Reps Uncover ‘Massive Tax Fraud’ in Banks
A House of Representatives committee has uncovered what it called massive tax fraud by 21 commercial banks in the past seven years.
The House Committee on Finance, which has been probing tax remittances to government coffers by banks between 2006 and 2013, said yesterday this was part of the findings of its investigation.
Chairman of the committee, Rep Abdulmumin Jibrin (PDP, Kano), who released the initial findings in Abuja yesterday, said commercial banks have dubiously turned taxes collected on behalf of the government into another venture.
He said in a statement that “balances reported in the published audited accounts of some banks show huge variance with the figures submitted to the committee, and 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.”
Jibrin, who did not mention the amount involved, said, “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 short-changed by banks saddled with the responsibility of collecting and remitting taxes.”
He said it was also discovered that some banks 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, with some chief executives deliberately refusing to make available the required information to the committee.
He said there were inconsistencies and huge variances in some data provided in different pages of documents submitted to the committee, thus making it “to conclude that many banks blatantly engage in the creative accounting technique of inflating their operating costs to reduce their exposure to taxes.”
“Preliminary findings show a poor quality of returns by the Banks, discrepancies in data submitted, outright refusal to present documentary evidence and blanket violations of existing laws, self exemption from existing rules, false declaration, manipulation and distortion of information among others.
“There are also many cases of late remittances or outright failure to remit money collected on behalf of government. 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,” he added.