Celebration that greeted the recently passed Finance Act 2021 may be short-lived as the Act may be resent to the National Assembly for rework.
The need may arise to delineate revenue collection responsibilities of two leading government revenue generating agencies, the Federal Inland Service (FIRS) and Nigeria Customs Service (NCS).
The consideration arose from the lamentation by Comptroller General of the Nigerian Customs Service, Col Hameed Ali (rtd) over seeming usurpation of responsibility to collect certain categories of revenue by FIRS.
Both the Senate Committee on Finance and the President of the Senate, Ahmad Lawan agreed to rework the Finance Act if necessary to delineate functions between the two agencies.
Col. Ali (rtd) who was at an interactive session between the Senate Finance Committee and Federal Government Revenue Generating Agencies at the National Assembly on Monday said the Act gave a wide range of responsibility to FIRS which rendered Customs incapable of collecting certain revenues for government.
He demanded an alteration to the Act to enable Customs exercise some collection rights.
In his submission, the Custom boss said: “Section 22 of the Finance Act 2022 seeks to amend the Federal Inland Revenue Service law Section 68 (1), (2), (3), (4) and (6) by allowing the Act to takes precedent over any other laws with regards to the administration of taxes, assessment, accounting, collection and enforcement of taxes and levies due to the Federal Government and the federation of Nigeria.
“When the law was signed, it did not state clearly, the extent and scope of the taxes and levies in question. We are aware that the taxes and levies under the responsibilities of the FIRS are income tax, personal income tax, capital gain tax, VAT and so on.
“However, the amendment is so wide and open that we in the Nigerian Customs Service took it that it had hindered our ability to collect levies and other collections.
“Our understanding of the provisions is that all other laws which mandated us to collect are inconsistent with the new Act, then they are voided. This means that the law that mandates us to collect as revenue generating agencies, are voided completely. This means that we do not have the responsibilities to collect levies. If we don’t have the responsibilities to collect, what are we going to discuss here.
“It shall be an offence for any person to carry out the functions of administering, assessment, accounting or enforcement of taxes or levies due to the Federal Government of Nigeria unless authorised by the Ministry of Finance with the approval of the National Assembly.
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“We have consulted with lawyers and the conclusion is that the Act is confusing and if other revenue generating agencies decided to act on the provisions, they may decide not to collect duties and levies”
In his response, the Senate President said the revelation by the Custom boss is scary.
He wished that officials of the Ministry of Finance, Budget and National Planning were at the meeting to provided some clarifications on the contentious aspect of the Act.
Speaking, Lawan said, “we took it for granted that since it was an executive bill, that there were some engagements among the agencies of the Federal Government.
“We also called for public hearing so that we could x-rayed it. You are saying that you don’t have the legal mandate to collect taxes and it is a scary revelation.
“The Senate Committee on Finance and the Ministry of Finance and other agencies would look at the Act. If it is established beyond reasonable doubts that we need to amend it, we will do so without delay.
“It will be the fastest amendment because we need you to collect more monies for the Federal Government.”
Chairman, Senate Committee on Finance, Senator Solomon Adeola, however, said the Section cited was not targeted at the NCS.
“What necessitated that singular act was as a result of the issue between the Revenue Mobilisation and Fiscal Commission and the FIRS. There were clashes between them from time to time. Some activities of RMFAC were not in tandem with the Act that established it.
“We discovered that the only way that we can make their roles explicit is through the Finance Act concerning the assessment and accounting of taxes. We discovered that RMFAC are going to agencies to audit their tax accounts which is not part of their responsibilities based on the law that established RMFAC.
“The only agencies saddled with that responsibility is the FIRS. That was what that law tends to address. We are ready to look into it again if other revenue generating agencies believe that it has hindered them from performing their responsibilities and we would amend it accordingly,” he said.
