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Stamp Duty Non-remittance: RMAFC to probe banks over N100bn

The Revenue Mobilisation Allocation and Fiscal Commission plans to embark on a nationwide probe of banks over the non-remittance of stamp duties.

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Stamp duty non-remittance - RMAFC set to probe banks of over N100bn

The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has reportedly perfected plans to embark on a nationwide probe of banks over the non-remittance of stamp duties which is now in the tune of N100 billion.

According to a statement that was issued yesterday in Abuja by RMAFC spokesperson, Mr Ibrahim Mohammed, the probe would involve a forensic investigation of the funds that had so far been collected as stamp duty by 22 Deposit Money Banks (DMB) from 2000 to 2018.

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About Stamp duties

Stamp duties are statutory taxes levied on legal documents such as cheques, receipts, military commissions, licences and land transaction papers.

Few year back, banks operating in Nigeria were mandated to collect stamp duties from every account holder. While the deductible amount per bank account is small, it all adds up to billions and sometimes even trillions of naira.

Stamp duties are, therefore, part of the public revenue collectables and must be subject to the full conditions of disclosure.

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RMAFC has generated over N33 billion

RMAFC is the only constitutional body vested with the powers to monitor all revenue accruals into the Federation Account.

According to the commission spokesperson, the commercial banks had been deducting the sum of N50 on every deposit with a value of N1,000 and above since January 2000.

Meanwhile, Mr Mohammed reportedly disclosed that the commission had realised a total sum of N33 billion through the collection of stamp duties which falls far below the expectation of stakeholders.

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Earlier reports show N20 trillion unremitted Stamp Duty

At the end of 2018, concerns mounted over the non-remittance to the Federation Account of about N20 trillion generated from stamp duties in recent years.

The sum of N7.79 trillion was reportedly generated in 2015, with the total outstanding in the region of N20 trillion by the end of 2018.

According to detailed investigations by the International Centre for Investigative Reporting (ICIR) in 2018, complicit in this irregularity are key public institutions such as the Central Bank of Nigeria [CBN], Office of the Secretary to the Government of the Federation, Federal Inland Revenue Service [FIRS], Nigerian Interbank Settlement System [NIBSS] and Nigeria Postal Services, NIPOST.

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Forensic Auditors: RMAFC plans N100bn revenue recovery plan from banks

Furthermore, Mohammed indicated that the commission had concluded plans to engage the services of reputable forensic audit firms to carry out the probe aimed at recovering over N100 billion.

“It is expected that at the end of the exercise, over N100 billion would be recovered.”

Call to the Senate and FG, as RMAFC targets N500bn

In 2017, the Nigeria Senate mandated its committees on finance and banking, insurance, and other financial institutions to investigate alleged N7 trillion non-remittance of stamp duty revenue in the last five years.

The upper chamber reportedly stated it discovered that the Nigerian Inter-Bank Settlement System (NIBSS) was being accused of systemic diversion of huge revenue from stamp duty. Mohammed had, once again, called on the Nigerian Senate, saying the following”

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“The commission is using this medium to appeal to the National Assembly and the Federal Government to initiate measures for the amendment of the NIPOST Act to enable it to expand the economy and attract more revenue to the federation.”

According to Mohammed, if the Nigerian Postal Service (NIPOST), was properly repositioned through the appropriate legal and regulatory framework, and the introduction of appropriate technology, the agency could generate over N500 billion.

This is a step in the right direction, to budget deficit financing 

Nairametrics tried to consider the implication of this for the economy. Considering the breakdown of tax collected by the Federal Inland Revenue Service (FIRS), stamp duty constitutes one of the four components of the Non-oil Tax revenue.

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However, out of the target of N11.15bn target for Q4 2018, the tax agency only generated  N5.3bn, that is approximately 48% of the total target. This shows half of the revenue target from stamp collection is not met. Also, from the total tax collected in Q4, Stamp Duty recorded only a meager 0.37%.

Following DMO’s recent disclosure that the 2019 budget deficit will be funded by 88.7% borrowed fund, Nairametrics opined that tightening loose ends to improve Stamp Duty revenue will reduce the future budget deficit financing in Nigeria.

Patricia

Samuel is an Analyst with over 5 years experience. Connect with him via his twitter handle

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Hospitality & Travel

Passengers can now arrive 90 minutes before departure for domestic flights – FG

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international passengers, Coronavirus: FG enforces immediate screening of travellers at airports with new directive

The Federal Government has announced the reduction of arrival time for passengers from three hours to one hour and a half before departure for domestic flights.

This was disclosed in a tweet post by the Minister for Aviation, Hadi Sirika, through his Twitter handle on Monday, July 13, 2020.

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The minister said that the decision was arrived at after they have reviewed passenger facilitation at the airport while noting that passengers should check-in online.

In the tweet post, Sirika said, ‘’My colleagues and I have reviewed passenger facilitation at our airports, consequently I am happy to announce that, henceforth travellers are to arrive one hour and half before their departure time for domestic flights. Travellers are advised to check-in online, please.’’

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It can be recalled that the Federal Airports Authority of Nigeria (FAAN) had earlier in June issued flight resumption protocol for both international and local passengers across the country, advising passengers to arrive at the airport three hours before their time due to the new COVID-19 safety checks for domestic flight operations and five hours for international flight operations.

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Economy & Politics

Seyi Makinde Proposes N3 billion investment plan for water supply

The local governments in Oyo are advised to submit a list of 10 faulty boreholes in the LG. 

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Seyi Makinde Proposes N3 Billion plan for water supply

The Governor of Oyo State, Seyi Makinde announced the proposal of a N3 billion investment plan dedicated to water supply in rural and urban areas of the state.

Speaking through the Chairman of Rural Water Supply and Sanitation Agency (RUWASSA), Mr. Najeem Omirinde in Ibadan on Monday, he added that N500 million of the N3 billion would be used for repairing broken and faulty state-owned boreholes.

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All Chairmen of each of the Local Governments in Oyo are advised to submit a list of 10 faulty boreholes in the Local governments.

The Oyo State governor also ordered that all new boreholes must be compliant with solar-powered pumps, to enable their longevity and save costs.

Urging residents to patronize the agency if they need to dig up boreholes for water, citing that it would be cheaper if done through the state agency than with private drilling companies.

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Minister of Finance, Zainab Ahmed stated last year that Nigeria needs an estimated N36 trillion annually for the next 30 years to solve Nigeria’s infrastructure problem. The investment, although a tiny fraction of what Nigeria needs is a bold step by the Oyo State government.

 

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Economy & Politics

FG asks UK court for more time to appeal $9.6 billion arbitration judgement

Malami stated that the Evidence of P&ID’s highly orchestrated scam had only recently come to light. 

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FG asks UK court for more time to appeal $9.6 billion arbitration judgement

The Federal Government has approached a UK court to appeal for more time to appeal the $9.6 billion arbitration award against it over the breach of contract with Process & Industrial Development (P&ID) Ltd.

Nigeria has said that it needs more time to pursue its argument that the 2010 gas supply contract with Process & Industrial Development Ltd was a sham.

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The legal dispute with P&ID is coming against the backdrop of the huge drop in the country’s revenue due to the collapse in oil prices globally. Nigeria had applied to US courts in March seeking for documents from 10 banks which includes Citigroup Inc. and JPMorgan Chase & Co, in a bid to prove its corruption allegations.

P&ID, however, has denied any wrongdoing in the whole transaction, arguing that Nigeria missed its opportunity to appeal.

The Nigerian Lawyer, Mark Howard, on Monday, the first morning of a 2-day hearing, said ‘’It is very unusual in a fraud case to discover a single smoking gun. By its very nature, fraud is conducted in secret, which makes it hard to detect and justifies an extension.’

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READ MORE: The effect of the United States’ Shale Oil on Nigeria?

The legal representatives for Nigeria are seeking another hearing for the judge to decide whether any misconduct has taken place and whether it justifies overturning the contract

The Attorney General and Minister for Justice, Abubakar Malami in a statement said, ‘’Evidence of P&ID’s highly orchestrated scam had only recently come to light.’’

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It can be recalled that last year, a UK judge upheld an earlier arbitration award to P&ID, which had accumulated to about $9.6 billion. The arbitration decision was over a failed contract to build a gas processing plant in the Southern city of Calabar.

The Nigerian lawyers disclosed that they have uncovered alleged bribes to government officials and their family members dating back to 2009.

Malami in his court filing on March 24, submitted that ‘’There is good reason to believe that ministers at the highest level were involved in a corrupt scheme to steal money from Nigeria.’’

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