Nigeria: Reps Direct GTBank to Remit VAT on Remita Transactions to FG

The House of Representatives Public Accounts Committee has directed Guaranty Trust Bank (GTBank) to calculate and remit the Value Added Tax (VAT) on commission fees received from Remita transactions between 2015 and 2022 to the Federal Government.

Remita, a financial gateway technology, is used by the Federal Government to facilitate revenue collection for Ministries, Departments, and Agencies (MDAs) into the Treasury Single Account (TSA).

During an ongoing investigation into potential revenue leakages linked to the Remita platform, the committee, chaired by Bamidele Salam of the Ede South/Ede North/Ejigbo/Egbedore Federal Constituency in Osun State, issued the directive to GTBank. The investigation is also examining instances of non-compliance with standard operating procedures and service agreements related to Remita.

A significant concern raised during the inquiry was the non-remittance of VAT during the initial phase of Remita operations. GTBank’s Executive Director, Ahmed Liman, admitted that the bank had not remitted the VAT over an eight-year period. Liman explained, “We believed that Remita was responsible for distributing the commission fees and assumed they had completed the necessary VAT remittance before disbursing the funds.”

Liman also clarified that the bank charged a 0.75% fee from payers using the Remita platform and noted that GTBank received N254.49 million in 2018 from the Office of the Accountant General of the Federation through Remita.

Following this revelation, the committee ordered GTBank to calculate and remit the VAT on all commission fees earned through Remita from 2015 to 2022 into the Federal Government’s recovery accounts, held with the Central Bank of Nigeria (CBN).

Other banks, including Keystone, Zenith, Sterling, Polaris, FCMB, Ecobank, and Wema, were also called before the committee regarding similar matters. These banks have been referred to a reconciliation sub-committee to address discrepancies in their reports and are expected to reappear before the committee after resolving these issues.