House Probes Non-compliance With Tax Remittance by Oil Companies, MDAs

• Investigates suspicious practices of MDAs in execution of capital project

Adedayo Akinwale in Abuja

The House of Representatives has resolved to investigate the non-compliance on tax remittance by Ministries, Departments and Agencies (MDAs) of government, oil companies and other organisations, with a view to ensuring that all debts in taxes owed the Federal Government are duly recovered.

The Green Chamber also urged the Federal Inland Revenue Service (FIRS) to, as a matter of urgency, embark on immediate recovery of all taxes owed the Federal Government by MDAs, oil companies, as well as other corporate organisations and individuals.

The decision of the House followed the adoption of a motion moved at the plenary on Thursday by Hon. Esosa Iyawe.

Iyawe, while moving the motion, explained that taxation is a veritable tool used by governments to regulate economic and commercial activities and ensure availability of funds for sustainable national development.

He said that the FIRS Act, 2004 established the FIRS for the core purpose of assessing, collecting, remitting and accounting for the federation’s taxes.

Iyawe expressed concern that in 2021, FIRS revealed that the sum of N17,690,341,565 was owed in tax by some companies, whose addresses were untraced till date, but no action was taken to locate or recover the funds.

The lawmaker lamented that audit reports from 2015 to 2019 revealed government agencies owing hundreds of billions in FIRS taxes comprising underpayments and under recoveries.

He said the audit report further revealed that over 5,000 companies and MDAs were owing N5.2 trillion in withholding taxes.

“Disturbed that under-remittance and non-remittance of tax deprive the Federal Government of much needed funds to drive its policies for national development, and if the situation is not urgently addressed, the effect could be crippling on the country’s already dwindling economy,” he said.

Iyawe expressed concern that while small-scale businesses in Nigeria are frustrated by multiple taxation by the FIRS, states and local government authorities, multinational companies and other corporate organisations are getting the kid-glove treatment.

The House resolved: “Mandate the Committees on Public Accounts and Finance to investigate the non-compliance on tax remittance by Ministries, Departments and Agencies (MDAs) of government, oil companies and other organisations, with a view to ensuring that all debts in taxes owed the Federal Government are duly recovered, and report back within four (4) weeks for further legislative action.”

Meanwhile, the House has resolved to investigate the procurement of capital projects by MDAs, parastatal and institutions of the Federal Governments and recover withheld sums from the execution.

The House also mandated its Committees on Financial Crimes, Public Service Matters and Public Procurements to carry out the investigation and report back within four weeks for further legislative action. 

The resolution of the House followed the adoption of a motion moved at the plenary on Thursday by Hon. Kelechi Nwogu.

Presenting the motion, Nwogu said that Section 81 (1) of the Constitution of the Federal Republic of Nigeria 1999 (as amended) provides that: “The president shall cause to be prepared and laid before each Houses of the National Assembly at any time in each financial year estimates of the revenue and expenditure of the Federation for the next following financial year.” 

He explained that Section 81(2) of the Constitution of the Federal Republic of Nigeria 1999 (as amended) provides that: “The heads of expenditures contained in the estimates (other than expenditure charged upon the Consolidated Revenue Fund of the Federation by this Constitution) shall be included in a Bill, to be known as Appropriation Bill, providing for the issue from the Consolidated Revenue of the sums necessary to meet that expenditure and the appropriation of those sums for the purposes specified therein”.

Nwogu noted that heads of all Federal Government MDAs, parastatal and institutions are summoned to the National Assembly for Examination and Validation of their budgetary proposals before passage and Presidential Assent.

He pointed out that no adjustment to the estimates contained in the Appropriation Act shall be made without recourse to the National Assembly, according to the law.

The lawmaker observed that a majority of government MDAs, parastatal and institutions allegedly award contracts that are below the amount provided for the execution of the capital component of the Appropriation Act.

He expressed worry that the National Assembly has not been provided with information on withheld funds from Federal Government agencies, causing project procurement reductions to negatively impact on project completion and contractors abandonment or requests for variation of the initial cost; 

Nwogu decried that the National Assembly’s powers, as provided in Sections 88 and 89 of the 1999 Constitution, as amended, are being undermined by the actions of the MDAs, parastatals and institutions.

The House resolved: “Mandate the Committees on Financial Crimes, Public Service Matters and Public Procurements to investigate the procurement of Capital Projects by MDAs, Parastatal and Institutions of the Federal Governments to recover withheld sums from the execution and report back within four weeks for further legislative action.”