The agency was established by the NASENI Act, Cap N3 LFN 2004 (the Act) enacted in 1992, which also created the NASENI Fund to be managed by the agency. The Act seeks to levy commercial companies and firms to complement the federal government in funding NASENI.
While the government is to contribute three per cent of the total revenue accruing to the Federation Account into the Fund, commercial companies and firms with income or turnover of N4million and above are required to contribute 0.25 per cent of turnover into the Fund
President Muhammadu Buhari, earlier this year had directed the minister of Finance, Budget and National Planning, and chairman of the Federal Inland Revenue Service (FIRS) to commence collection and remittance of the statutory levy due to the NASENI to enable it to achieve its mandate.
Following the directive, the NASENI governing board had increased the threshold to N100 million. While raising the prescribed threshold for compliance is desirable to reflect current realities, PwC said, it is tantamount to amending the law, which is the exclusive preserve of the National Assembly.
Asides this, the tax expert in a note, said: “as business are yet to recover from the adverse effect of COVID-19 pandemic, the activation of the Levy is untimely and should be reconsidered. More fundamentally is the compounding of the multiple taxation burden on businesses by the Levy in addition to the extant tertiary education tax (two per cent of assessable tax), Nigerian Police Trust Fund levy (0.005 per cent of net profit) and NITDA levy (one per cent of profit before tax payable by designated companies) in addition to 20 per cent and 30 per cent corporate income tax rates payable by medium and large companies, respectively.
“If the Agency had been operating since its establishment in 1992 without the Levy from taxpayers, the question is why is the levy being pursued at this time? With three per cent allocation from the Federation Account, the agency should not be looking up to taxpayers for additional funding.”
If three per cent allocation is not forthcoming from the Federation Account, the Agency should operate as a business and fund its operation with the fees that Section 20(e) of the Act authorizes it to charge for its services, he stressed.