One of the main challenge facing the Nigeria Police is funding. President Muhammadu Buhari recently signed a new Act that creates additional source of revenue for the Nigeria Police. The Nigeria Police Trust Fund (Establishment) Act, 2019 aims to create a special intervention fund for the training of the Nigeria Police personnel, provision of equipment, amenities, and maintenance of police stations. Five major categories of contributors to the Nigeria Police Trust Fund (“NPTF” or “the Fund”) are;
- The Federation account
- Grants, donations, assistance from the public sector, private sector and international agencies
- Investment income from the funds
- Special intervention fund and any initial grant
- Companies operating in Nigeria
Contribution from the Federation account as well as the private sector have a fixed rate. 0.5% of the monies accruing to the Federation account is for the NPTF. Also, businesses in Nigeria are to pay a levy of 0.005% of net profits. That is a contribution of NGN50 per net profit of NGN1,000,000. A dedicated bank account known as the Nigeria Police Trust Fund Account will be opened for receipts and payments. In addition, any investment income generated from the Fund is exempt from income tax.
Members of the Board of Trustees (BOT) will be responsible for managing the funds. The President of Nigeria has the right to appoint members into and remove person(s) from the BOT.
The Nigeria Police Trust Fund (Establishment) Act, 2019 was signed into law on 24 June 2019. Unless extended for an additional period, the Act will operate for an initial period of 6 years from the commencement of the Act.
The Act is however silent on the penalty for non-compliance and deadline for remitting contribution. For instance, is the due date for filing the income tax returns the same as the one NPTF returns? Are companies required to file an annual NPTF return to the Fund or the Federal Inland Revenue Service?
A copy of the Act is available here.
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