President of the Senate, Senator Ahmed Lawan on Thursday, said the N500bn stamp duty revenue projection on the electronic transaction for the 2021 fiscal year was unacceptable to the Senate because more revenue are derivable from stamp duty collections.
The president of the Senate said the projected figure of N500bn was too small a target, given the volume of electronic transactions on a daily basis in the nation’s economy.
He said this during an interactive session with heads of revenue-generating agencies of the federal government in the ongoing public hearing on the 2021 – 2023 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) at the Senate.
He said the narrative of physical transactions which are less to online transaction offers the nation huge revenue sources for the 2021 fiscal year.
He called on Chairman of the Finance committee and co-Chairman of the Committee of Finance and National Planning and other relevant committees of the Senate to look into this and exhaustively explore the possible revenue derivable from electronic transactions which he is convinced would surpass N500bn for the 2021 fiscal year.
According to Lawan, “The projection is low, I think we need to look at that, Chairman, our relevant committees should be exhaustive about what is accrued because with the electronic transaction, I believe that with the story we are getting, we can receive more than that.
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“There is a need to look at this and work it out for a more realistic figure, the President of the Senate said.
Lawan’s view was in reaction to the submission by the Director General, Budget Office of the Federation, Ben Akabueze who said the budget office and the Federal Inland Revenue (FIRS) have agreed on N500bn projection for the electronic stamp tax for the 2021 fiscal year.
He said the decision was after due consultation with the Central Bank of Nigeria which warehouses the receiving account.
“We have a projection of N500bn in 2021, we and the FIRS sat together to review this and looked at the number, that translates to a billion Naira every week and we felt that is the kind of target we should be pursuing.
“The banks have been collecting this by charging eligible credit to customers and remit to the relevant account in the Central Bank,” Akabueze submitted.
Chairman of the Federal Inland Revenue, Mohammed Mamman Nami had told the the Panel that stamp taxes has reached weekly collection of N1bn from the payment by the banks.
According to him “one particular bank remitted about N1.2bn alone a week.”
Dismissing the figure as abysmal when compared to facts the Senate says it is disposed to, Senator, Ayo Patrick Akinyelure, said the revenue collection agencies are not transparent in their dealings.
Insisting that the stamp duty revenue alone could fund more than the deficit of the nation’s total budget, he said transactions of 300,000 in daily basis when transparently taxed, would sufficiently raise the funds for the nation’s revenue beyond N500bn.
He said the all government-owned enterprises should make collection electronically and in real-time so that the exact amount raised can be ascertain at all times.
His words: “With 300,000 electronic transaction on daily basis a N5.2trillion stamp duty cashless transaction is achievable.
“We are only deceiving ourselves, this is an economy that is the largest economy in Africa, how can we be operating with a deficit budget for God sakes? It is therefore important that the Chairman of the Federal Inland Revenue Service, the CBN and other revenue-generating agencies to have a roundtable on this.
“This item alone can finance between 30 to 40 per cent of the total budget of the federation if we are sincere.
“Therefore talking about 500bn stamp duty projection is a none issue to talk about as we are deceiving ourselves.
“The whole idea of this function is how do we achieve a significant reduction in the budget deficit. Why can’t we run a surplus budget? Our economy is so endowed with resources that can make us operate a surplus budget if the revenue collectors are sincere.
“Where you have an issue with the law, you are supposed to come to the National Assembly to amend the law.
“Anything administrative is administrative, it gives room for leakages and for things to happen and you cannot hold the agency CEO responsible.
“When it is a matter of the law, you have the basis to punish defaulters by showing them the law they have defaulted. Administrative policies can be manipulated.
He said a single code agreed upon by the revenue-generating agencies would suffice for maximal collection of internally generated revenue to finance the budget.
“My Chairman, let three of them the Chairman of Federal Inland Revenue, the governor Central Bank and the Budget office of the federation should harmonise their position so that there will be policy to the banks to collect real-time the cashless transaction code for all deposit bank, I rest my case Mr Chairman, Senator, Akinyelure stated.
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