The public accounts committee of the House of Representatives on Thursday, March 28, accused the Central Bank of Nigeria (CBN) and commercial banks collecting revenue for the government of colluding to share the money made from Value Added Tax paid on Remita by customers.
Chairman of the committee, Bamidele Salam (PDP, Osun) who made the allegation at the resumed investigative hearing on revenue leakages in Abuja, also accused the apex bank and the Office of the Accountant General of the Federation of illegally paying about N15 billion to Remita without any formal contract.
The committee however warned the chairman of Federal Inland Revenue (FIRS), Zacch Adedeji against his continuous disregard for the invitation of the committee, saying his actions amount to contempt of parliament.
He also queried the payment of N15 billion to Remita, a payment platform from the Office of the Accountant General for the Federation (OAGF), saying the payment by the OAGF from 2016 to 2018 was questionable because the OAGF paid the money without agreement or contract.
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Salam described the payment as illegal, saying, “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. The money is an illegal payment; there was no budget provision, so where did they source the money from?”
He said, for instance, if someone pays N150 as a remitter, 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.
“They will add it up, gather the money together, and take it to the CBN”
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 share”, adding 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.”
He said each bank ought to take the money and directly remit it to FIRS, saying, “Now Remita is saying that each of those collecting the money will come and calculate the money that has been shared into shreds. How do we track this kind of money?
The director in charge of Banking Services at the CBN, Ahmed Abdullahi, said Remita and System Spec were selected as alternative ways of remitting revenue because they had been rendering similar services to banks.
He explained that Remita was engaged in 2011 and operations commenced in 2012 with system module names, adding that the CBN only finalized the transaction
He said that the fees charged under the TSA were in line with the structure of banking.
Also speaking at the hearing, the Chief Accountant of the TSA Department who represented the Accountant General for the Federation, Oyewole Adewale, accused the CBN of not honouring 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.
Director, Remita Payment Services Ltd., Aderemi Atanda who gave the summary of the TSA collection said that 10, 20, and 50 percent were shared among CBN, commercial banks, and Remitta.
While saying the collections are usually not static but vary “In 2015–2016, it was N4.2 million, and the fee paid was N8.5 billion; in 2016, N1.3 billion was paid.”
Meanwhile, while warning the FIRS against failure to appear before the committee, the Committee chairman said, “This is the fourth time the committee would be inviting the FIRS chairman but failed to show up.
“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 and describe it as irresponsible and arrogant, and we tell him that there will be consequences if he continues this contempt of his parliament.”
Salam alleged that the value-added tax that should accrued to the Federal Government has not been collected by FIRS.
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, Bank, and Remita.
He said: “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 collect, but the service had refused to show up.
