The continued feud between the Federal Inland Revenue Service (FIRS) and the Nigeria Postal Service (NIPOST) on whose responsibility it is to collect stamp duty charges has once again shown lack of collaboration, overlapping mandate and vested interests among agencies of government.
Those who know and are closely monitoring the issue are now calling for clarity in the functions of government Ministries Departments and Agencies (MDAs), which should be working in a coordinated manner in the interest of the ailing economy.
Tope Fasua, CEO, Global Analytic Consult, describing the development as unfortunate and Nigeria system of governance as patchy and overlapping, says it lacks collaboration and proper coordination, which has led to creation of various parastatals without detailed mandate.
Finance Act, 2020, provides that, “Notwithstanding the provisions of the Stamp Duty Act, electronic receipts or electronic transfer for money deposited in any bank or with any banker on any type of account, to be accounted for and expressed to be received of the person to whom the same is to be accounted for of amounts from N10,000 upwards shall attract a singular and one-off duty of the sum of N50.
“Provided that money paid into one’s own account or transferred electronically between accounts of the same owner by the owner within the same bank shall not be chargeable to duty.”
The NIPOST over the years has been known to be responsible for collecting stamp duty. According to Section 4 (1) of the Stamp Duty Act. 2004, “The Federal Government shall be the only competent authority to impose, charge and collect duties upon instruments specified in the Schedule to this Act if such instrument relate to matters executed between a company and an individual, group or body of individuals.”
But the Finance Act, amending the Stamp duty Act substituted, “Federal government” for “Federal Inland Revenue Service”.
According to Fasua, “The clash is not only between NIPOST and FIRS but a lot of parastatals in Nigeria as well as between the tiers of government.
“We have seen the Federal Government threatening to debit the FAAC account of states which are taking illegal taxes from miners, and many more of such clashes will occur.”
He stresses that the disagreement between the agencies speaks to the frantic rush for revenue by government agencies, which is accentuated by the sharp economic downturn caused by Covid-19.
“However, before the Covid-19, successive Nigerian governments have never been frugal with resources and have thus alienated the people who have no money to pay more taxes or even meet up with existing ones.
“Most of the sources of revenue for the FIRS have dwindled and so in my opinion the FIRS is bearing down on and bullying NIPOST who took the initiative on stamp duty first,” Fasua says.
At a recent meeting, Nami Mohammed, chairman of FIRS, insisted that going by the new Finance Act, FIRS was the sole competent tax authority to assess, collect and account for stamp duty in Nigeria, adding that as revenue from oil and gas continued to dwindle due to the global fall in demand and price, indirect taxes such as stamp duty remained the viable and sustainable alternative revenue source for funding budgetary requirement by the Nigerian government.
At the same event, Ismail Adebanjo Adewusi, postmaster general/CEO of NIPOST, countered him, saying the Finance Act did not in any way stop NIPOST from its mandate.
“In spite of amendment to the Finance Act, it has not affected the responsibility of NIPOST. There is no fight between NIPOST and FIRS over tax collection,” he said.
Other experts inform BusinessDay that there is urgent need for a review of the overall government institutional framework to ensure clarity and synergy.
Auwal Musa Rafsanjani, executive director, Civil Society Legislative Advocacy Centre (CISLAC), in an interview with BusinessDay, decries overlapping mandate, duplication of duties and lack of clarity in various institutional frameworks in the Nigerian government.
There is need to review and ensure proper understanding of the institutional framework to aid effective service delivery, he says, but, “This issue between FIRS and NIPOST brings to mind our concern about ensuring that there is a clear understanding of our institutional framework.
“This fight about who to collect revenue has lingered for some time now and it shows that these agencies do not understand their role and are not working in synergy. We have so many issues of overlapping mandate and duplication of duties, which is not supposed to be.
“The existing mandate of NIPOST has not been repealed yet and we are seeing the Finance Act empowering FIRS to collect stamp duty. All of these speak to lack of coordination, cooperation and proper governance structure.
“Why should government agencies be fighting instead of working together to achieve a goal. We are seeing this fight because money is involved, and I think it is more about personal interests.”
Speaking with BusinessDay, Aliu Hassan, an Abuja-based economist, also calls for synergy and healthy inter-agency relationships that obviously is lacking in the Nigeria system of government.
He blames present government style of leadership, which has also resulted in so much bickering among its agencies, noting, “Our system of government is far below expectations even though we see agencies springing up everywhere without clear mandates.
“To tackle these issues, we need to trim the number of parastatals and ensure they are not being created on a whim. There should also be clearly delineated functions that do not overlap.
“It is the function of the Bureau for Public Sector Reforms to ensure this is so. I know they have made efforts in this regards but their reports are often ignored.
“I hear every bill approved by the National Assembly has a parastatal attached to it. That is why their numbers have ballooned.”