in statement, said these were some of the resolutions reached Tuesday, February 25, by the Senate during plenary, and after consideration of a motion sponsored by Senate Uche Ekwunife (Anambra Central).

In her presentation, Senator Ekwunife disclosed that “Central Security and Clearing System (CSCS) and Banks in Nigeria do not remit Withholding Tax on deposit and dividend to state governments as and when due.”

Most state governments are unable to pay salaries and meet their financial obligations as a result of poor and dwindling revenue, she noted.

Ekwunife as well raised concerns that “billions of Naira are being held by banks in Nigeria either in form of under-remittances or non-remittance of Withholding Tax due to government.”

“The need for states to increase their Internally Generated Revenue (IGR) has become imperative, given the dwindling revenue from the Federation Accounts which has left various state governments in Nigeria with the task of formulating strategies to improve the revenue base of their states,” Ekwunife added.

She further expressed concern 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 states to track.

“The current practice is that both the banks and Central Security Clearing System remit to state governments any amount they desire as it is difficult for the states to reconcile what amounts should be credited to them,” she said.

The Senator, however, opined that the leakages with respect to remittance of Withholding Tax can be addressed using modern tax solutions and information technology.

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