Commission opposes 0.5% proposed deduction from Federation Account for police

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The Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC) on Wednesday opposed a request for 0.5 per cent of Federation Account revenue to be deducted and transferred to the Police Trust Fund (PTF).

The request was made by the Minister of Police Affairs, Muhammad Dingyadi, through a letter he wrote to the Minister of Finance, Budget and National Planning, Zainab Ahmed.

Mr Dingyadi is seeking a direct funding of the Nigeria Police Trust Fund from the Federation Account.


A copy of the letter sent to the Chairman of the RMAFC, Elias Mbam, made reference to the Nigeria Police Trust Fund establishment Act 2019, which listed its sources of funding to include 0.5 per cent of the total revenue accruing to the Federation Account.

The letter also listed other sources of the Trust Fund’s funding to include 0.005 per cent of the net profit of companies operating as business in Nigeria; any takeoff grant, special intervention fund as may be provided by the federal, state and local governments in the federation.

Other listed sources included such monies as may be appropriated to meet the objectives of the Act by the National Assembly in the federal budget, aids, grant, and assistance from international bilateral and multinational agencies, non-governmental organisations and private sectors.

The sources also covered grants, donations, endowment, bequests, and gifts, whether of money, land or any other property from any source as well as monies derived from investments made by the trust fund.

Mr Maigari requested the finance minister to issue directives to all the appropriate authorities in charge of the Federation Account Allocation Committee (FAAC) to effect the monthly deductions in favour of the Trust Fund.

He said all monthly deductions of the share of the Police Trust Fund from the Federation Account should be transferred into its dedicated account effective January 2020.

Mr Maigari also requested the minister to direct the Federal Inland Revenue Service (FIRS) to deduct and remit 0.005 per cent of the net profit of the companies operating in Nigeria to the Trust Fund as stated in the Act effective January 2020.

Also, he said the ninister should direct the Accountant General of the Federation to open a dedicated account for the Police Trust Fund in the Central Bank of Nigeria (CBN) for the the purpose of holding the remittances.

He also sought the approval of the minister to nominate a representative of the Federal Ministry of Finance into the Board of Trustees of the Trust Fund as stated in its establishment Act.

RMAFAC reacts

However, in his response, the Chairman, RMAFC, Elias Mbam, told the Minister of Police Affairs that “his series of requests are in breach of the provisions of the Constitution.”

Mr Mbam said listing the sources of funding for the Trust Fund to include 0.5 per cent of the total revenue accruing to the Federation Account “was inconsistent with the provisions of Section162(3) of the 1999 constitution as amended.”

The section directs that all funds collected in the Federation Account should be distributed among the three tiers of government – Federal, State and Local Governments in the Federation and their shares utilised to meet their respective obligations.

The provisions did not include the Nigeria Police Trust Fund as part of the beneficiaries from the Federation Account accruals.

Also, Mr Mbam told the police affairs minister that Section 4 (1) (a) of the Nigerian Police Trust Fund (Establishment) Act 2019, which imposes 0.005 per cent levy on all Nigerian businesses “was also inconsistent with the provision of the constitution cited above”.

The RMAFC boss said “any law that is inconsistent with the provisions of the Constitution of the Federal Republic of Nigeria shall be null and void to the extent of its inconsistency”.

He said the Supreme Court had laid to rest the proper mode of distribution of funds accruing to the Federation Account in the case between Attorney General of the Federation Vs Attorney General of Abia State (No. 2)(2002)6 NWLR, Pt. 764. 542.

In the case, Mr Mbam said, “The apex court declared as unconstitutional, null and void any other beneficiary from the federation that was not list as first line charge”.

Those listed as qualified as first line charge beneficiaries from the Federation Account included funding for the judiciary; servicing of external debt; funding of joint venture contracts and NNPC priority projects, and allocation of one per cent of revenue in the Federation Account to the Federal Capital Territory.

The RMAFC said it has already sent a response to minister of police affairs to object to his request.

The RMAFC is responsible for monitoring accruals of revenues into the federation account from various revenue generating agencies as well as disbursements of all the accruals to the three tiers of government.

RMAFC also gives advice to the federal, state and local governments on fiscal efficiency and methods by which their revenues can be increased.