The Ministries, Departments and Agencies (MDAs) of federal, state and local governments are collectively indebted to Federal Government in tax obligations of about N168 billion, New Telegraph has learnt.
The amount, which represents unremitted taxes obligations these bodies are expected to pay into the federation account, was uncovered by tax audit exercise conducted by Revenue Mobilization Allocation and Fiscal Commission (RMAFC).
Acting Chairman of RMAFC, Alhaji Shettima Umar Abba Gana, told New Telegraphthat the amount was arrived at if penalties to be paid by the defaulting agencies are not factored in.
Gana said that some MDAs, state agencies and local councils have pleaded for cancellation of penalty, but he affirmed that paying the fund is not negotiable. “Waiver is for the penalties. The funds itself have to be paid.
The amount is about N168 billion and this includes the ones owed by some federal MDAs, states and their MDAs, and the local government. Some taxes were supposed to come to the federation account totalling about N168 billion.
“We are doing reconciliation and as they are paying, some taxes are becoming due. It’s the penalty they are pleading to be granted waiver,” he clarified.
Asked whether defaulting agencies’ request for waiver on penalty would be granted, he said his commission had tabled it before Ministry of Finance and Federal Inland Revenue Service (FIRS) for consideration.
“We’re talking with the Federal Ministry of Finance, FIRS and other agencies on how to handle that. They gave their reasons and we have to listen to them,” he said.
RMAFC’s tax liabilities exercise was carried out in phases. In early 2017, the commission established the sum of N115,811,884,454.01 as tax liabilities during first phase of the exercise.
The first leg covered 2005 and 2015 and it spread across 30 states of the federation with exemption of Adamawa, Borno, Delta, Ebonyi, Katsina and Kebbi states, which were given a clean bill of health as they are bereft of any tax liabilities.
The commission projected that an additional sum of N40 billion would be realised at the completion of the exercise.
During the first phase of tax audit last year, states, local councils and other defaulting agencies covered pleaded for waiver of penalty and interest totalling N24,030,004,256.31.
The amount, according to the commission, comprised N9,748,742,417.28 as penalty and N14,281,261,839.03 as interest.
“In the course of the exercise, it was discovered that some Federal Government agencies domiciled in the states were not remitting Pay As You Earn (PAYE) to the state governments, thus depleting their Internally Generated Revenue (IGR) base. In the same vein, RMAFC also called on the Federal Government to reimburse some of the state governments that executed Federal Government projects in their states so as to enhance their revenue profile,” RMAFC had explained in a statement last year.
The commission urged states such as Bauchi, Cross River, Edo, Enugu and Rivers, which are yet to participate in the exercise, to do so in the spirit of equity and fair play since they continue to enjoy the proceeds of tax remitted by their counterparts.
RMAF is the Federal Government’s agency statutorily vested with the power of determining revenue accruals to federation account.
The commission derives its powers and constitutional functions from paragraph 32 of Part I of the Third Schedule to the 1999 Constitution of the Federal Republic of Nigeria.
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