Business
Nigeria House of Reps Orders GTBANK to Remit 8 Years of Unpaid VAT on Remita Commission
The House of Representatives has directed Guaranty Trust Bank (GTBank) to calculate and remit Value Added Tax (VAT) on commissions received from transactions on the Remita platform between 2015 and 2022. This order comes amid an ongoing investigation into revenue leakages related to the Federal Government’s payment gateway system, Remita.
Rep. Bamidele Salam (PDP-Osun), Chairman of the Public Accounts Committee (PAC), issued the directive following a review of the bank’s records during a hearing on Thursday. The committee’s probe, sparked by concerns over potential non-compliance with financial regulations, centers on the bank’s failure to remit VAT during the initial phase of Remita transactions.
Committee Uncovers VAT Lapses:
The PAC’s resolution to compel GTBank to remit the unpaid VAT followed its analysis of the bank’s documentation and testimony from its management. The committee raised red flags about the apparent lapses in VAT remittance during the bank’s handling of commissions earned from the Remita platform. Beyond the VAT issue, the investigation is also examining broader compliance issues, including adherence to the standard operating procedures for financial transactions.
GTBank’s Defense:
In response, GTBank’s Executive Director, Ahmed Liman, explained that the bank had assumed Remita was responsible for deducting VAT before distributing commission fees to the bank.
“We believed that Remita had deducted the necessary VAT before sharing the fees among the involved parties,” Liman stated, adding that the bank collected a commission of 0.75% on payments processed via the Remita platform.
He further disclosed that in 2018 alone, GTBank received over ₦254 million (₦254,489,013) from the Accountant General through Remita, reinforcing the need for accurate reconciliation of the unpaid taxes.
Other Banks Under Scrutiny:
GTBank is not the only financial institution under investigation. Representatives from Keystone Bank, Zenith Bank, Sterling Bank, Polaris Bank, FCMB, Ecobank, and Wema Bank also appeared before the committee for similar inquiries into their handling of VAT on Remita commissions.
The Public Accounts Committee has referred these banks to its reconciliation sub-committee to address discrepancies in their records. Once reconciliations are completed, the banks will be called back to present their findings.
The Role of Remita:
Remita, developed by SystemSpecs, is a key financial gateway used by the Federal Government for revenue collection from Ministries, Departments, and Agencies (MDAs). The platform facilitates the remittance of various taxes, including VAT, Pay As You Earn (PAYE), and Withholding Tax, into the Treasury Single Account (TSA). It also supports the remittance of pension contributions and the delivery of schedules to Pension Fund Administrators and Custodians.
Remita is widely used for both government and private sector payments, making it a crucial part of Nigeria’s financial infrastructure. However, the ongoing investigation highlights significant concerns about compliance and transparency in the financial operations surrounding the platform.
As the investigation continues, the House of Representatives is keen to ensure that all revenue leakages are addressed, and that funds owed to the Federal Government are promptly recovered.
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