Nwalem Mbam, chairman of Revenue Mobilization, Allocation and Fiscal Commission


The decision of the Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC) to probe 22 Deposit Money Banks in the country over collection of stamp duty from 2000 to 2018 may not be mere rhetoric as it reiterated the resolve last week not to go back on the verification and probing exercises.

By law, RMAFC is a body created by an Act with the responsibility amongst others, of monitoring the accruals to and disbursement of revenue from the Federal Account and reviewing from time to time, the revenue allocation formulae to ensure conformity with changing realities.

RMAFC is not a revenue generating agency, rather, it was empowered by the constitution to serve as a watchdog over revenue generating organisations. But there had been allegations that some banks have not been remitting the stamp duty and other tax revenues promptly as required by law to the concerned agencies of government.

Earlier, RMAFC had recovered the sum of N4.2bn from banks from January 2008 to June 2012 promising that more recoveries would be made. And buoyed by the huge success recorded and sequel to the approval of the National Economic Council (NEC), it launched the second phase of the exercise covering the period July of 2012 to December 2015 which has so far established the sum of N57.7bn.

So far, the revenue accruals being probed by RMAFC through consulting auditors include Withholding Tax, Value Added Tax, Royalties, Signature bonuses, Customs duties and tariffs being collected by various agencies including the Central Bank of Nigeria, the Nigerian National Petroleum Corporation, the Department of Petroleum Resources, Nigeria Customs and the Federal Inland Revenue Services.

When RMAFC made public its intention to carry out verification and probe of the 22 Money Deposit Banks, it raised concern over the legality of the probe among vested interest, which led to clarification by the spokesperson of the Commission, Ibrahim Mohammed, on the reasons behind its intention.

He said: “Section 6(1) of the RMAFC Act, 2004 which provides that the commission shall have powers to among others, monitor the accruals to and disbursement of revenue from the federation account. He said by this responsibility, RMAFC is justified in its action in relation to the on-going investigation of the 22 banks over failure to remit stamp duty appropriately”.

However, Business Hallmark spoke to lawyers on the possible outcome of the probe and if actually RMAFC has the legal responsibility to probe the banks on the issue of non-remittance of funds collected on behalf of the federal government.

Mr. Adedayo Adedeji, an Abuja based lawyer, is of the opinion that, it is only the bank regulator that can interfere in the matter for now to actually establish what went wrong.

“I think it is the Central Bank that is the regulator of the banks that can probe them. And if actually they are found to have defaulted on the payment then the appropriate sanction would be taken against them. Because if they had collected funds on behalf of government and they refused to remit same, it is a violation of the law.

“But it is the CBN that is saddled with such responsibility to probe not the commission. I am not speaking for the banks nor FG, but the fact remains that for the federal government to have made such grievous allegation against the banks, it has challenged the banks to come out with their own side of the story and if there are any justifiable reasons for the alleged action.

“If the law or an agreement was reached that such an amount should be collected and remitted and there was default, it wrong in law. And the question that banks are well organised that such infractions cannot be committed by them is not tenable. The point is they must defend their actions”.

Similarly, a Lagos-based lawyer, Patrick Eva, in his own submission, considered a setting up of a commission of enquiry as the best way to ascertain what went wrong and not the right of RMAFC to probe the banks.

He said, “What they should do is to set up a commission of enquiry to audit the account of the banks in relation to what was collected and remitted to the FG coffers”.

Eva also raised the question of how RMAFC established that banks have defaulted in what was remitted. These are some of the facts that need to be established. You cannot just wake up to make allegations there must be due process.

“It is not right to just make allegation, it must be established in respective of what they think; that is the position of the law. To say they are probing banks is wrong. The banks are not an appendage of government; they only acted on their behalf to collect funds. Also, in the course of doing that, do they put into consideration possible cost incurred by the banks? RMAFC must consider this and make such a public knowledge.

“Banks are private entity and to some extent they are well advised and they know consequences of such infractions. So I doubt if they could hold on government funds as alleged. There must be reconciliation of the accounts and if they are found wanting they should be asked to pay and if they refused or failed to pay, then a criminal charges can be proffered against them”.

Eva also urged RMAFC to take caution because the banks may go to court and obtain an injunction stopping them from any probe till whenever. The problem in the country right now is that our government is not well advised, that is reason they swing front and back in making policies and this is affecting the economy.

Also, another Lagos lawyer, Charles Lambo also affirmed to BusinessHallmark, that whatever the situation, RMAFC cannot probe banks for any unbecoming action.

“The RMAFC has no right to probe banks on the allegation that they failed to remit certain amount which was collected to government coffer. What they should do is for the RMAFC to report such matter to the appropriate authority, which in this case is the EFCC because it involves private entities which are the banks in question. The EFCC would carry out necessary investigations and come up with facts that would be made public, because the money involved is for the public. Then prosecution would be followed.

“RMAFC can also involve the legislature, who also has the right of an oversight functions on such matters as public funds. The legislature would invite banks’ Managing Directors to hear their own position and if they are found culpable, they would be handed over to face the law. The allegations should not be treated against the rule of law and due process so that we can begin to appreciate what is happening in this country” Lambo concluded.