The Nigerian Senate has called for the probe of banks over an alleged non-remittance of withholding taxes collected by the financial institutions to government.
The Senate is said to have given a directive to its Committee on Banking, Insurance and other Financial Institutions to investigate the allegations within four weeks.
The committee was also tasked with the duty of recovering all withholding tax revenues on both bank deposits and dividends.
What you should know: This probe is coming after a motion was moved by Senator Uche Ekwunife for the digitisation/automation of collection and remittance of withholding tax on bank deposits and dividends payments for enhanced state governments’ Internally Generated Revenue.
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Ekwunife had alleged that the Central Security and Clearing System, and the banks in Nigeria did not remit withholding tax on bank deposits and dividends to state governments as at when due.
What this means: The alleged non-remittance of the taxes had hindered the state governments from paying salaries or meet their financial obligations as a result of poor and dwindling revenue, Ekwunife noted.
Speaking further, the legislator stressed the need for states to increase their internally generated revenues, which she said the fact that banks were holding billions of naira meant for the government was not encouraging. Ekwunife urged the banks to stop either the form of under-remittance or non-remittance of withholding tax due to the government.
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Ekwunife said it had become imperative giving the dwindling revenue from the federation account, which had left various state governments in Nigeria with the task of formulating strategies to improve their revenue bases.
Going forward, Ekwunife, suggested that the leakages with respect to remittance of Withholding Tax can be addressed using modern tax solutions and information technology.