Updated: March 6, 2021
The Nigerian Senate on Tuesday mandated its Committee on Finance to investigate the non-remittance of over N20 trillion (about $55 billion) into the Federation Account by Central Bank of Nigeria, an amount collected as stamp duties from Banks and Financial Institutions in the country.
The decision to probe the non-remittance of stamp duties was reached sequel to the consideration of a motion on “The need to improve Internally Generated Revenue of the Federal Government of Nigeria through non-oil revenue”.
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Sponsor of the motion, Senator Ayo Akinyelure (PDP, Ondo Central), said that the Central Bank had in January 2016, issued a circular directing all banks and financial institutions to charge stamp duty of N50 on lodgments into current accounts against revenue projections by the Federal Government of N2.5 trillion annually.
He noted that after the issuance of the said circular by the CBN, all deposit money banks and financial institutions effected N50 per eligible transaction in accordance with the provisions of the Stamp Duty Act 2004 and Federal government Financial Regulations 2009.
According to him, despite efforts by the Federal Government to recover over N20 trillion from Nigeria Inter-Bank Settlement Systems (NIBBS) to the Federation Account, “the Central Bank of Nigeria and NIBBS have technically refused to comply with the Presidential directives for the recovery of over N20 trillion revenue into the coffers of government.”
Akinyelure added, “The CBN and NIBSS deliberately failed to cooperate and comply with the directives of Mr. President for the realization of over N20 trillion revenue due from stamp duties collected for 2013 to 2016 and subsequently over N5 trillion minimum revenue due to be collected annually to the Federation account to be shared among States of the Federation for infrastructural and economic development.”
The lawmaker lamented that since the implementation of the collection of stamp duties, “accountability by banks has not been transparent and no report by CBN or its subsidiary (NIBSS) to the Nigerian public to know the actual revenue generated, collected and transferred to the Federation Account.”
Akinyelure recalled that the House of Representatives and National Economic Council had in May 2019, waded into the matter and recommended all agencies to support the Federal Government recovery mandate on the over N20 trillion stamp duty.
He stated that the Special Presidential Investigation Panel on Recovery of Public Property (SPIP) and Revenue Mobilization Allocation and Fiscal Commission (RMAFC) have adopted the combined resolutions of the House of Representatives and National Economic Council.
The lawmaker lamented that before the Joint Task Force could swing into action to recover the unremitted amount, the CBN in August 2019 released a report that its borrowings to banks will hit N23 trillion by the end of this year.
“The Senate must consider whether the target N20 trillion fund is being recycled into private banks (with impunity) when Federal Government had directed its recovery.
“Section 111 of the 1999 Constitution (as amended) has empowered all 36 State Attorney-Generals and Commissioners for Justice to shut-down any banking operation nationwide for ‘summary recovery’ of stamp duty revenue accruing to them by a further provision of Sections 163 of the same Constitution, and we should not fail in our collective role as Senators of the Federal Republic of Nigeria to stem the looming crisis for our various constituencies and the nation in general,” Akinyelure said.
In his concluding remarks, the President of the Senate, Ahmad Lawan, said, “I engaged the Ministry of Finance and CBN for an interaction, and I discovered that what we have been expecting to be available as stamp duty is not so.
“I was under the impression that we had over N20 trillion somewhere. It will interest you to know that we don’t even have N1 trillion.
“What has happened is because those that are supposed to collect the stamp duties were taking advantage of the non-electronic transaction.
“With the passage of the finance bill, this is an opportunity we have to start getting what ordinarily should go to the government.
“The banks and many private organizations have taken advantage of the way the stamp duties have been.
“I want to believe that from January 2020, when the Finance Bill will start being effective, the stamp duty collection will be significantly improved.
“It is for our Finance Committee to monitor closely what the collection should be.
“We have also come up with another idea of engaging all the revenue generating agencies on a quarterly basis.
“We have got already a list of all of them from the Federal Ministry of Finance. We will put them into maybe four groups, and the first meeting for evaluation of their collection will be sometime in March.
“We would like to know in the first quarter how much they have collected, and if they have not met targets; if they have met targets, how do we do better than that? The idea is not to slow agencies to do whatever they want.”