The House of Representatives Tuesday mandated its Committees on Finance and Public Accounts to investigate an allegation that some government’s Ministries, Departments and Agencies, MDAs, are owing N115 billion as tax liabilities.
At its plenary, the House also mandated its Committee on Customs and Excise to investigate the abuse of import duty waivers granted by the Federal Ministry of Finance and its effects on the economy.
Specifically, the Committee on Finance and Public Accounts was also told to investigate another allegation that some taxes collected by banks were not remitted to the Federal Inland Revenue Service, FIRS.
The investigation followed a motion, titled “Need to Investigate the Allegations that Ministries, Departments and Agencies (MDAs) of Government Owe N115 Billion Tax Liabilities and that some Taxes Collected by Banks were not Remitted to the Federal Inland Revenue Service, FIRS”, sponsored by Jerome Amadi (Rivers State, PDP) at the plenary.
While presenting the motion, Amadi said the allegation by the Revenue Mobilization Allocation and Fiscal Commission, RMAFC, that some MDAs were owing the federal government such amount of money was a serious issues that needed to be investigated.
He said: “The House notes that with the receding economic recession in the nation, the need to increase government revenues through aggressive taxation drive, policies, remittances and accountability cannot be over emphasized as they continue the veritable measures towards the country completely exiting recession;
“It is aware of the low culture of individual and corporate organization’ tax compliance, despite taxation being the means through which governments can earn extra revenues to bring about the much desired development to the country, especially in the face of declining revenues from crude oil;
“It also notes the recent allegation by the Revenue Mobilization Allocation and Fiscal Commission, RMAFC, that some MDAs are owing the Federal Government N115 Billion which is such a serious issue that should not be allowed to be swept under the carpet, especially that those funds could have either been mismanaged or squandered by those agencies.”
Adopting the motion through a voice vote, the House told the Committee to also determine the amount each Ministry, Department or Agency, MDAs were owing and for how long the amount had been withheld, and make recommendations on how to prevent a recurrence of the illegality and report backs within six weeks for further legislative action.
The Committee would also determine the nature and extent of abuse of the Customs Pre-Arrival Assessment Reports, PAAR, by importers and officials of the Customs Service to recover unpaid revenues due the Federal Government. It would equally identify the companies or individuals that have refused to redeem the bonds, even after clearing their imports.
Furthermore, the committee is also expected to investigate the operational activities in the Nigeria Customs Service ICT Infrastructure from 2013 to 2017, violation of its ASYCUDA Time-Line Agreement, rules of engagement and the delay in handing over to Nigeria Customs Service when other service providers did so in December, 2013.
The House took the resolutions after considering and adopting two separate motions presented by Jerry Alagbaoso and Company.
While presenting the first motion, Falake (APC, Lagos State), said the inability of the Federal Government to finance the 2017 budget and meet its other obligations, which prompted the Ministry of Finance to source for funds from local canks and the capital market through “sukuk” and leakages of revenue in the Nigerian Customs Services, made the investigation necessary.
He said, among others: “The House Notes that the Nigeria Customs Service is mandated, among other things, to collect duties on all goods imported into Nigeria except those that were granted waivers and are on the prohibited list;
“Also notes that the Nigeria Customs Service customarily issues Pre-Arrival Assessment Reports which are used to assess duties payable on imported goods but the Reports are sometimes compromised by importers, thereby leading to under payment of duties in billions of Naira;
“Aware that the Ministry of Finance gave series of duty waivers to companies in line with the policy of government to assist businesses, but in most cases, the waivers were used to import goods not listed on the approval, thereby depriving the government of the needed revenues;
“Also aware that some importers, most times, issue Bank and/or Insurance Bonds to Nigeria Customs Service in lieu of duty payments to enable the importers clear the imported goods immediately and thereafter expected to redeem the Bonds by paying the appropriate duty rates, but information reveals that the Bonds are either partially redeemed or never redeemed at all;
The committee was given three months to conclude its assignment and report to the House for further action.
Meanwhile, Alagbaoso argued in his motion that “Webb Fontaine Nigeria Limited was one of the service providers for the import and export trade facilitation within Nigeria Customs Service ICT Infrastructure.”
He recalled that other service providers such as Cotecna, SGS and Global Scan which operated in the various seaports, airports and borders, handed over their operations to the Nigeria Customs Service on December 1, 2013, Webb Fontaine Nigeria Limited never did for some curious reasons.
The lawmaker also called on the House to note that “Webb Fontaine has transferred almost all its shares to Hong Kong and is left with one share as stated on the deed of transfer of shares Forms 2006 which raises the question of whose economic interest is being protected by the transfer of nearly all its shares abroad, more so when Hong Kong is not under Nigeria’s jurisdiction.”
According to him, the “transfer of the shares to Hong Kong implies that when Webb Fontaine wins a huge service contract in Nigeria, a major chunk of the profit will be transferred offshore to Webb Fontaine Hong Kong.
“Webb Fontaine is being monitored from abroad, especially now that it still has some perks of ICT infrastructure relationship with Nigeria Customs Service in the area of application of software as far as Pre-Arrival Assessment Report (PAAR) and trade facilitations are concerned in Nigeria.”
