Tax Default: Reps to Probe 23 Banks

The House of Representatives is investigating  alleged sharp practices in the remittances of  tax   by  some commercial banks  to  the Federal Government.

House Committee Chairman  on Finance,  Hon. Abdulmumuni Jibrin, who disclosed this, said the probe will verify claims that 23 designated tax collecting banks were not remitting monies collected to the Federal Government.

He said that earlier  investigation of some federal agencies on Internally Generated Revenue (IGR) has led to additional remittance of N100 billion.

Jibrin told newsmen that   there was no option than to fully investigate the banks. He said, “before, our meeting with the bank executives was meant to be an interactive session but now, we have officially opened up a full investigation based on facts and figures from documents available to us from our consultants and Federal Inland Revenue Service (FIRS).

“We have earlier invited FIRS and they have availed us documents that will have far- reaching effects on this exercise. Their presentation was quite revealing”.

Jibrin  said that the dual roles of banks as tax collectors for government as well as being taxpayers, created some gaps that must be bridged.  According to him, as part of the bank’s responsibility as tax collectors, the FIRS revealed to us that there has been a couple of challenges. In fact, FIRS had instances where they had to delist or blacklist a bank from collecting tax on its behalf because of late remittances.

“What we discovered in our findings was that some banks deliberately engaged in delaying remittances. So, what they do, as against the guidelines of the FIRS, when they collect the taxes was to delay the stipulated period of remitting it to the FIRS so that they can keep the money with them and use it for other purposes like trading and so on.

“Though, eventually they will remit the money to the government, but they found it convenient to keep it beyond the stipulated period for their own advantage and to the detriment of the Federal Government. It is the intention of the committee to look critically into this, with a view of correcting these lapses.

“For instance, for such accounts, it is important that reconciliation  be done because  of allegation o unnecessary and inappropriate charges on such funds by banks. We are interested in that too,” he said.

Although he conceded that  banks contribute a lot to the economy, the lawmaker said the importance is to know if they are doing the right thing. “This is  because year after year, banks declare huge profits but we want to see what they are putting into government coffers as taxpayers”.

While he solicited for the cooperation of all  involved, Jibrin said, “all the committee is doing is against the backdrop of Federal Government revenue generation, the budget deficit of over N1 trillion for this year and the vision of the committee to improve the revenue base of the country.

“As we promised Nigerians, we want to look at every aspect where government is making money. Where government is making money, let us improve, where money is not being made, but with opportunities, let’s explore and open up such places,” he said, noting that other sectors would also be examined due to the success of the earlier exercise.

Jibrin said : “Remember we have done government’s revenue generating agencies and with reports from the Office of Accountant-General of the Federation, hitherto recaltrant agencies have started responding positively. Reports showed that additional N100 billion has been remitted by those agencies.

“We need to know if the banks are paying to government what they are supposed to pay and if there is any instance of evasion, we will not hesitate to tell Nigerians.

“In the final analysis, whatever their challenges, we will look into various laws, Acts that have been in existence so that we can amend, repeal and re-enact if need be, so that we can have a strengthened process of  tax collection in the country.

The committee chairman,  however,  revealed that the  Nigerian National Petroleum Corporation (NNPC) has  allegedly continued to defy the committee on the presentation of the account of individual subsidiaries of the corporation, insisting that it is a joint account.

The lawmaker also declared that his committee would not be deterred by the alleged refusal of the  NNPC to comply with its directive on the presentation of the accounts of its subsidiaries.

“NNPC  has continued to be evasive, but the committee will not relent because we are empowered by the Constitution to carry out this exercise. NNPC is not beyond our capacity to handle, neither is it beyond the laws of this land,” he said.

“We have given the NNPC this latitude  considering their sheer size, which was why we gave them till Thursday, 23 to come back so that they will be able to put their records straight.

“NNPC has continuously refused to provide us with thier documents. The group’s headquarters is insisting on presenting one account on behalf of all the dubsidiaries but we said no, it must be individually presented, which does not prevent the Headquarters from presenting its own group account,” he said

May 20, 2013