Kunle Aderinokun
19 May 2008
Abuja — Should proceeds from "signature bonus" paid by bidders for oil blocks, dividends paid by the Nigerian Liquefied Natural Gas Company Limited (NLNG) in respect of shares of the Federal Government, and incomes from the sale of landed properties held by the Federal Government be regarded as "federally collected revenue" and shared with the states?
These are some of the knotty issues to be untied by the Supreme Court as seven states of the federation are ready to tackle the Federal Government over N546.37 billion being their share of revenues expected to have accrued to the Federation Account between 2004 and 2007 which they alleged were not being remitted to them.
The amount also includes 7 per cent and 4 per cent cost of collections for the Nigeria Customs Service (NCS) and the Federal Inland Revenue Service (FIRS) respectively, claimed to have been deducted from their revenues.
The states are Abia, Bauchi, Benue, Niger, Ogun, Oyo and Osun.
They are claiming that the Federal Government had collected the revenues on their behalf and the remaining states of the Federation and refused to pay same into the Federation Account for distribution.
Counsel representing the states in the suits in which the Attorney-General of the Federation, Chief Mike Kasse Aondoakaa, SAN, is the defendant are Chief Adegboyega Awomolo, SAN, Alhaji Yusuf Ali SAN, Mr. D. D. Dodo, SAN, Dr. Konyinsola Ajayi SAN, Prof. Yemi Osinbajo, SAN, Chief Chris Uche, SAN, Prof. Yemi Akinseye and Mr. Ogunmuyiwa Balogun.
The states are alleging that the Federal Government had breached the constitutional provisions by not forwarding what they regarded as their entitlements to them and are demanding the refund of N76.36 billion, N25.77 billion, N91.98 billion, N91.89 billion, N96.14 billion, N81.06 billion, N97.23 billion and N77.92 billion for Abia, Bauchi, Benue, Niger, Ogun, Oyo and Osun respectively.
THISDAY learnt that other states may join the suit and file in their claims.
According to documents (civil summons) served on the Attorney-General of the Federation by the respective states and which copies were obtained by THISDAY, they are claiming that the Federal Government has violated the provisions under section 162 of the 1999 Constitution of the Federal Republic of Nigeria by refusing to remit to them revenues that had accrued from Excess Crude Proceeds, Signature Bonus, Sales of Government Properties, Cost of Collection from Revenue Agencies, Waivers and Concessions, NLNG Dividends, Privatisation Proceeds, Education Tax Proceeds and other Dividends and IGR between 2004 and 2007.
Section 162 (1 & 3) of the 1999 Constitution of the Federal Republic of Nigeria states: "The federation shall maintain a special account to be called the Federation Account, into which shall be paid all revenues collected by the government of the federation except personal income tax of the members of the armed forces, police, workers in the foreign affairs ministry and the residents of the FCT.
"Any sum standing to the credit of the Federation Account must be distributed among the federal, state and the Local Government Councils on such terms and in such a manner as may be prescribed by the National Assembly."
The revenues which were generated between 2004 and 2007 and which, they alleged, had not been shared in accordance with the constitutional provision included: US$2.154 billion that had accrued to the Federal Government from signature bonus paid by bidders for oil blocks and applicants for oil prospecting and mining licences; US$923.97 million accrued to the Federal Government from dividends declared and paid by the Nigerian Liquefied Natural Gas Company Limited (NLNG) in respect of shares of the NLNG held by the FG, through the NNPC; N155.90billion accrued to the Federal Government from the sale of landed properties held by the Federal Government and N511.19 billion accrued to the Federal Government from the privatisation of public enterprises.
Others are: not less than N109.12billion from the proceeds of Education Tax levied; not less than N291.00billion from internally generated revenue of Federal Ministries and Agencies and income or return by way of dividends received in respect of shares or interests held by the Federal Government in companies (other than NLNG) and statutory bodies (other dividends); a balance of N5.512trillion from the sum of N6.220trillion where Federal Government has only distributed N708billion; upfront deductions amounting to N99billion made from the Federation Account and paid over to the FIRS and the NCS.
In the respective statements of claims filed at the Supreme Court between March and May 2008, the states argued that the Federal Government wrongly classifies incomes from those sources of revenue as its "Independent Revenue" and does not pay same into the Federation Account which is a contravention of the provisions of Section 162 (1&3) of the 1999 Constitution.
The suit numbers are Abia State (SC 59/2008), Bauchi (SC 60/2008), Benue (SC 123/2008), Niger (SC 122/2008), Ogun (SC 120/2008) and Oyo (SC 61/2008).
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