•Commission urges National Assembly to step down areas of conflict in proposed legislation
•Ahmed hints at introduction of new taxes
Adedayo Akinwale, Udora Orizu and Adedayo Adejobi in Abuja
There are indications that the Revenue Mobilisation and Fiscal Commission (RMAFC) and the Federal Inland Revenue Service (FIRS) are at loggerheads over certain areas in the Finance Bill 2021.
THISDAY learnt that the RMAFC believes the proposed legislation was skewed in favour of the FIRS, a development which may adversely affect the commission’s constitutional mandate.
Also, yesterday, the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, hinted that new taxes might be introduced in 2022, in line with the Finance Bill.
In a related development, Speaker of the House of Representatives, Hon. Femi Gbajabiamila said the 2021 Finance Bill was aimed at repositioning the financial system and to plug wastage.
The RMAFC, an agency of the federal government constitutionally empowered by paragraph 32(a-e) Part 1 to the Third Schedule of the 1999 constitution (as amended) among others, is empowered to monitor all revenue accruals to and disbursement of revenue into the federation account.
The Commission works for the three tiers of government, whilst it has 37 Commissioners, each representing a state and the Federal Capital Territory.
In a press statement signed by the Chairman, Public Affairs and Communications Committee of the Commission, Dr. Rilwan Hussein Abarshi, RMAFC said the proposed Finance Bill set for public hearing, if passed in its current state without proper amendments to some of the clauses would not bode well for the economy.
He said: “The proposed amendment to S.68(1-6) of the FIRS establishment Act and Section 4(1-3) of the Finance (Control and Management Act if passed; will infringe on the constitutional mandate of monitoring accrual into the Federation Account as well as revenue payable into the Consolidated Revenue Fund of the Federation from 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), the Federal Ministry of Finance (FMF and other revenue generating agencies.
“The Finance Bill will foreclose any form of checks and balances as envisaged by the 1999 constitution, whilst exposing government revenues to leakages as all under remittances or unremitted funds will not be checked by government agencies.
“It will cause inter-agency conflicts, unnecessary litigation and disservice to the nation just as the Commission will not be able to pay the engaged consultants after recovery and the engaged consultants may drag the Commission to courts,” Abarshi said.
He said the Finance Bill if passed in its current form, may lead to job cut as its employees and consultants would be thrown into the labour market.
“With so many employees and Consultants on the wage bill of the Commission for the third phase of the project which covers MDA’s and private companies; the monitoring duties of Commission’s staff, livelihoods of these Nigerians hang on the balance if this ludicrous bill sees the light of day,” he said.
Calling on National Assembly to address certain clauses and areas of conflict in the Finance Bill, Abarshi, urged the top hierarchy of National Assembly, including Senate President Ahmed Lawan, Gbajabiamila, Chairman of the Senate Committee on Finance, Senator Solomon Olamilekan Adeola and other members in both the upper and lower chambers to step down areas of conflict in the proposed legislation.
In the same vein, the Commission urged the intervention of the Presidency including the Minister of Justice and Attorney General of the Federation, Mallam Abubakar Malami (SAN), Minister of Finance, Hajia Zainab Ahmed on the matter in the interest of justice and equity.
Ahmed, hinted of plan to introduce new taxes during her presentation at a one-day public hearing on the 2021 Finance Bill organised by the House Committee on Finance.
She noted that the Finance Act 2020 marked a significant milestone, while also taking the country’s legislation in line with global best practices and increasing revenue for the government.
She explained that the Finance Bill 2021 which aims at supporting the 2022 fiscal year, had extensive consultation done in February and April on the bill.
She said the bill proposed to amend the Capital Gains Tax Act, Company Income Tax, FIRS Establishment Act, Personal Income Tax, Stamp Duties Act and Tertiary Education Act, Value Added Tax, Insurance Police Trust Fund and the Fiscal Responsibility Act.
In addition, according to her, it was also to amend the Police Trust Fund Act and the Nigerian Trust Fund Acts, to empower the FIRS to collect the Nigerian trust fund levies on companies on behalf of the fund itself.
She said Nigeria must diversify its revenues from oil to fund critical expenditures, stressing that as of September 2021, the federal government’s retained revenue was N4.56 trillion, achieving 75 per cent of the budget.
The minister said the federal share of oil revenue was N845 billion, representing 56.3 per cent pro-rated performance.
She also said the federal share of non-oil revenue was N1.31 trillion, which was 117.3 per cent above its budget.
She pointed out that Companies Income Tax (CIT) and Value Added Tax (VAT) collections were N616 billion and N274.4 billion representing 121 per cent and 153 per cent, respectively, of the pro-rata targets.
Ahmed further said Customs’ collections were N418.97 billion.
While noting that these issues may require modest increases in taxes and tariffs on certain businesses, sectors, industries and individuals over the medium term, she assured that the current administration remained committed to continuous dialogue and engagement with all stakeholders and interest groups particularly, the National Assembly.
According to her, “Clearly, our ongoing fiscal reforms of the last six years are yielding tangible results. However, the Federal Ministry of Finance Budget and National Planning is closely studying the following issues, developments and policies: Legal developments and pronouncement of the Courts on VAT vs. States Sales Taxes Cases.
“Current fiscal policy stance to let tax incentives with sunset provisions to naturally expire and not to automatically renew such incentives without a detailed Tax Expenditure Cost / Benefit Evaluation of the relative success of the Incentives before extending Incentives further Acceleration of Projected Increase Tariff and Excise Duties (so called “sin classes”) on tobacco, alcohol & carbonated drinks to fund vital expenditure on Health, Education and Security.
“Wholesale reform of antiquated stamp duties and Capital Gains Tax Regime. Possibility of introduction of new taxes, tariffs and levies, as the economy recovers.
“We prepared this draft bill along five reform areas, the first domestic revenue mobilisation, the second is tax administration and legislative drafting, third is International taxation, fourth is financial sector reforms and tax equity and fifth is improving public financial management reform. The provision in the draft bill is proposing to amend the Capital Gains Tax Act, Company Income Tax, FIRS Establishment Act, Personal Income Tax, Stamp Duties Act and Tertiary Education Act, Value Added Tax, Insurance Police Trust Fund and the Fiscal Responsibility Act.
“This is to amend the Police Trust Fund Act and the Nigerian Trust Fund Acts, the purpose is to empower the FIRS to collect the Nigerian trust fund levies on companies on behalf of the fund itself.
“Currently, because there is no such provision, the FIRS is unable to start collecting on behalf of the fund. Also, it is to streamline the tax and the levy collection from the Nigerian companies in line with Mr. President’s administration ease of doing business policy.
“So we do not have NASENI going out to collect that tax, the FIRS will collect on their behalf during their collection process and it will be passed through to them.”
Declaring the hearing open, the Speaker, Gbajabiamila said the essence of the 2021 Finance Bill was to further reposition the country’s finance system in order to plug wastages, address corruption, as well as stimulate stability and growth in productive sectors.
He said the meeting was designed to give Nigerians and critical stakeholders in the industry the ample opportunity to own and drive the process.
Gbajabiamila also said the Bill also seeks to introduce strategic and broadminded positive reforms that would engender best practices, statutorily check borrowing by local, states and federal governments.
