The House of Representatives Committee on Tertiary Education Trust Fund (TETFund) has summoned Commercial Banks over alleged under remittance of Education Tax (EDT).
The committee also asked the Banks to appear alongside their tax consultant to reconcile the EDT computation not remitted to TETFund by the bank between 2011 and 2022.
The Chairman of the Committee, Mariam Odinaka Onuoha gave the directive when some banks appeared before the committee to defend their EDT remittances in Abuja.
She alleged that there were disparities in the EDT remittances submitted by the Banks to the FIRS over the years, adding that what was computed by the banks auditors did not tally with tax consultants.
“The bone of contention has always been that the banks seem to be relying on a purported exemption order which clearly mentioned company income Tax exemption order of 2011. We have asked the banka to produce an EDT exemption order and they have failed to present it, we have equally presented to them but you cannot liking one exception with the other. Because EDT was not mentioned in whatever you have shown and that has been the reason for the back and forth,” Mrs. Onuorah said.
The chairman however said out of the 15 banks invited, about seven were supposed to appear before the committee, but only three of them showed up with three others writing to seek a new date to appear.
Deputy Chairman of the committee, Mr Bappa Aliyu Misau observed that First Bank, under- remitted its EDT deductions to TETFund, an action which he said was punishable under the law.
Misau said “unfortunately, we do not have the year-by-year breakdown. But the available records you submitted in 2011 was N603,801. Then, in 2012, you owed N301,263,135, in 2013, you have a credit balance of N102,713,615.
“Again, in 2014, you had a credit of N2.933, 659, then if you go to 2015, you have N25 million as outstanding, in 2017, N169, 852,600 outstanding, in 2018 you have N98 million outstanding.
“In 2012, you paid N7.877,451 debit then in 2020 N148 million credit, in 2021, N269,618,626.6 debit. Therefore, in 2022, you had N3.748,984, 654.64.
” Then you add it up, you sum the credit and the debit, you end up with N3.749,353,260 outstanding. You know there is a penalty for Non-Remittance.”
Mr Bashir Yusuf, an Executive Director with First Bank, who represented the bank at the meeting told the lawmakers that between 2011 and 2022, the Bank posted a Profit Before Tax (PBT) of N795,123 billion.
When asked to take the figure year by year, the FBN executive director said, it was a summary of the presentation.
“Unfortunately, what I have is the summary of the presentation. I crave the indulgence of the committee to take what we shared with the Committee.
I prepared the summary for the presentation, so that if there are issues, we can take those issues, especially if there are matters that we need to settle outside the Committee room, our consultants.
“So, I am very sorry, I don’t have the breakdown by year, but I have the summary over the period. We had the net accessible profits of N28 billion, which is the difference between the allowable and the disallowable expenses on the PBT we posted over the period.
“In terms of tax liability over the period, we have a tax liability of N5.498 billion.
“Then, over the periods of the audit by the Committee, that is 2011 to 2022, we had additional assessments. It was on the basis of those assessments conducted between 2014 and 2021 that we had an additional liability of N852 million.
“So, in terms of total TETFUND Tertiary Education Tax Fund liability and payment, we made a payment of N5.493 billion.
*And in terms of outstanding liability over the period, we have Nil liability over the period and other subsequent items associated with outstanding liability are also ready.”
He said further that there were issues that cannot be resolved at the committee hearing, adding that “what you have are items that are classified as taxable. We have some differences based on the provision of exemption order that was issued by the President in 2011.
“That’s why I said some of these issues we will not be able to resolve at this sitting.
“It is good we have time, and I believe this does not just apply to First Bank, because it’s an issue that applies to other banks as well. Our consultants have been interacting overtime and the issue of the exemptions that are provided for in the Presidential order of 2011 that exempts certain categories of incomes from tax.
“Based on that Presidential order issued in 2011, there are certain categories of incomes that are exempted from tax. Some of them include; Short Term Investment income from Short Term Government Instruments and Securities such as Treasury Bills, Promissory Notes ,Bonds issued by federal, states and local governments and Bonds issued by Corporate bodies including Supra-Nationalities.
“The last item are interests earned by holders of the Bonds on Short Term Securities.
“By the time you take into consideration, income earned from these instruments over the period of the audit of the Committee, the difference between the submissions we have made Committee and the submissions you have in your records will be identified and we will be able to reconcile. It will be zero, we are very sure.”
The President, Academic Staff Union of Universities, Prof Victor Osodeke, berated banks over education tax evasion and under remittances.
He commended the committee for its stance to ensure that banks complied with it’s order on education tax
The hearing followed a motion moved by Mr. Oluwole Oke asking the banks to appear before the committee with the tax consultants with details of tax computation on a yearly basis.
