The House of Representatives on Tuesday directed the Federal Inland Revenue Service (FIRS) to refund a total sum of N4.6 billion to FCT Internal Revenue Service (FCT-IRS) being two per cent over-deduction as cost of collection deducted from the N117 billion tax revenue realized between 2015 and 2019.
The Chairman, House Committee on Public Accounts, Hon. Wole Oke, issued the directive while ruling on the petition against FIRS adopted by the House.
According to the petitioner, FIRS deducted 4% of the total sum of N117 billion collected on behalf of FCT-IRS between 2015 and 2019 through the office of the Accountant General of the Federation (oAGF), against the agreed 2% as the cost of collection in the Memorandum of Understanding signed by both parties.
In his remarks, Hon. Oke argued that it was wrong for the FIRS to take part of the money belonging to the FCT-IRS in breach of the MoU signed by both parties.
According to him: “Our ruling will be that the Chairman of the FRIS should refund the 4 per cent taxes collected due to the FCT-IRS.
“That the Chairman, FCT-IRS, if you are still in need of the services of FRIS, due process should be followed and engage FIRS and pay them properly.”
Hon. Oke observed that the FCT-IRS was entitled to 5 per cent of the total tax revenue generated in accordance with the FCT-IRS establishment Act.
While responding to questions from the lawmakers, Chairman, FIRS, Mr Babatunde Fowler said that the FIRS took 2 per cent of the total tax collected as cost of collection rendered to FCT-IRS.
He explained that FIRS was responsible for the payment of salaries of 170 staff deployed on secondment to FCT-IRS throughout the period under review, apart from the accommodation and other logistics service rendered to FCT-IRS.
The FIRS chairman who argued that the agreement which started with 4 per cent was renegotiated to 2 per cent last year, said: “We support other States IRS but for FCT, we have given them buildings, logistics and staff, even this 2 per cent is not enough to cover the cost.
According to him: “We cannot continue to support them this way, I may be forced to pull out our all my staff and support which will have a negative impact on revenue generation in the FCT.”