At least N8 billion would be contributed from the profits garnered by companies listed on the Nigerian Stock Exchange (NSE) every year to support police welfare following the newly signed Nigeria Police Force Trust Fund Act 2019.
The estimated amount is based on the assumption that the companies would remain profitable and not underperform their net profit performance for the full-year 2018 going forward.
The Nigeria Police Force Trust Fund Act 2019 provides the establishment of the Nigeria Police Trust Fund, which compels companies operating business in Nigeria to contribute 0.005 percent of their net profits for a special intervention fund. Also, the trust fund would consist of an amount constituting 0.5 percent of the total revenue accruing to the Federal Account.
Checks by BusinessDay on the financial results of 142 publicly-owned companies that reported their full-year 2018 audited results at the Lagos bourse show an aggregate profit of N1.71 trillion was recorded by 100 companies. This compares with N1.36 trillion recorded in the previous financial year by 111 companies.
With the introduction of the Nigeria Police Trust Fund, this implies N8.55 billion will be contributed to the trust fund even as more companies continued to slump into losses and operate in an increasingly tough environment despite exiting economic recession since the second quarter of 2017.
“The issue is not just the amount companies have to pay, it is the fact that this extra burden will not solve the police funding problem,” said Taiwo Oyedele, Head of Tax and Corporate Advisory Services at PwC Nigeria. “Education tax has not solved our education funding problem, IT tax has not revolutionized technology in Nigeria so why does anyone think a police fund levy will be different?”
In addition to the two sources, the fund would consist any take-off grant and special intervention fund as may be provided by the three tiers of government; money as may be appropriated to meet the objectives of the Act by the National Assembly in the budget; as well as aids, grants and assistance from international bilateral and multilateral agencies, non-governmental organisations and the private sector.
The funds are expected “to among other things, provide funds for the training and retraining of the personnel of the Nigeria Police Force (NPF), provide state of the art security equipment and machineries to improve the general welfare of the personnel of the force,” according to an explanatory memorandum of the Act seen by BusinessDay.
The Nigeria Police Force Trust Fund Act 2019, which aimed at improving funding and training of personnel of the police force, was passed by the upper chamber of the National Assembly on April 9, 2019, and signed into law by President Muhammadu Buhari on July 2, 2019.
Funds contributed to the trust fund are expected to be utilised for the procurement of operational vehicles; construction of police stations; provision of living facilities such as quarters or barracks for the NPF. Others include financing the procurement of books, instructional materials, training equipment for use at Police Colleges and such other similar training institutions; meeting the cost of participation by the personnel of the NPF at seminars and conference relevant to, or connected with, policing or intelligence gathering.
The accrued fund will be managed by Nigeria Police Trust Fund Board of Trustee including a retired Inspector-General of Police (IGP); the IGP or his representatives as an ex-officio member; a representative of federal ministry of interior, justice and finance; a representative of the civil society group and organised private sector, among others.
OLUWASEGUN OLAKOYENIKAN
