With the unprecedented rather hasty passage of the finance bill on the 21st Dec 2021, more questions have been brought to the fore on certain ouster clauses which are not in the national interest of Nigeria, Adedayo Adejobi writes…..
When the Chairman of the Joint Committee on Finance; Customs, Excise, and Tariff; Trade and Investment, Sen. Solomon Adeola (APC-Lagos), on Tuesday, Dec 21, hastily passed the Finance Bill 2021, sponsored by Senate Leader, Yahaya Abdullahi (APC-Kebbi), a total of 39 clauses with emphasis on S.68 (1-6) of FIRS Establishment Act, S.89 of Stamp duty Act and S.4 of Finance, management and Control Act; have been thrown up for review, due to its ouster nature.
The 2021 Appropriations Act (Amendment) Bill seeks to extend the implementation of the Capital aspect of the Appropriation Act 2021 from December 31, 2021, to March 31, 2022.
According to him, He said the bill seeks to promote fiscal equity, align domestic tax laws with global best practices, introduce tax incentives for infrastructure and capital markets, support small businesses and promote increase government revenue.
“The Finance Act 2020 was predicated essentially on having no new taxes and no new incentives due to the COVID-19’s impact on the economy as such it was structured across four broad thematic areas.
“Enacting counter-cyclical measures and crisis intervention initiatives; Tax, fiscal responsibility, and public procurement reforms; Reforming fiscal incentives policies for job creation; Ensuring closer coordination of monetary, trade and fiscal policies; and Enhancing tax administration,” Adeola said.
It sought more powers for the Federal Inland Revenue Service (FIRS) to collect NPTF levies on Nigerian Companies on behalf of the fund and to streamline tax levy collection from Nigerian Companies.
The committee also emphasised the need for the Federal Government to ensure that FIRS deploys both proprietary and third-party technical applications to collect information from taxpayers, enhance confidentiality and non-disclosure, and enable them to investigate tax evasion and other crimes and sanction non-compliant taxpayers.
It urged the government to mandate FIRS as Principal Tax Revenue Collection Agency to collaborate with other law enforcement MDAs in streamlining Tax Collections by enhancing Public Financial Management reforms.
Contrary to the above claims, the Chairman, Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Chairman, Engineer Elias Mbam, has declared the Amendment to S68 (1-6), Sec 4 of the Finance and Management Control Act Unconstitutional; Urging the leadership of the National Assembly to Restructure Finance Bill, Expunge Stamp Duty Act.
The basis for RMAFC’s call to structurally and critically review certain ouster clauses, and restructure the all-important document, as the Federal Inland Revenue Service (FIRS), the supervisory Ministry of Finance, presently infringes on the constitutional provisions of Revenue Mobilisation and Fiscal Commission (RMAFC).
RMAFC is a Federal Government agency constitutionally empowered by paragraph 32 (a-e) parts 1 to the Third Schedule of the 1999 constitution (as amended) among others; to monitor all revenue accruals to and disbursement of revenue into the Federation Account.
While the FIRS is saddled with the responsibility of collection of tax revenues on behalf of the federal government.
According to the Chairman, he said, ‘’ S.68(1-6) in the Finance Bill, are in conflict with paragraph 32(a) part 1 to the third schedule of 1999 constitution as amended which empowers the Commission to monitor accruals to and disbursement from the Federation Account. These amendments which infringe the above-mentioned section are ab initio null and void. The basic fact is that FIRS activities should be monitored for the benefit of the three tiers of Government. The monitoring duty is to check and ensure that all revenue due to the Government is fully remitted to the Government Coffer. If FIRS carries out its collection duty and the RMAFC discovers under remittance, the Commission will recover such money to the Federation Account. Any law or enactment limiting the powers of RMAFC to monitor revenue Generating Agencies of Government (FIRS) inclusive should be expunged from the proposed bill because it is in conflict with S.162 (1) & para 32 (a) of the third schedule to the 1999 constitution as amended.’’
‘’Going by the definition of the monitor by Justice Niki Tobi, the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) in carrying out the monitoring function, is expected to check, audit, investigate, and police. In doing that, the Commission carries out enforcement and compliance to block revenue leakages. So far, from the checks and verification, the Commission has discovered grossly under-remitted and/or unremitted revenue after FIRS has carried out an audit on the companies and MDA’s, and has recovered over N300bn to the government coffers.’’, Mbam enthused.
In startling revelations, the Commission said, ‘‘The Commission knows that trillions of naira are still in the hands of public and private entities after FIRS has checked them and given a clean bill of health. In an attempt to stop another government agency to carry out checks and balances on revenue-generating agencies, especially FIRS, the government will suffer a colossal revenue leakage in the nation. This is the main reason, FIRS doesn’t want to be monitored’’
When THISDAY reached out to Mr Abdullahi Ahmad, Director, Communications and Liaison Department of the FIRS, as at Press time, he was available for comments.
In clarifying the mandate of the FIRS, the Commission Chairman posited that’’ FIRS is already empowered to assess, collect and account. But asking for an additional exclusive power of enforcement and compliance, to foreclose other government agencies, including RMAFC and the National Assembly from carrying out their constitutional power, is illegal and unconstitutional.’’
Even though the Bill has been hastily passed in what appears a sinister move, the Chairman, Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Chairman, Engineer Elias Mbam, therefore, called on National Assembly to expunge the sections or restructure them so that it would not infringe on the constitutional mandate of the Commission.
‘’In as much as that is not done, the implementation would be difficult.’’ Because Act is null and void abinio, he said.
Emphasising the need for RMAFC not to extend its monitoring activities to Consolidated Revenue Funds of the Federation by the Hon. Minister of Finance is out of place according to RMAFC. The RMAFC argued that what the Hon. Minister of Finance described as operating surplus is the Revenue mentioned in S.162 (10) to be monitored by RMAFC. The revenue generated by NNPC, NPA, NIMASA, NCC, and others using National assets cannot be described as operating surplus’, The Agencies in question do not receive subvention from Government rather spend 20% of the revenue generated using National Assets and remit the balance to the Government ’’ The word ‘operating surplus’ is not known to the constitution, hence it is unconstitutional and we are not bothered about it. There is nothing like operating surplus in the constitution. We are monitoring the revenue as contained in the constitution.’’ the Commission said.
Referencing the Amendment of the Stamp Duty Act as contained in the prayers of the Commission, the Chairman said, ‘‘S89 (3) of the proposed Stamp Duty Amendment Act is in conflict with para 32(a) to Part 1 of the third schedule of 1999 constitution which empowers the Commission to monitor accruals to and disbursement from the Federation Account. Stamp duty is one of the line revenues of the Federation Account. The constitution empowers the Commission to generate indices, allocate and disburse revenue from Federation Account. The amendment in the Finance bill which will now empower the Minister of Finance to disburse stamp duty, is in conflict with the constitutional mandate of the Commission.’’, Engineer Mbam said.
The Chairman has asked the National Assembly to expunge the section.
“Section 4 of the Finance (Control and Management) Act is amended by substituting for the existing subsection (1), a new subsection (1); “(1) Every Ministry, Department, Agency, official or other persons concerned in or responsible for the collection, receipt, custody, issue or payment of public money, stores, stamps, investments, securities, or negotiable instruments, whether the property of Government or on deposit with or entrusted to Government or any public officer in his official capacity either alone or jointly with any public officer or any other person, shall comply with all rules, regulations, guidelines and other instructions that may, from time to time, be issued by or under the direction of the Minister responsible for Finance in respect to the custody and handling of the same and accounting, therefore”.
The Chairman further said, ‘‘the amendment of the section seeking for more powers for Minister of Finance, to regulate or provide a guide from time to time on how government Agencies including RMAFC should carry out its monitoring the public revenue mentioned in Sec 162(10) of 1999 constitution as amended is unconstitutional.
‘’Meanwhile, source revenues are the revenues generated to the government using national assets held in trust on behalf of the three tiers of government. Therefore, since the revenue mentioned in Sec 162(10) of the 1999 constitution as amended, it is the sole duty of RMAFC to monitor source revenue to the government. The unspent budget of Federal MDA’s under the budget of the Federal Government can be remitted to the Consolidated Revenue Fund under the supervision of the Minister of Finance. But the Finance Minister is seeking additional powers in Finance Bill, extending to regulate how RMAFC monitor the revenue under Sec 162(10) of 199 constitutions as amended, by the Nigerian National Petroleum Corporation ( NNPC), Nigerian Customs Service (NCS), The Board of Federal Inland Revenue Service (FIRS), Central Bank of Nigeria (CBN), Nigerian Ports Authority (NPA), Nigerian Maritime Administration and Safety Agency, (NIMASA), Nigerian Communications Commission (NCC) and Department for Petroleum Resources (DPR)- is unconstitutional.
From all indications, RMAFC is not constitutionally designed to seek approval from FIRS before carrying out its constitutional monitoring mandate.
With the Customs, FIRS, and RMAFC at loggerheads over varying degrees of ouster clauses, would the National Assembly halt the deployment of the Finance Bill, or would it restructure same in a way that it will not give unnecessary powers to some MDA’s in a way that will infringe the constitutional and statutory mandate of the Commission.? these and many more questions beg answers the financial year begins in full swing.