Senate Investigates Banks Over Withholding Tax Remittances

The Senate on Tuesday mandated its committee on Banking, Insurance and other Financial Institutions to investigate allegations of non-remittance of withholding taxes collected by banks to state governments.

The red chamber also asked the panel to ensure the recovery of all withholding tax revenues on both bank deposits and dividends.

It asked the committee to conclude its investigations within four weeks and report back to the senate.

The directive followed a motion on the digitisation/automation of collection and remittance of withholding tax on bank deposits and dividends payments for enhanced state governments’ Internally Generated Revenue.

The motion was sponsored by Senator Uche Ekwunife.

Ekwunife said that it had been discovered 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 and when due.

She noted that most state governments have been unable to pay salaries or meet their financial obligations as a result of poor and dwindling revenue;

The senator further noted with concern that billions of naira were being held by banks in Nigeria either in form of under remittance or non-remittance of withholding tax due to the government.

Ekwunife stressed the need for states to increase their internally generated revenues.

She 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 the revenue base of their states.