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JTB, FIRS kick against NIPOST reform bill

The Joint Tax Board (JTB) and the Federal Inland Revenue Service (FIRS) have kicked against some aspects of the Nigerian Postal Commission bill, saying the bill, if passed in its current form, would empower the Nigeria Postal Service (NIPOST) to encroach on their responsibilities and impose double taxation on Nigerians.

 

The opposition came at a public hearing on a Bill for an Act to repeal the Nigeria Postal Service Act and establish the Nigerian Postal Commission and make provisions for the development and regulation of postal services in the country. The public hearing was organised by the Joint Committees on Communications of the Senate and House of Representatives.

 

The bill, sponsored by the Chairman, Senate Committee on communications, Sen. Oluremi Tinubu , proposes an expansion of the current objectives of NIPOST, to cover implementation of a National Postal Policy, encouraging local and foreign investment in the postal industry, protection of rights and interests of service providers in the sector, provision of postal services to areas and towns that were hitherto not sustainable, promoting small and medium enterprises in the sector, while engendering innovation, integration and inclusion in keeping up with current trends.

 

The bill also provides for the unbundling of NIPOST by splitting the roles of the Nigerian Postal Service also referred to as the Public Postal Operator (PPO), whose responsibility shall be the provision of Universal Postal Services in Nigeria; and the Nigerian Postal Commission (NPC), another corporate body which shall have the sole responsibility of regulating and supervising the postal sector. In a memorandum presented to the committee, FIRS said that if the bill is passed in its current form, it will create multiple tax agencies at the federal level.

 

Similarly, the Joint Tax Board (JTB) said that as the apex body for tax administration in Nigeria, it has a statutory mandate to ensure uniformity, harmony and efficiency in the administration of taxes in  the thirty-six (36) states of the Federation and the Federal Capital Territory.

 

Executive Secretary of Joint Tax Board (JTB) Mrs. Nana-Aisha Obomoghie, argued that certain provisions of the bill need to be reworked to ensure clarity in respect of stamp duties, specifically the collection, production of stamps and electronic payment for stamps.

 

She said that a refinement of the bill will also ensure alignment with the provisions of the Constitution in respect of the mandate of states to collect stamp duties for transactions between individuals.

 

“Our general observations in respect of the bill are: It replicates (and muddles) provisions regarding collection of Stamp Duties that are already contained in the Stamp Duties Act (SDA). It encroaches on the role and duties of State Revenue Authorities regarding denoted stamps. It provides for wide and poorly articulated sections on electronic transactions.

 

It seeks to impose an additional tax burden on companies in the sector with the attendant risk of depleted revenues to the Federation account and monies shared by States of the federation.

 

As presently contained, it will usher in confusion and non-clarity concerning collection of Stamp Duties if passed,” she said.

 

Section 13(b) of the proposed bill states that “the Public Postal Operator shall be the only competent authority to charge and collect proceeds from the sale of adhesive and or electronic stamps for the purpose of denoting, authenticating and validating receipts, documents and other instruments in accordance with the “stamping protocol.”

 

However, the JTB argued that that provision runs counter to section 4(2) of the Stamp Duties Act (as amended) which states that “the Relevant Tax Authority in the state shall collect duties in respect of instruments executed between persons or individuals at such rates to be imposed or  charged as may be agreed with the Federal Government”.

Obomoghie said this provision was not only misleading, but also a misrepresentation that the proposed Nigerian Postal Commission is mandated to administer the collection of Stamp Duties and to deal with all issues concerning ‘stamping protocol’ to the exclusion of state revenue authorities. She also kicked against Part XXIV, Section 76 of the bill which provides for two per cent (2%) of turnover annual levy charge.

“The honourable committee should note that the proposed 2% of turnover of operators within the Postal sector, referred to in the bill as ‘annual levy’, is to be remitted to the proposed commission.

 

What this achieves is that it imposes a further burden on Companies’ turnover, which this honourable house has graciously reviewed downwards via the Finance Act 2019, in line with the objectives of the National Tax Policy which seeks to reduce income taxes, while reviewing indirect taxes upwards.

 

“This two percent (2%) charge will also further reduce the monies accruable to the Federation Account, because after making the 2% levy payment to the Postal Agency, the monetary value is removed from the total profit of a company, and this reduces the chargeable profit, with the implication being less companies income remitted to the Federation Account, and inherently less funds to be shared amongst the states,” she said.

 

Obomoghie urged the National Assembly to allow the NIPOST (and the proposed Nigerian Postal Commission) to carry out its primary function of superintending over the nation’s postal and postcode administration, while allowing the Tax Laws to guide and provide for the administration of tax from the profiling of taxpayers, assessment to tax, collection of tax, as well as accounting for all taxes collected, for the collective benefit of all Nigerians, and for the economic survival of the country.

 

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