Senate Probes Remittances of Taxes on Dividends, Bank Deposits

dividend tax

By Modupe Gbadeyanka

The Senate Committees on Banking, Insurance and other Financial Institutions and Finance have been mandated to look into how the withholding taxes generated from bank deposits and dividends payments are collected and remitted to the appropriate agencies in the country.

This followed a motion moved yesterday by Senator Uche Ekwunife on the Digitalisation/Automation of collection and remittance of withholding tax on bank deposits and dividends payments for enhanced state government Internally Generated Revenue (IGR).

During the debate on the matter at the plenary on Tuesday, the lawmaker said she would want the Senate to make efforts to recover these funds for the use of the country.

In Nigeria, when companies pay dividends to shareholders, 10 percent is charged as withholding tax and the remaining amount credited into the bank accounts of beneficiaries.

Senator Ekwunife said efforts should be made to recover these wasting revenues through the use of technology. She noted that in the first place, there should be a mechanism to track what is collected and remitted by the collecting bodies.

One of the contributors to the debate at the red chamber of the parliament yesterday, Senator Barau Jibrin, argued that, “It is a serious infraction on the part of those who are to remit the revenue but are not doing so.”

The lawmaker said, “The only way to ensure every kobo that are supposed to go into the coffers of the government is to embrace technology. It is a collective responsibility and we need to handle this matter as such.”

On his part, Lagos legislator, Senator Adeola Solomon fondly called Yayi, stressed that, “Only digitalization can give us the actual amount that can be generated from withholding tax.”

His Edo State counterpart, Mr Matthew Urhoghide, said, “I support this motion and want to thank Senator Ekwunife for bringing this motion before us. We should do what is necessary to get our revenue.”

In her submission, Ekiti State federal lawmaker, Senator Biodum Olujimi, said, “I wholeheartedly support this motion and ensure that something is done about it,” while Senator Ayo Akinyelure emphasised that, “Time has come for every state government to be effective in responsive tax collection.”

“The methodology of collecting tax has not been advanced enough. The digitalisation of tax collection will be the best way and if we believe it is time for this, digitalisation of withholding tax collection should come into place so that our revenue will be significantly improved,” the lawmaker added.

At the conclusion of deliberations, the Senate urged its committees to investigate the matter and ensure that all withholding tax revenues on both bank deposits and dividends are recovered.

It said the Committee on Banking, Insurance and other Financial Institutions to lead the probe and report back to the Senate in four weeks.

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

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