The Senate on Tuesday directed its Committee on Banking, Insurance and other Financial Institutions to investigate the alleged non-remittance of Withholding Tax to both Federal and State Government in the country by banks.
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The resolution of the upper chamber followed a motion titled: “Digitization/Automation of collection and remittance of Withholding Tax on bank deposits and dividends payments for enhanced State Government Internally Generated Revenue (lGR).”
The motion was sponsored by the Senator representing Anambra Central, Uche Ekwunife.
Ekwunife in her lead debate, noted that it has been discovered that the Central Security and Clearing System (CSCS) and Banks in Nigeria do not remit Withholding Tax on bank deposits and dividends to state Government as and when due.
She lamented that most states have been financially incapacitated and unable to pay salaries due to poor and dwindling revenue.
She insisted that billions of Naira is being held by Banks in Nigeria either in form of under remittance or non-remittance of Withholding tax due to Government.
She noted that there is urgent need for states to increase their internally generated revenue.
She said that the dwindling revenue from the federation account has “left various State Governments in Nigeria with the task of formulating strategies to improve the revenue base of their states.”
She urged her colleagues to be worried that a “major source of revenue for state governments is the Withholding Tax on bank deposits and dividends which has been difficult for the states to track.”
Ekwunife added: “The current practice is that both the Banks and the 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.
“Remittances without recourse to details is capable of and already eroding the revenue due to the state governments.”
She noted that the leakages with respect to remittance of Withholding Tax can be addressed using modern tax solutions and information technology.
She said that the upper chamber is eager in taking proactive measures to ensure that all Withholding Tax due to government is remitted for enhanced revenue.
She said that the revenue would help in “meeting the Federal Government’s drive and quest for increased and enhance internally generated revenue at all levels of government to meet the developmental needs of the nation.”
Senators in their contribution supported the motion.
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