The House of Representatives will on resumption from its annual vacation consider a bill seeking the establishment of a Tertiary Hospital Development Tax Fund which is expected to make funds available for the management of teaching and specialist hospitals in the country.
When established, the Fund is expected to be used for the purpose of development, provision, upgrade, maintenance of infrastructure, facilities and equipment and personnel training in Tertiary hospitals in Nigeria which shall be managed by the Board of Trustees established under the bill.
The bill sponsored by Ogunlola Olubunmi (APC, Ekiti) scaled through First Reading before the House embarked on vacation in July and has been gazetted for Second Reading.
The proposed law provides that the fund, when established will draw funds from “tax at the rate of one percent shall be charged on the assessable profit of a company registered in Nigeria.”
It also provides that the assessable profit of a company shall be ascertained in the manner specified in the Companies Income Tax Act or the Petroleum Profits Tax Act as the case may be.
It states that: “Without prejudice to the provision of subclause (3) of this clause, section 60 of the Petroleum Profits Tax Act shall not apply to the assessment, collection and payment of tertiary hospitals development and all Companies chargeable to tax under the Petroleum Profits Tax Act shall be liable to pay the full extent of the tax imposed under this bill.”
For ease of collection, the law seeks to empower the Federal Inland Revenue Service (FIRS) to “assess and collect from a company the tax imposed by this bill”, adding that the bill in Clause 2(2), the tax imposed shall be due and payable within 60 days after the Service has served notice of the assessment on a company.
The Board of Trustees to be established is expected to monitor and ensure collection of the tax by FIRS and ensure the transfer of same to the coffee of the Fund; manage and disburse the accrued revenue; liaise with the appropriate ministries or bodies responsible for the collection or safekeeping of the tax; receive requests and approve admit table projects after due consideration as well as ensure disbursement of funds to various public Federal and state tertiary hospitals in Nigeria.
The Board of Trustees will also be empowered administer, manage and disburse the tax imposed on the basis of funding of all Federal and state tertiary hospital with counterpart funding of 40% from beneficiary State Governments; equality among the 6 geopolitical zones of the Federation in case of special intervention and regular intervention; monitor and evaluate the execution of projects; invest funds in appropriate and safe securities; update Federal Government on its activities and progress through annual and audited reports and review progress and suggest an improvement.
In addition, the law will also empower the Board to do such other things as are necessary or incidental to the objects of the Fund or as may be assigned by the Federal Government; make and issue guidelines from time to time to all beneficiaries on disbursement from the Fund on the use of monies received from the Fund; and generally regulate the administration, application and disbursement of monies from the Fund under this bill.
The bill provides that a person who contravenes or fails to comply with the provisions of the bill is guilty of an offence if a tax due under Clause 2 is not paid within the time specified, hence empowers FIRS to serve the company a demand note for the unpaid tax plus a sum which is equal to 5 percent of the tax and if the sum demanded is not paid within two months, the company is guilty of an offence under the bill.
It makes provision for the punishment of those who contravene the provisions of the law saying “a person found guilty on conviction shall be liable: for a first offence, to imprisonment for a term of 6 months or fine up to N1 million or both; and for a second and subsequent offence to imprisonment for a term of 12 months or to a fine up to N2 million or both.”