Finance bill: FG seeks NASS approval for N500bn crisis intervention fund

Federal Government is seeking National Assembly’s approval for the establishment of N500billion Crisis Intervention Fund as encapsulated in the proposed Finance Bill, 2020, which shall be provided in the Consolidated Revenue Fund and the Special Account.

According to the Finance Bill, as obtained by Tribune Online, “the Crisis Intervention Fund may be utilized for making funds available to meet expenditure as provided in the annual Appropriation act to meet any crisis-related expenditure or other such exigencies that may arise pursuant to section 12 of the Fiscal Responsibility Act (as amended) and section 306 of the 1999 Constitution (as amended).

It further seeks to amend section 44(1) and (2) of the 1999 Constitution with the view to establish by way of a trust fund, as a sub-fund of the crisis intervention fund, an Unclaimed Funds Trust Fund, into which unclaimed dividends of a public limited liability company quoted on the Nigerian Stock Exchange (NSE) and any unutilized amounts in a dormant bank account maintained in or by deposit money bank which has remained unclaimed or unutilized for a period of not less than six years from the date of declaring the dividend or domiciling the funds in bank accounts shall be transferred immediately to the Unclaimed Funds Trust Fund which shall be managed by Debt Management Office (DMO).

The bill, however, imposed a stiff penalty on any company or deposit money bank that fail to transfer the unclaimed dividends or unutilized amount in a dormant bank account to the Unclaimed Funds Trust Fund, to a fine of not less than five times, the value of the unclaimed dividends and unutilized funds, in addition to accumulated interest on the amount not transferred at the central bank of Nigeria’s monetary policy rate.

It, however, exempted official bank accounts owned by Federal, State and Local Governments as well as Ministries, Departments and Agencies (MDAs).

The provisions were contained in the proposed amendment of Section 39 of the Federal Inland Revenue Service (FIRS) Act, which was considered at the public hearing held at the instance of the House Committee on Finance, chaired by Hon. James Faleke, alongside other fiscal legislation, as contained in the Finance Bill, 2020.

The present administration also proposed 3-year imprisonment and/or both N1 million fine on any serving and former staff of Federal Inland Revenue Service (FIRS) or any agent who divulge or attempt to communicate taxpayer information to any person other than an authorized person to collect tax in the country.

In the same vein, Federal Government proposed for the upward review of 15% mobilisation to 30% to contractors in the extant Public Procurement Act, as well as the establishment of a general reserve fund by each MDAs in which one-fifth of its operating surplus for the fiscal year shall be allocated, provided that the cost-to-revenue ratio of each corporation shall not exceed 50 per cent or such other ratio as the Minister may publish for that particular corporation by way of the order published in the official gazette.

Similarly, Federal Government proposed amendment to section 12 of the fiscal responsibility Act, to empower the President to exceed the statutory 3 per cent deficit-to-gross domestic product threshold to fund the budget, in terms of designating situations where, due to the occurrence or imminent occurrence or conditions that may lead to the declaration of a state of emergency, such as a pandemic, as well as the provisions of sections 59 and 306 of the 1999 constitution (as amended).

While presenting his keynote address, the Speaker of the House of Representatives, Hon. Femi Gbajabiamila on Friday disclosed that the passage of the proposed Finance bill will determine the present administration’s ability to fund the 2021 budget and meet other socio-economic obligations.

Hon. Gbajabiamila who stated this during the public hearing on the Finance Bill, 2020 which passed through Second Reading on Thursday, reiterated the need to ensure that the views of the citizens yield good fruit and “not by narrow considerations of personal or group interests, but fealty to the best interests of the majority of our people and the pursuit of a more peaceful, prosperous and a more economically viable society for all.

“We must also remember that the proper operation of democracy requires that people be willing to listen to and hear each other out especially when they disagree. Let us remember also that whether or not people listen to what you have to say depends not only on the content of your message but also on the manner you choose to deliver it and following therefrom ensure that we observe decorum, and treat each other fairly in the manner of our contributions.”

He maintained that the proposed Finance, 2020 “will determine amongst other things, our ability as a nation to fund the 2021 budget, meet the obligations of government and implement policies to build infrastructure, address the problem of insecurity, grow the economy, and provide jobs that pay a living wage and lift families out of poverty.

“It is an important piece of legislation, deserving of thorough consideration, and reasoned debate by the parliament of the people, acting in the best interests of the people.

“We have a responsibility as legislators to meticulously review and examine every aspect of this Bill to ensure that we produce a legislative document that is clear in its objectives, thoughtful in the mandates it imposes and reflective of the best aspirations of all our citizens.”

On his part, Chairman, House Committee on Finance, Hon. James Faleke who stressed the need for Nigeria to think out of the box in order to turn around the prevailing negative economic narratives to a more positive one underscored the resolve of the three arms of government towards putting in place the necessary economic mechanisms to properly reposition the economy for effectiveness and efficiency.

He stressed that the proposed amendments seek to “revitalize the national economy, promote fiscal equity by mitigating instances of regressive taxation; reform domestic tax laws to align with global best practices, introduce tax incentives for investments in infrastructure and capital market, support small businesses in line with the ongoing ease of doing business reforms and raise revenue for the government by various fiscal measures.”

Hon. Faleke who reiterated the 9th Assembly’s commitment towards prioritizing the review of all federal tax laws to encourage investment; to incentivize enterprise; ensure fairness and curb tax avoidance and evasion through the use of ICT in tax collection and administration’, as well as attainment of substantive reduction in the percentage of and unemployed Nigerians, as encapsulated in the 9th House of Representatives Legislative Agenda.’

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