The National Agency For Science And Engineering Infrastructure Levy

Since its enactment in 1992, the funding provisions of the NASENI Act have not been fully implemented, especially concerning the levy on commercial companies and firms that meet the ₦4 million turnover threshold. Consequently, His Excellency, President Muhammadu Buhari, GCFR, during the NASENI Governing Board meeting on 26 January 2021, directed the Honourable 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 Presidential directive, the NASENI Governing Board ("the Board") has increased the threshold to ₦100 million. While raising the prescribed threshold for compliance is desirable to reflect current realities, the action of the Board is tantamount to amending the law, which is the exclusive preserve of the National Assembly.

Commentary

As businesses are yet to recover from the adverse effect of the 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 extent tertiary education tax (2% of assessable tax), Nigerian Police Trust Fund levy (0.005% of net profit), and NITDA levy (1% of profit before tax payable by designated companies) in addition to 20% and 30% 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 a 3% allocation from the Federation Account, the Agency should not be looking up to taxpayers for additional funding. If 3% 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.

While it is up to the Agency to seek the amendment of the Act by the National Assembly, as it lacks the power to vary the threshold for compliance, the National Assembly should give due consideration to the preceding issues in the interest of all and sundry. In the meantime, it is hoped that the Board will suspend further action on the enforcement and collection of the Levy.

Credit: KPMG Articles

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