How 21 banks defrauded FG through tax evasion, non-remittance of revenue

ABUJA—The House of Representatives has accused 21 banks in the country of defrauding the Federal Government of money running into billions of naira through tax evasion, non-remittance of tolls and falsification of official financial records, saying the heads of the banks had queries to answer.
Chairman, House Committee on Finance, Dr. Abdulmumini Jibrin, who disclosed this  weekend, listed the banks to include, CitiBank, Stanbic IBTC, Standard Chartered Bank, GT Bank, Access Bank and Zenith Bank.
Others are, First Bank, Union Bank, United Bank for Africa, Diamond Bank, Unity Bank, Fidelity Bank, Mainstreet Bank, Sterling Bank, Heritage Bank, EcoBank, FCMB, Wema Bank, Skye Bank, Enterprise Bank and Keystone Bank.
Jibrin said the committee decided to embark on closer and thorough scrutiny of the banks due to suspected sharp practices.
He said since the inception of the seventh assembly, the Committee on Finance had been inundated with reports on cases of tax evasion and sharp practices in tax remittances by banks.
According to him, the exercise commenced with series of engagements with the commercial banks.
He said: “Pursuant to the statutory mandate of the House Committee on Finance and its oversight functions over the Federal Inland Revenue Service, FIRS, and tax matters, the Committee on Finance has been investigating tax remittances, tax assessments and payments by banks.
“Consequently, the committee decided to bring the banks under close legislative scrutiny.”
He announced that some templates were distributed to the banks to fill after holding meetings with the chief executives but expressed surprise that the banks falsified documents to protect past shady deals.
He said: “As a fallout of two separate meetings with Chief Executives of the banks, three different templates were distributed to all commercial banks in the country to complete and submit to the Committee.
“In the last few months, the Committee has analyzed volumes of documents submitted by the banks and is pleased to announce that it has enjoyed tremendous capacity support from the DFID, NABRO and reputable professionals in the industry in conducting its revenue generation and remittances investigations.
“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.
According to Jubrin, the banks during the investigations submitted different audited monthly accounts to the Committee, aside from what were submitted to the CBN.
“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 document 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.”
The Lawmaker said the banks’ actions was an attempt to deceive and derail the Committee from doing a thorough work, stressing that the Committee won’t take it lightly with the banks.
He said: “These despicable acts of gross misconduct clearly depict the unscrupulous and roguish character of some Banks and their Chief Executive Officers.
“Clearly, this is aimed at misleading the Committee. Documentary evidence requested was also provided in a haphazard manner. For the Committee on Finance, this is unacceptable.”
“Out of the 21 Banks under scrutiny only 6 have so far completed and supplied all the information requested for in the proper format, albeit with certain queries to answer.
“The banks are, CitiBank, Stanbic IBTC, Standard Chartered Bank, GT Bank, Access Bank and Zenith Bank.
“The other Banks, besides poor and incomplete documentation, have questions to answer. They include First Bank, Union Bank, United Bank for Africa, Diamond Bank, Unity Bank, Fidelity Bank, Mainstreet Bank, Sterling Bank, Heritage Bank, EcoBank, FCMB, Wema Bank, Skye Bank, Enterprise Bank and Keystone Bank.
“All templates that are not signed by the CEO and CFO of the various Banks are of no consequence and will not be treated by the Committee. Chief Executives of such Banks must sign the templates and complete their outstanding checklists within 48 hours to set the stage for the last round of engagement between the Committee and the Banks.
“Between the 23rd and 27th of September, the Chief Executive Officers of the banks must appear in person to defend their templates in a technical session before the Committee.
“This exercise is being conducted in the most transparent manner as all such appearances will be broadcast live on television for Nigerians to see very clearly what the Committee is doing.
“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.
“At this point it is pertinent to note that since Government continues the yearly ritual of domestic borrowing to balance its budget deficit, it has become a bazaar for many Banks who provide such funds at outrageous interest rates and care less about the implication to the private and real sector, both of which continue to struggle to get the crumbs at a very high cost. Domestic borrowing by Government has denied the private sector access to affordable funds to grow their businesses and in the process generate employment and create wealth.
“Yet again, some reprobate Banks are involved in the criminal act of converting the huge funds in dormant accounts into profits, even with known and accessible next of kin. Why should they not pay their taxes in full and remit in full and promptly what they collect on behalf of Government?
The Committee on Finance expects maximum cooperation from the Banks in respect of this investigation. Anything short of this, the Committee will not hesitate to bring to bear the full weight of the law on such Banks. Government taxes all over the world are sacred and our tax revenues must be so treated through complete and timely remittances. Nigerians must know how well Banks are playing their role as tax collectors and how well they are discharging their responsibilities as tax payers.”
With the revenue challenges the Country is currently facing, it is imperative to look everywhere to plug all leakages in accruable Government revenue. The banking sector is one among other sectors that the Committee on Finance will be engaging. By all means at the end of this exercise, the committee will look at the various extant tax laws, introduce new clauses or make amendments where necessary in order to strengthen our tax system and block areas of leakage.
The general public and all well-meaning individuals are hereby invited and encouraged to assist the Committee in carrying out this crucial National assignment.”

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