House of Representatives Public Accounts Committee, PAC, on Thursday, warned the Chairman, Federal Inland Revenue (FIRS), Mr Zacch Adedeji over his continuous disregard for the invitation of the committee, adding that his actions amounted to contempt of parliament.
Speaking at the resumed investigative hearing on the revenue leakages Leakages in the Ministries Departments MDAs of the Federal Government, the Chairman of the Committee, Rep. Bamidele Salam, described the attitude of the FIRS Boss as act of irresponsibility and contempt of the parliament
He lamented that Thursday’s sitting would be the fourth time the committee would be inviting the FIRS chairman but he failed to show up
According to him, “In addition to writing him officially, we have also made sure that such letters were delivered personally to his mailbox and his WhatsApp number.
“We condemn this attitude, it is act of irresponsibility and arrogance, and we will tell him that there will be consequences if he continues this contempt of his parliament”.
He said that several letters had been written to him without responses, adding that the value-added tax that the federal government should be collecting on Remittas Platform is not being handled properly by the FIRS.
He explained that the essence of the invitation was for the FIRS chairman to provide insight into significant alleged leakages of Value Added Tax (VAT) amounting to several billions of naira in revenue generated by the Ministries, Departments, and Agencies (MDAs) through a payment gateway called Remita.
He said some VAT from the revenue collected by Remitta ought to have gone to the FIRS, but added that they would rather add the VST together and share it with the CBN, Banks, and Remitta.
According to him, “By the time we finished our reconciliation, the money would be in hundreds of billions,” adding that this was what they were asking the FIRS to come and make clarification, but the service had refused to show up.
This came just as the Committee queried the payment of N15 billion to Remita Platform, from the Office of the Accountant General for the Federation (OAGF) without proper documentation
The Committee accused the Central Bank of Nigeria (CBN) and Commercial Banks of complicity in the sharing of the N15 billion remittance.
Rep. Bamidele Salam, Chairman of PAC, made the allegation at the resumed investigative hearing on revenue leakages in Abuja on Thursday.
Remita is a payment solution that helps individuals and businesses make and receive payments, pay bills, and manage their finances.
The Committee Chairman explained that the payment of N15 billion to Remitas from the OAGF from 2016 to 2018 was questionable, adding that the OAGF claimed that there was no any agreement or contract to that effect.
While faulting the payment as illegal., he said “The money is an illegal payment; there was no budget provision, so where did they source the money from?”.”The CBN also shared in the money.
According to him, for instance, if someone pays N150,00 as a Remittas you will now pay 7.5 percent Value-Added Tax (VAT) in addition to it.
“Ordinarily, that whole sum of VAT ought to go to the Federal Inland Revenue Service (FIRS), but what they are doing in this transaction is that they will now add that VAT to the N150,00.
He said, “System Spec and Remitta, both collecting revenue for the federal government, will share 50 percent, while the banks and the CBN will also have their shares.”
He said that by the time the Committee finished its reconciliation, “I am very sure that hundreds of billions of naira will be the VAT component that was not remitted to FIRS.”
According to him, each bank ought to take the money and directly remit it to FIRS. Now Remita is saying that each of those collecting the money will come and calculate the money that has been shared into shreds. Now, how do we track this kind of money?
On his own, Director Banking Services, CBN, Mr Ahmed Abdullahi, said they deemed it fit to source for an alternative way of remitting revenue, and Remita and System Spec were selected because they had been rendering similar services to banks.
According to him, Remita was engaged in 2011 and operations commenced in 2012 with system module names. The CBN only finalized the transaction
He said that the fees charged under the TSA were in line with the structure of banking. The volume of revenue collection that passed through Remita was N86 million.
Mr. Oyewole Adewale, Chief Accountant, TSA Department, representing the Accountant General for the Federation, accused the CBN of not honoring its letters to reconcile the revenue accrued to the country through TSA.
He said the OAGF had developed a system where all revenue generated by the Ministries of Departments and Agencies of Government (MDAs) could now be monitored without any interference.
Mr. Aderemi Atanda, Director, Remita Payment Services Ltd., while reading the summary of the TSA collection record, said that 10, 20, and 50 percent were shared among CBN, commercial banks, and Remitta.
He said that collections “are usually not static but vary.
According to him, “In 2015–2016, it was N4.2 million, and the fee paid was N8.5 billion; in 2016, N1.3 billion was paid.“