STATES MAY RECEIVE FEDERAL TAXES AS REPS TO DECENTRALIZE BENEFITS.

States in the country may soon begin to benefit from federally collected taxes to fulfill aspects of the constitution.

This is because the House of Representatives on Wednesday passed for second reading a Bill for an Act to provide for the distribution and payment to State Governments of some taxes and duties collected by the Federal Inland Revenue Service (FIRS).
The Bill seeks to give effect to the provisions of Section 163, of the 1999 constitution of the Federal Republic of Nigeria (as amended) as it relates to the distribution and allocation of other revenues.
Speaking during plenary, sponsor of the Bill, Mr. Hazeez Akinloye (APC, Lagos) said the provision of the constitution relates to the powers of the National Assembly to make laws in matters of collection in taxes.
Akinloye explained further that as it relates to capital gains, profits of persons other than the company, stamp duties to be remitted to the States where the properties subject to stamp duties are situated or where the payee of the capital gains resides.
According to him, upon collection of such taxes by the FIRS, a certain percentage of such collections are remitted to the States affected and the FIRS retain some.
“This is intended to achieve fiscal federalism in Nigeria and make the FIRS more accountable and transparent with no financial responsibility on the federal government”, Akinloye said.
Contributing to the debate, Mr. Mukaila Kazim (APC, Ogun) while supporting the Bill said it is very important as states now find it difficult to pay salaries.
“It will boost the financial status and revenue of States if taxes are paid on time”, Kazim said.
The Bill consists of six Clauses and of importance in the provisions is clause two which seeks to fix the quantity of the net proceeds to not exceeding 5% of the total sum collected.
Clause three of the Bill stipulate a time frame of not exceeding 14days after the end of the particular quarter within which the amount so collected shall be remitted.
The House therefore adopted the Bill through a voice vote put up by Speaker Yakubu Dogara and referred it to its committee on Finance for further legislative input.