RMAFC Shoots Down Police Trust Funding Request
- Describes as illegal 0.5% Federation Account deduction proposal
BY COBHAM NSA, ABUJA – The Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC) has shot down a proposal for 0.5 per cent deduction and transfer from the Federation Account revenue to the Nigeria Police Trust Fund (NPTF), describing the request as running foul of the 1999 constitution as amended.
The Commission’s stance is against the backdrop of a demand by the Minister of Police Affairs, Muhammad Dingyadi, conveyed in a letter to the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, seeking direct funding of NPTF from the Federation coffers.
Obviously urging the Police Affairs Minister to jettison his ambitious proposal, the RMAFC said provision in the Establishment Act 2019 of Police Trust Fund to deduct 0.5 per cent of the total revenue that accrues to the Federation Account is illegal and can therefore not be implemented.
In a statement issued in Abuja on Wednesday night, RMAFC acknowledged being copied the contentious letter by the Police Affairs Minister, but noted that a constitutional breach would be committed if such request is ever honoured by the Finance Ministry.
Giving further explanations on RMAFC’s objection to the Police request, Chairman of the Commission, Elias Mbam said the; “series of requests are in breach of the provisions of the Constitution”, and particularly, “inconsistent with the provisions of Section162(3) of the 1999 constitution as amended.”
According to Mbam, Section 4 (1) (a) of the Nigerian Police Trust Fund (Establishment) Act 2019, which imposes 0.005 per cent levy on all Nigerian businesses is also “inconsistent with the provision of the constitution cited above”.
“Any law that is inconsistent with the provisions of the constitution of the Federal Republic of Nigeria, that law shall be null and void to the extent of its inconsistency”, the RMAFC boss said
The quoted section of the constitution provides that all funds accruing to the Federation Account should be distributed among the three tiers of government, Federal, State and Local Governments, with each utilising its share to meet the respective financial needs and obligations.
“The only beneficiaries to the federation account are the Federal Government, State Governments and Local Government Councils in each state as provided in S. 162(3) of the constitution of the Federal Republic of Nigeria”, the Commission maintained.
The RMAFC Chairman, who cited the Supreme Court judgment to support the Commission’s position, said the nation’s apex Court had laid to rest the proper mode of distributing revenue that accrues to the Federation Account in the case between Attorney General of the Federation vs Attorney General of Abia State (No. 2)(2002)6 NWLR, Pt. 764. 542.
He said in the case; “The apex court declared as unconstitutional, null and void any other beneficiary from the federation that was not listed as first line charge”.
Those listed as qualified first line charge beneficiaries from the Federation Account include: funding for the judiciary; servicing of external debt; funding of joint venture contracts and NNPC priority projects; and allocation of one per cent of revenue in the Federation Account to the Federal Capital Territory (FCT).
The Commission said its response objecting to the request has already been forwarded to the Police Affairs Minister as a reminder that existing constitutional provisions do not accommodate the NPTF as part of beneficiaries from the Federation Account accruals.
In the controversial letter reacted to by the RMAFC, the Minister made reference to the NPTF Establishment Act 2019, which listed its sources of funding to include 0.5 per cent of the total revenue accruing to the Federation Account.
Also listed as sources of the Trust Fund’s funding are: 0.005 per cent of the net profit of companies operating as business in Nigeria; any takeoff grant, special intervention fund as may be provided by the federal, state and local governments in the federation.
Others include: such monies as may be appropriated to meet the objectives of the Act by the National Assembly in the Federal budget, aids, grant, and assistance from international bilateral and multinational agencies, non-governmental organisations and private sectors.
Similarly covered by the funding sources are: grants, donations, endowment, bequests, and gifts, whether of money, land or any other property from any source as well as monies derived from investments made by the trust fund.
To ensure robust revenue drive by the NPTF, Mr Maigari had requested the Finance Minister to issue directives to all relevant and appropriate authorities in charge of the Federation Account Allocation Committee (FAAC) to effect the monthly deductions in favour of the Trust Fund.
By his letter, the Minister had proposed that all monthly deductions in favour of the Police Trust Fund from the Federation Account should be transferred into its dedicated account effective January 2020.
This is in addition to the request that the Finance Minister should direct the Federal Inland Revenue Service (FIRS) to deduct and remit 0.005 per cent of the net profit of the companies operating in Nigeria to the Trust Fund as stated in the Act effective January 2020.
Aside seeking the Finance Minister’s consent to nominate a Federal Ministry of Finance representative into the NPTF’s Board of Trustees in line with its establishment Act, Alhaji Dingyadi had also demanded approval for the Accountant General of the Federation (AGF) to open a dedicated account for the NPTF with CBN for the purpose of warehousing the various remittances.