Senate probes non-remittance of taxes on bank deposits

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The Senate is investigating the non-remittance of taxes on bank deposits and dividends payments to state governments.

Consequently, it has directed its Committees on Banking, Insurance and other Financial Institutions, and Finance to jointly undertake the probe.

Specifically, the Senate said it had discovered that the Central Security & Clearing System (CSCS) and banks in the country do not remit withholding tax on bank deposits and dividends to state government as and when due.

This situation, the Senate insisted, has dwindled the internally generated revenue (IGR) of states which has further made payment of salaries a burden.

The Senate further mandated its committees to ensure that all withholding tax revenues on both bank deposits and dividends are recovered.

Senate President, Ahmad Lawan charged the committees to report back to plenary within four weeks.

The resolution followed a motion by Senator Uche Ekwunife (PDP Anambra Central).

Titled “Digitalisation/automation of collection and remittance of withholding tax on bank deposits and dividends payments for enhanced state government internally generated revenue, IGR”, the motion seeks to end the non-remittance of the taxes.

Leading debate, Ekwunife emphasised the need for states to increase their IGR which has become imperative given the dwindling revenue from the Federation Account.

She said that “most state governments are unable to pay salaries and meet their financial obligations as a result of poor and dwindling revenue.”

According to her, “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.”

“The current practice is that both the banks and CSCS 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 stressed.

Ekwunife, however, said that the leakages with respect to remittance of withholding tax could be addressed using modern tax solutions and information technology.

She also stressed the need for proactive measures to ensure that all the withholding tax is remitted for enhanced revenue and in meeting the federal government’s drive and quest for increased IGR at all levels of government to meet the nation’s developmental needs.

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Samson Gbenga Salau [Editorial Board Adviser] Gbenga Samuel Salau is a professional journalist with over 17 years experience in journalism, he is a graduate of Communication and Language Arts, University of Ibadan. On completion of his youth service, he joined The Guardian as a freelance journalist and was later absorbed as a staff. While in the University, he was a campus journalist reporting for the Independence Hall and Faculty of Arts Press Clubs. As a campus journalist, he won the following awards; Independence Hall Press Best News writer; University of Ibadan Union of Campus Journalists’ Best News Reporter/Writer; First Runner-up, Reuben Abati Award for Investigative Journalism; Association of Faculty of Arts Students’ Press Best Reporter; University of Ibadan Union of Campus Journalists’ Best Political Writer; Winner, Reuben Abati Award for Investigative Journalism, and University of Ibadan Union of Campus Journalists’ Best Interviewer. He served the Association of Communication and Language Arts Students, as the Public Relation Officer, the same year he was appointed the News Editor of the Association of Faculty of Arts Students Press. The following session, he was made the General Editor, and a member of the 13-man University of Ibadan Students’ Union Transition Committee. As a reporter in The Guardian, in 2014, he won the Promasidor Quill Award Best Report on Nutrition and DAME Business Reporting category. In the 2015 edition of the Promasidor Quill Award, he won the best Report on Nutrition and Brand Advocate Categories, while in 2016, he won the NMMA Print Journalist of the Year, first runner-up Golden Pen Reporter of the Year and SERAs CSR Awards. Gbenga Salau loves traveling, reading, and listening to songs with good lyrics no matter the genre.

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