How banks evade billions payable to govt – Reps
The House of Representatives said it has found that banks in Nigeria deliberately inflate their operating costs in order to pay less tax.
The House's Committee on Finance, which is probing tax remittances, tax assessments and payments by banks, accused the banks of violating laws, making false declarations and distorting information, among others.
Committee Chairman Abdulmumin Jibrin, who spoke at the weekend, also wondered why some banks seemed determined to either mislead or confuse the committee as balances reported in the published audited accounts of some of them showed huge variance with the figures submitted to the committee.
The committee, Jibrin said, also found that data submitted to the CBN in the banks' monthly returns on the same issues were different from what they presented to the committee for investigation.
According to him, the committee is not making any wide allegations but is raising substianted facts.
He said that the the documents submitted by the banks were analysed with capacity support from the United Kingdom's Department for International and Development (DFID), National Assembly Budget and Research Office (NABRO) and reputable professionals in the industry in conducting the investigations.
His words, 'Preliminary findings show a poor quality of returns by the banks, discrepancies in data submitted, outright refusal to present documentary evidence, blanket violations of existing laws, self exemption from existing rules, false declaration, manipulation and distortion of information among others.
'These despicable acts of gross misconduct clearly depict the unscrupulous and roguish character of some banks and their Chief Executive Officers. For the Committee on Finance, this is unacceptable.
'For instance, balances reported in the published audited accounts of some banks show huge variance with the figures submitted to the Committee. The data submitted to the CBN in their monthly returns on the same issues were found to be different from what was tendered before the Committee.
'Even more embarrassing are the inconsistencies and huge variances in some data provided in different pages of documents submitted, thus leaving the committee to conclude that many banks blatantly engage in the creative accounting technique of inflating their operating costs to reduce their exposure to taxes.
'Furthermore, some banks have also created exemption rules for themselves in total disregard for the provisions of extant tax laws, particularly violations of the stamp duty, withholding tax and VAT acts.
'Some chief executives deliberately refused to sign the templates, obviously evading presentation of the documents under oath, in line with legislative procedure. Similarly, key information and data were omitted.
'Such data include details of staff PAYE and utilities with tax implications, etc. There are also many cases of late remittances or outright failure to remit money collected on behalf of government.
'Generally, returns made so far by the banks are incomplete, as the order of presentation was contrary to the guidelines provided in the template. Clearly, this is aimed at misleading the committee.
'Documentary evidence requested was also provided in a haphazard manner.'
He said that only six out of the 21 banks under scrutiny have supplied information requested, though with certain queries to answer.
But the lawmaker expressed his surprise that against banks' tradition of attention to details, 15 banks suddenly found it convenient to provide poor and incomplete documentation.
'It is obvious that over the years, government has lost billions of naira in fraudulent and underhand dealings corruptly designed by some banks to evade tax.
'This is in addition to being massively and callously shortchanged by banks saddled with the responsibility of collecting and remitting taxes,' he noted.