Stakeholder Faults Finance Act 2021, Petitions NASS, NGF, Minister, Others

The Managing Consultant/Chief Executive Officer of Maroct Consultants Group, Mr Uzoma Francis Ubani, (FCTI) has faulted Section 27 of the Finance Act, 2021, and argued that it is contradictory to Sections 162 and 163 of the Constitution of the Federal Republic of Nigeria, 1999 as amended.

He also petitioned the Attorney-General of the Federation, Abubakar Malami; the President of the Senate, Ahmad Ibrahim Lawan; Speaker of the House of Representatives, Olufemi Hakeem Gbajabiamila; Nigerian Governors’ Forum; The Minister of Finance, Budget and National Planning, Hajiya Zainab Ahmed; the Executive Chairman, Federal Inland Revenue Service (FIRS), Mr Muhammad M. Nami; and the Executive Secretary, Joint Tax Board (JTB) over Section 27.

The reads in part: “Public revenue/distributable pool account: Section 162 (1) of the Constitution of the Federal Republic of Nigeria, 1999, as amended, enjoins the Federation to maintain a special account to be called “Federation Account” into which shall be paid ALL revenues collected by the Government of the Federation, except the proceeds from the personal income tax of the personnel of the Armed Forces of the Federation, the Nigerian Police Force, the Ministry or Department of government charged with the responsibility for Foreign Affairs and the residents of the Federal Capital Territory, Abuja.

Section 162 (10) (a) of the said Constitution provides thus:

162 (10) “For subsection (1) of this section “revenue” means any income or return accruing to or derived by the Government of the Federation from any source and includes –

(a) any receipt, however, described, arising from the operation of any law…Thus, stamp duties could be said to constitute “revenue” within the meaning of this section.

“However: Section 163 of the Constitution of the Federal Republic of Nigeria, 1999, as altered, provides thus: “Where under an Act of the National Assembly, tax or duty is imposed in respect of matters specified in item D of Part II of the Second Schedule to this Constitution, the net proceeds of such tax or duty shall be distributed among the States based on the derivation and accordingly –(a) where such tax or duty is collected by the Government of a State or other authority of the State, (such as SIRS) the net proceeds shall be treated as part of the Consolidated Revenue Fund of the State; (In line with Section 4(2) of the Stamp Duties Act)

(b) where such tax or duty is collected by the Government of the Federation or other authority of the Federation, (such as FIRS) there shall be paid to each State, at such times as the National Assembly may prescribe, a sum equal to the proportion of the net proceeds of such tax or duty that are derived from the State”. (In line with Section 4(1) of the Stamp Duties Act)

Paragraph 7 (Item D), Part II of the Second Schedule to the Constitution of the Federal Republic of Nigeria, 1999, as amended, which is on Concurrent Legislative List provides thus:

“In the exercise of its powers to impose any tax or duty on – (a) Capital gains incomes or profit of persons other than companies; and (b) documents or transactions by way of stamp duties

The National Assembly may, subject to such conditions as it may prescribe, provide that the collection of any such tax or duty or the administration of the law imposing it shall be carried out by the Government of a State or other authority of a State”. (Such as States’ IRS).

“Uwais, CJN (as he then was) in interpreting the above-cited provisions of the 1999 Constitution, in the case of Attorney-General of Ogun State & Ors. Vs. Attorney-General of the Federation (2010) 2 N.T.L.R. 902 at 943 para. F 944 para. B) held:

“It seems to me that the provisions of Section 162 Subsections (1) and (10) of the 1999 Constitution, are general, while those of Section 163 (b) of the Constitution, which deal in particular with Capital Gains Tax and Stamp Duties are specific. Therefore, the latter provisions override the former for generalibusspecialia derogant (i.e. special things derogate from general things).