Senate on amendment, approval galore

• Approves N70,000 minimum wage
• Amends Police Act, extends IGP’s tenure till 2027
• Passes N9.3tr 2024 Appropriation Amendment Bill

BY TUNDE OPALANA & HARUNA SALAMI

It was a gale of amendments and approvals as the Senate wielded its powers by amending the laws to enable approvals of certain critical bills.

Daily Times reports that these include: Approval of N70,000 as minimum wage, amendment of the Police Act to enable Inspector General of Police, Kayode Egbetokun originally scheduled for retirement on September 4 continue in office until 2027 as well as the passage of N9.3tr 2024 Appropriation Amendment Bill.

The National Assembly also passed amendment to the 2023 Finance Act with a proposed sharing formula that would allow the Federal Government to keep a lion share of 70% of the Windfall levy imposed on all foreign exchange transactions by banks in the country.

The levy which takes effect from January 2024 was sequel to the adoption of the report of its Joint Committee on Finance which also recommends a 10% penalty on defaulters who fail to remit government’s share of the Windfall Profit levy into the Federation Account.

Both chambers of the National Assembly agreed that a lion share of 70% of the windfall profit levy imposed on banks should go to the Federal Government, leaving the banks with the remaining 30%.

The National Assembly reached the sharing formula after it considered the report of its committee on Finance.

President Bola Tinubu had last week requested the National Assembly to amend the Finance Act that seeks to impose 50% Windfall Profit levy on all the foreign exchange transactions by banks in the country.

Interestingly, while the Federal Government had proposed a 50-50 sharing formula, the lawmakers increased the share of the Federal Government to 70%.

The windfall profit levy is to take effect from January 2024 with the National Assembly carefully avoiding making a retrospective law that would include 2023.

The Minister of Finance, Wale Edun has in the last two days led the FG economic team to defend the windfall profit levy, which he said is primarily aimed at redistributing money the surplus gains earned by banks as a result of change in government foreign exchange policy.

The Governor of Central Bank of Nigeria, who was represented at the stakeholders meeting on Tuesday supported the Windfall Profit levy, confirming that its earlier circular in March asking banks not to tamper with the windfall profits subsists.

The amendment by the National Assembly also imposed a 10% penalty on defaulters of the windfall profit levy at prevailing interest rate.

The Chairman, Federal Inland Revenue Service (FIRS), Zacch Adedeji, said the absence and silence of the banks on the matter can be taken as “consent”.

Also at the meeting, the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun disclosed that the Federal Government of Nigeria has injected palliatives worth N1trillion into the manufacturing sector within the last one year.

Chairman of the Federal Inland Revenue Service ( FIRS) Mr Zacch Adedeji highlighted efforts by the government to make viable, the manufacturing sector.

He said the Tinubu administration injected the accelerated stabilization fund aimed at reinvigorating the manufacturing sector stressing that this is aside series of legacy projects, geared towards putting in place infrastructure to strengthen the sector.

Edun who said the manufacturing sector should be considered as beneficiary from the proposed tax on banks foreign profits ( windfall tax ) , said the sector has already been taken care of .

“Palliatives worth N1trillion have been injected into the manufacturing sector within the last one year with attendant positive results in terms of reinvigoration”, he said

Earlier in his presentation to the joint committee chaired by Senator Sani Musa ( APC Niger East ) , the Chairman of FIRS, Zacch Adedeji , said the proposed one time windfall tax , is geared towards redistribution of wealth which according to him , would be beneficial to the various sectors .

He however explained to members of the joint committee that strategic programmes of President Bola Tinubu led federal government , are targeted at reinvigorating the manufacturing sector .

“Accelerated stabilization fund focusing on helping the manufacturing sector are already being doled out aside legacy projects strategically targeted at making the sector more vibrant and viable .

“Some of these strategic projects that would in terms of infrastructure , reinvigorate the sector , are the Badagry – Sokoto Highway which would make journey from Badagry to Sokoto 11hours

“Also, Lagos – Calabar Coastal Highway is another strategic road infrastructural project that will bring about the required connectivity for reinvigoration of the manufacturing sector.

“The plan of President Bola Tinubu on the economy , manufacturing sector and development generally is very robust “, he said.

President Tinubu had in an executive bill forwarded for approval by both chambers of the National Assembly , proposed 50% sharing formula for both parties , which some members of the committees , suggested for upward review .

Meanwhile the Senate on Tuesday equally passed President Bola Ahmed Tinubu’s N6.2 trillion 2024 Appropriation Act Amendment Bill.

This brings total money appropriated for the the 2024 budget to a sum of N35,055,536,770,218.

The passage was sequel to consideration of report of the Senate Committee on Appropriations on the 2024 Appropriation Act (Amendment) Bill presented by the Committee Chairman, Senator Olamilekan Adeola (Ogun West).

Break down of the amendment shows that N3.2 trillion is for capital expenditure while N3 trillion is for recurrent expenditure.

Senator Adeola , while presenting the report said President Tinubu transmitted to the Senate on Wednesday July 17, 2024 a Bill for an Act to amend the Appropriation Act, 2024 to provide for the sum of N6.2trillion with N3.2 trillion for capital expenditure and the sum of N3,trillion for recurrent.

The Bill was read the first and second time and referred to the Committee on Appropriations for further legislative action.

Adeola said the 2024 Appropriation Act (Amendment) Bill seeks to among others, make available additional funds for “Renewed Hope Infrastructure Development Projects”, to be undertaken across the country and to meet other recurrent expenditure requirements, such as the minimum wage increase necessary for effective governance of the Federation.

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He said “Considering the fact that the Committee was mandated to report back to the Senate on the Bill within one week, the Senate Committee on Appropriations consulted widely with the Leadership of the Committee and other critical stakeholders. More significantly, it met and deliberated with the Hon. Minister of Budget and Economic Planning and deliberated on the scope of the Bill, as well as, it’s source of funding the projects.

“Subsequently, the Committee processed the Bill together with its House counterpart, in line with relevant rules of legislative practice and procedures.

According to him, the Committee observed the need to provide the government equity component of the Renewed Hope Infrastructure Projects and other critical projects to be undertaken across the country and other recurrent expenditure requirements, like the provision for the new minimum wage, among others, which necessitated the request for the Amendment of the 2024 Appropriation Act.

On the revenue projection, Adeola said the additional expenditure contained in the Amendment Bill will be financed by the one-time windfall tax on banks’ foreign exchange profits for the year 2023 as approved by the National Assembly.

The Senate accepted the recommendation of the committee and approve the amendment of A Bill for an Act to authorize the issue from the Consolidated Revenue Fund of the Federation the total sum of N35,055,536,770,218.

Recall that the 2024 Appropriation Bill was passed into law by the National Assembly in the sum of ₩28,777,404,073,861 (Twenty- Eight Trillion, Seven Hundred and Seventy-Seven Billion, Four Hundred and Four Million, Seventy-Three Thousand, Eight Hundred and Sixty-One Naira, and was subsequently assented to by the President on 1st January, 2024.