ABUJA, NOVEMBER 9, 2017 – The House of Representatives on Wednesday resolved to investigate the N115bn tax liabilities allegedly owed by Federal Government Ministries, Departments and Agencies.
The House also noted that many commercial banks defaulted in making remittances of Withholding Tax and Value Added Tax that they collected on behalf of the Federal Inland Revenue Service.
The lawmakers said non-remittance of taxes had negative implications for revenue generation and the country’s economy.
The motion calling for the probe was moved by a member from Rivers State, Mr. Jerome Amadi.
The lawmaker argued that a government desperately in search of revenue to fund a deficit budget could not afford to leave N115bn as unremitted taxes.
He stated, “The recent allegation by the Revenue Mobilisation Allocation and Fiscal Commission that some MDAs are owing the Federal Government N115bn is such a serious issue that should not be allowed to be swept under the carpet, especially now that those funds could have either been mismanaged or squandered by those agencies.”
Amadi also recalled how the acting Chairman of RMAFC, Mr. Kabir Mashi, was quoted on September 3 as saying that many banks that collected Withholding Tax and VAT on behalf of the FIRS refused to transfer the money to the tax agency.
The House, presided over by the Deputy Speaker, Mr. Yussuff Lasun, directed its Committees on Finance and Public Accounts to investigate the matter.
Specifically, the committees were asked to determine the amount outstanding against each MDA and “how long the amount has been withheld and make recommendations on how to prevent a re-occurrence of this illegality.”
The House passed a second motion that was also related to revenue collection. It raised the frequent abuses of the Pre-Arrival Assessment Reports on imported goods issued by the Nigeria Customs Service to importers.
It alleged that importers “compromise” the reports and this in turn leads to the under-payment of duties in billions of naira.
The Chairman, House Committee on Customs/Excise, Mr. James Faleke, and 14 other lawmakers, who moved the motion, further informed the House that import duty waivers were also abused. They stated that “waivers were used to import goods not listed on the approval, thereby depriving the government of the needed revenue.”
The motion gave more details, stating, “The House is also aware that some importers, most times, issue bank and/or insurance bonds to Nigeria Customs Service in lieu of duty payments to enable them to clear the imported goods immediately and thereafter expected to redeem the bonds by paying the appropriate duty rates, but information reveals that the bonds are either partially redeemed or never redeemed at all.
“The House is further aware that the inability of the Federal Government to finance the 2017 budget and meet its other obligations, which made the Ministry of Finance to source for funds from local banks and the capital market through ‘sukuk’ etc., meanwhile there are leakages in revenue collection by the NCS.
“If those leakages are blocked and the perpetrators punished, Nigeria’s revenue base will increase and there may not be any need to source for funds of any type to fund infrastructural development in the country.”
The lawmakers later passed a resolution directing the House Committee on Customs/Excise to conduct an investigation and report on three issues. They are to “determine the nature and extent of abuse of the PAAR by importers and officials of the Customs service in order to recover the revenues due to the government but were not paid.
“Investigate the abuse of import duty waivers granted by the Federal Ministry of Finance and its effects on the economy.
“Identify the companies or individuals that have refused to redeem the bonds even after clearing their imports, and report back in 90 days for further legislative action.”