No good deed goes unpunished, and for the Nigerian Security Printing and Minting Company Plc. (NSPM) in Abuja, a failure to deduct and remit taxes has landed them in hot water with auditors.
A recent audit obtained by The News Chronicle unearthed a significant financial oversight, highlighting a chink in the company’s internal control armor.
The crux of the matter revolves around a hefty sum of N66,937,619.59 (Sixty-six million, nine hundred and thirty-seven thousand, six hundred and nineteen naira, fifty-nine kobo) in Pay As You Earn (PAYE) deductions.
This amount, owed in respect of ad-hoc and locum staff for the 2020 wages, appears to have slipped through the cracks, neither deducted nor remitted to the relevant tax authorities. Auditors noted a striking absence of explanations for this non-deduction, leaving a gaping hole in the financial records.
This lapse, according to the audit report, is a direct contravention of established financial regulations. Section 2(1) of the Personal Income Tax Act (PITA), 2004 (as amended), clearly stipulates the deduction of tax from an individual’s total income. Furthermore, paragraph 235 of the Financial Regulations (FR), 2009, is crystal clear: “Deductions for WHT, VAT and PAYE shall be remitted to the Federal Inland Revenue at the same time the payee who is the subject of deduction is paid.” It seems NSPM missed this memo, or perhaps simply let it gather dust.
The repercussions of this oversight are far from trivial. The audit report paints a grim picture of potential risks, including a substantial loss of government revenue and an increased difficulty in funding the government budget – a double whammy for the nation’s financial health.
When confronted with these findings, the management of NSPM remained tight-lipped, offering no response to the raised issue. This silence, however, speaks volumes, as the auditors have declared the findings valid until their recommendations are acted upon.
To set the house in order, the auditors have laid out a clear path forward. The Managing Director of NSPM is being called upon to provide a detailed justification to the Public Accounts Committees of the National Assembly for the non-deduction and remittance of the aforementioned N66,937,619.59.
Furthermore, the company is tasked with recovering this substantial sum and promptly remitting it to the appropriate tax authorities. As a final step, evidence of this remittance must be forwarded to the Public Accounts Committees of the National Assembly.
Failure to heed these recommendations could see NSPM facing the music. The audit report clearly states that “Otherwise, sanctions relating to failure to collect and account for government revenue specified in paragraph 3112 of the Financial Regulations 2009 should apply.”
