The revenue projection of the Federal Government N17.126trillion 2022 budget is set to suffer setback as certain Federal Government revenue generating agencies raised concern on Monday over legal and institutional hindrances of meeting target.
The Forum was the Senate leadership and its Finance Committee interactive session with some of the agencies.
The Comptroller General of Nigeria Customs Service ( NIS) , Col Hameed Ali ( Rtd) told the leadership of the Senate led by Senator Ahmad Lawan and the Finance Committee led by Senator Solomon Olamilekan Adeola that certain provisions of the 2022 Finance Act has since stripped the Customs of some of its statutory mandates.
Short of accusing the Federal Inland Revenue Services FIRS of usurpation of its functions, Hameed Ali specifically
cited section 22 and 61(a) of the Act of incapacitating Customs from collecting some taxes like import duties.
He said: “Mr President of the Senate, Distinguished Senators, I thank you for organising this interactive session on the need for improvement by all revenue generating agencies as far as internally generated revenues are concerned and funding of the 2022 budget are concerned.
“However, let me bring to the notice of this gathering that some provisions of the Finance Act 2022, are incapacitating Customs from such revenue drive.
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“Section 22 of the Finance Act 2022 seeks to amend the Federal Inland Revenue Service law Section 68 (1), (2), (3), (4) and (6) by allowing the Act to takes precedent over any other laws with regards to the administration of taxes, assessment, accounting, collection and enforcement of taxes and levies due to the Federal Government and the Federation of Nigeria.
“When the law was signed, it did not state clearly, the extent and scope of the taxes and levies in question. We are aware that the taxes and levies under the responsibilities of the FIRS are income tax, personal income tax, capital gain tax, VAT and so on.
“However, the amendment is so wide and open that we in the Nigerian Customs Service took it that it had hindered our ability to collect levies and other collections.
“Our understanding of the provisions is that all other laws which mandated us to collect are inconsistent with the new Act, then they are voided. This means that the law that mandates us to collect as revenue generating agencies, are voided completely. This means that we do not have the responsibilities to collect levies. If we don’t have the responsibilities to collect, what are we going to discuss here?
“We have consulted with lawyers and the conclusion is that the Act is confusing and if other revenue generating agencies decided to act on the provisions, they may decide not to collect duties and levies.”
The Director of Finance, Nigeria Immigration Service (NIS), Professor Aba George, spoke in similar vein as he informed the gathering that N400billion revenue target of the NIS is being undermined owing to the outsourcing of its services and operations to a United Kingdom based firm.
Professor George who did not mention the name of the foreign firm further revealed that the contract term gives federal government 33 per cent of proceeds, Immigration 7 per cent while the remaining 60 per cent is cornered by the firm .
“This is our 7th time of tabling this complaint before the Senate or the House of Representatives . Please rescue us from the hook of this firm.
“The contract was entered into without the knowledge of Immigration since 2003 and those behind it , keep on renewing it and denying us about N400billion revenue on yearly basis.
“It is a rip-off and purely one sided contract bleeding Immigration and Nigeria financially on yearly basis.”
Expressing his displeasure, President of the Senate instructed Chairman of his Committee on Finance, Senator Olamilekan Adeola, to summon the Ministry of Interior for all the contract documents.
“This is unacceptable . We cannot continue like this. We must see the end of this contract in the national interest.”
On complaints made by the Customs boss , Lawan said: “I wonder why the Ministry of Finance is not here because we need their intervention now. Their presence here would have provided some clarifications. We took it for granted that since it was an executive bill, that there were some engagements among the agencies of the Federal Government.
“We also called for public hearing so that we could ex- ray it. You are saying that you don’t have the legal mandate to collect taxes and it is a scary revelation.
“The Senate Committee on Finance and the Ministry of Finance and other agencies would look at the Act. If it is established beyond reasonable doubts that we need to amend it, we will do so without delay.
“It will be the fastest amendment because we need you to collect more monies for the Federal Government”
Making further clarification, Senator Adeola however said the section cited by the Customs boss , was not targeted at the agency .
“What necessitated that singular act was as a result of the issue between the Revenue Mobilisation and Fiscal Commission and the FIRS. There were clashes between them from time to time. Some activities of RMFAC were not in tandem with the Act that established it. “We discovered that the only way that we can make their roles explicit is through the Finance Act concerning the assessment and accounting of taxes.
“We discovered that RMFAC are going to agencies to audit their tax accounts which is not part of their responsibilities based on the law that established RMFAC.
“The only agencies saddled with that responsibility is the FIRS. That was what that law tends to address. We are ready to look into it again if other revenue generating agencies believe that it has hindered them from performing their responsibilities and we would amend it accordingly.”
Earlier in her own presentation, the Director General of National Agency for Food and Drug Administration Control ( NAFDAC), Professor Mojisola Adeyeye , lamented that the 2018, 2019 and 2020 budget of the agency were not passed by the National Assembly leading to warehousing of revenues generated by it for capital expenditure .
In his opening remarks, the President of the Senate has hinted of the resolve of the leadership of the National Assembly to increase the revenue target of the Federal Government revenue generating agencies to N3 trillion.
He said the purpose of the meeting was to explore means of increasing government revenues.
According to him, one of such ways is for the National Assembly to be rigid on increased revenue to cut down on the country’s budget deficit and borrowings, as well as prevent wasteful expenditures by agencies of government.
He assured that the upper chamber would provide the needed support through legislation to ensure that revenue agencies perform to meet and surpass their targets.
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