WHY RMAFC, FIRS, OTHERS ARE ON WARPATH OVER FINANCE BILL
Certain ouster clauses in the Finance Bill have set the Federal Inland Revenue Service (FIRS) and the supervisory Ministry of Finance on collision course with the Revenue Mobilization and Fiscal Commission (RMAFC), a development analyst have argued, has dire consequences for revenue generation by these government ministries, department and agencies (MDAs) reports Ibrahim Apekhade Yusuf
When the idea of the Finance Bill was being conceived nobody ever thought it would be a subject of controversy somehow such that it would pit agencies of government against one another.
But that unfortunately is the unintended consequences that have heralded the Finance Bill which has become hotly debated by stakeholders including the Federal Inland Revenue Service (FIRS), the supervisory Ministry of Finance and the Revenue Mobilization and Fiscal Commission (RMAFC).
Passage of Finance Bill
The Finance Bill was passed by the National Assembly after consideration of the report by the Joint Committee on Finance; Customs, Excise and Tariff, Trade and Investment on Tuesday, December 21, 2021.
Presenting the report, the Chairman of the Joint Committee, Sen. Solomon Adeola (APC-Lagos), said the bill seeks to support implementation of the 2022 Federal Budget of Economic Growth and Sustainability by proposing key specific taxation, customs, excise, fiscal and other relevant laws.
According to him, a total of 12 Acts were amended under the finance bill which contains 39 clauses.
He said the bill seeks to promote fiscal equity, align domestic tax laws with global best practices, introduce tax incentives for infrastructure and capital markets, support small businesses and promote increase government revenue.
“The Finance Act 2020 was predicated essentially on having no new taxes and no new incentives due to the COVID-19’s impact on the economy as such it was structured across four broad thematic areas.
“Enacting counter cyclical measures and crisis intervention initiatives; Tax, fiscal responsibility, and public procurement reforms; Reforming fiscal incentives policies for job creation; Ensuring closer coordination of monetary, trade and fiscal policies; and Enhancing tax administration,” Adeola said.
Crux of the matter
According to the RMAFC, the Finance Bill has certain ouster clauses which has serious implication on its constitutional mandate.
RMAFC is a Federal Government agency constitutionally empowered by paragraph 32 (a-e) parts 1 to the Third Schedule of the 1999 constitution (as amended) among others; to monitor all revenue accruals to and disbursement of revenue into the Federation Account.
While the FIRS is saddled with the responsibility of collection of tax revenues on behalf of the federal government.
In a press statement signed on behalf of the Commission by Chairman, Public Affairs and Communications Committee, Dr. Rilwan Hussein Abarshi, he said the Finance Bill in its current state without proper amendments to some of the clauses will not bode well for the economy.
Specifically, he said: ”The amendment to S.68(1-6) of the FIRS establishment Act and Section 4(1-3) of the Finance (Control and Management Act if passed; will infringe on the constitutional mandate of monitoring accrual into the Federation Account as well as revenue payable into the Consolidated Revenue Fund of the Federation from the Nigerian National Petroleum Corporation ( NNPC), Nigerian Customs Service (NCS), the Board of Federal Inland Revenue Service (FIRS), Central Bank of Nigeria (CBN), Nigerian Ports Authority (NPA),Nigerian Maritime Administration and Safety Agency, (NIMASA), the Federal Ministry of Finance (FMF and other revenue generating agencies.
“The Finance Bill will foreclose any form of checks and balances as envisaged by the 1999 constitution, whilst exposing government revenues to leakages as all under remittances or unremitted funds will not be checked by government agencies.
“It will cause inter-agency conflicts, unnecessary litigation and disservice to the nation just as the Commission will not be able to pay the engaged consultants after recovery and the engaged consultants may drag the Commission to courts.”
To address these grey areas, Abarshi, therefore impress on the top hierarchy of National Assembly including Senate President Ahmed Lawan, Speaker Femi Gbajabiamila, Chairman of the Senate Committee on Finance, Senator Solomon Olamilekan Adeola and other members in both the upper and lower chambers the need to look into the areas of conflict in the proposed bill.
While speaking at the public hearing a fortnight ago, the Commission led by its Chairman, Engineer Elias Mbam urged the Attorney General of the Federation (AGF) Abubakar Malami; Secretary to the Government of the Federation, Babachir Lawal (SGF); leadership of the National Assembly led by Senate President, Ahmed Ibrahim Lawan; to prevail on the Chairman of the Senate Committee on Finance, Senator Solomon Olamilekan Adeola and members, to step down areas of Conflict in the proposed Finance Bill in the interest of justice and equity.
President Buhari signed the Finance Bill, 2020 (now Finance Act) into law in December 2020 along with the 2021 Appropriation Bill (now Appropriation Act) to make significant changes to a number of tax and regulatory laws in Nigeria including the introduction of COVID-19 incentives.
The commission also has the power to demand and obtain regular and relevant information, data or returns from any government agencies, including the Nigerian National Petroleum Corporation (NNPC), Nigerian Customs Service (NCS), the Board of Federal Inland Revenue Service (FIRS), Central Bank of Nigeria (CBN), Nigerian Ports Authority (NPA), Nigerian Maritime Administration and Safety Agency, (NIMASA) and the Federal Ministry of Finance (FMF).
Giving an in-depth insight into the reasons why Revenue Mobilization and Fiscal Commission is monitoring and also verifying the revenue accruable to the Federation and the operating surplus to the Consolidated Revenue Fun of the Federation, Dr. Idris Aliyu, Technical Assistance to the RMFAC boss noted that S.80(1) of the constitution provides that all revenue or other money raised or received by the Federation (not being revenues or other moneys payable under this constitution or any Act of National Assembly into any other public fund of the Federation established for a specific purpose) shall be paid into and form one Consolidated revenue Funds of the Federation). This provision implies that all revenues or money raised (not revenue mentioned under S.162 (10) for the Federation account or special funds shall be paid to the Consolidated Revenue Funds of the Federation.
While speaking at the public hearing, the RMAFC boss stressed that “the Commission shall not wait for FIRS as a primary agency to carry out enforcement of lost or unremitted government revenue before performing its monitoring functions or seek approval of the Minister of Finance before carrying out its constitutional mandate of enforcement.
“The exclusivity clause of enforcement to FIRS should not be granted and as such, be expunged.”
RMAFC fears unfounded say FIR and Finance Minister
The FIRS boss and the finance minister, have however, individually dismissed the fears raised by the RMAFC Chairman as misplaced.
In his presentation, Mohammed Nami argued that the FIRS mandate to monitor revenue is not exclusive as other relevant agencies: the Budget Office, Office of Accountant General of the Federation, Ministry of Finance, Federation Account Allocation Committee (FAAC) etc., have concurrent mandate to monitor revenue.
“What is clear and exclusive is that FIRS possesses the mandate to access, collect and account for taxes accruing into the federation account.
“Monitoring revenues is not the same as collecting and enforcing them in form of taxes.”
The finance minister spoke in similar vein as she submitted that RMAFC statutory mandate is to monitor revenue accruing into the Federation Account and not the Consolidated Revenue Fund (CRF)
Zainab further argued that in the proposed bill, the FIRS is empowered to sanction non – compliant banks that fail to deliver quarterly returns, investigate tax evasions and other related crimes, amongst other infractions.
Earlier in his opening remarks, Senator representing Lagos West and Chairman of the Committee, Senator Olamilekan Adeola said the 2021 Finance has a total of 12 existing Acts for amendments.
He listed the Acts slated for amendments to include, Capital Gains Tax Act, Companies Income Tax Act, Customs, Exercise Tariff, etc. (Consolation) Act, Federal Revenue Service Establishment Act, Personal Income Tax and Stamp Duties Act.
Others are Value Added Tax Act, Insurance Act, Nigerian Police Trust Fund (Establishment) Act, National Agency for Science and Engineering Infrastructure Act, Finance (Control and Management) Act and Fiscal Responsibility Act.
How Presidency set target for RMAFC
It may be recalled that when the Buhari-led administration came into power in 2015, the President charged the Commission to scale up its tempo of activities by doing its job of proper mobilization and blocking of all leakages.
This charges the President set the Commission on its toes to begin to monitor accruals to and disbursement of revenue from the Federation Account, Aliyu revealed.
Points to ponder by the RMAFC
Some of the grey areas which the Commission wants expunged from the controversial bill according to officials is that it will render the Commission a lame duck such that it would need to seek approval from FIRS before carrying out its constitutional monitoring mandate just as it will foreclose any government agencies including National Assembly from carrying out its oversight functions on FIRS.
Besides, it said the Finance Bill in its current state and form will foreclose any form of checks and balances as envisaged by the 1999 constitution, whilst exposing government revenues to leakages as all under remittances or unremitted funds will not be checked by government agencies as well as result in inter-agency conflicts, unnecessary litigation and disservice to the nation.