The House of Representatives on resumption from its two-month annual recess is expected to commence debate on the general principles of a bill which seeks to establish Tertiary Hospital Development Tax Fund in Nigeria.
The private member bill, sponsored by Hon. Ogunlola Olubunmi, which scaled through First Reading before the annual recess, has been gazetted for Second Reading.
According to the proposed bill seen by Tribune Online, Clause 1(2) provides that: “the tax at the rate of one per cent shall be charged on the assessable profit of a company registered in Nigeria.”
Clause 1(3) further provides that the assessable profit of a company shall be ascertained in the manner specified in the Companies Income Tax Act or the Petroleum Profits Tax Act as the case may be.
Clause 1(4) however states that: “Without prejudice to the provision if subclause (3) of this clause, section 60 of the Petroleum Profits Tax Act shall not apply to the assessment, collection and payment of tertiary hospitals development and all Companies chargeable to tax under the Petroleum Profits Tax Act shall be liable to pay the full extent of the tax imposed under this bill.”
For ease of collection, Clause 2 empowers the Federal Inland Revenue Service (FIRS) to “assess and collect from a company the tax imposed by this bill.”
According to the opponent of the bill in Clause 2(2), the tax imposed shall be due and payable within 60 days after the Service has served notice of the assessment on a company.
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Clause 3(1) stipulates that the Fund shall be for development, provision, upgrade, maintenance of infrastructure, facilities and equipment and personnel training in Tertiary hospitals in Nigeria which shall be managed by the Board of Trustees established under Clause 4 of the bill.
Clause 6(1) empowers the Board of Trustees to monitor and ensure collection of the tax by FIRS and ensure the transfer of same to the coffee of the Fund; manage and disburse the accrued revenue; liaise with the appropriate ministries or bodies responsible for the collection or safekeeping of the tax; receive requests and approve admittable projects after due consideration as well as ensure disbursement of funds to various public Federal and state tertiary hospitals in Nigeria.
Section 6(2a-j) further empowers the Board of Trustees to: administer, manage and disburse the tax imposed on the basis of funding of all Federal and state tertiary hospital with counterpart funding of 40% from beneficiary State Governments; equality among the 6 geopolitical zones of the Federation in case of special intervention and regular intervention; monitor and evaluate the execution of projects; invest funds in appropriate and safe securities; update Federal Government on its activities and progress through annual and audited reports and review progress and suggest an improvement.
The Board is also empowered to do such other things as are necessary or incidental to the objects of the Fund or as may be assigned by the Federal Government; make and issue guidelines from time to time to all beneficiaries on disbursement from the Fund on the use of monies received from the Fund; and generally regulate the administration, application and disbursement of monies from the Fund under this bill.
In order to ensure compliance, Clause 10 provides that a person who contravenes or fails to comply with the provisions of the bill is guilty of an offence if a tax due under Clause 2 is not paid within the time specified, hence empowers FIRS to serve the company a demand note for the unpaid tax plus a sum which is equal to 5 per cent of the tax and if the sum demanded is not paid within two months, the company is guilty of an offence under the bill.
To this extent, Clause 11 therein provides that, a person found guilty on conviction shall be liable: for the first offence, to imprisonment for a term of 6 months or fine up to N1 million or both; and for a second and subsequent offence to imprisonment for a term of 12 months or to a fine up to N2 million or both.
and then