His Excellency, President Muhammadu Buhari (GCFR), signed the Nigeria Police Trust Fund (Establishment) Act (NPTF Act or the Act), 2019 into law on 24 June 2019.
The NPTF Act establishes the Nigeria Police Trust Fund (“the Trust Fund”) to receive funds from various sources, which will be utilized to:
Section 3 of the NPTF Act establishes the Trust Fund as a body corporate with perpetual succession and a common seal, which may sue and be sued in its corporate name. However, Section 2 of the Act provides for a 6-year tenure for the Trust Fund, effective from the date of commencement of the Act, after which the Trust Fund shall cease to exist, unless it is extended for any period by an Act of the National Assembly.
Section 4(1)(b) of the Act provides for various sources of funding for the Trust Fund, including:
The NPTF Act also establishes the NPTF Board of Trustees, which will be responsible for investing money accruing to the Trust Fund, setting policies for training and retraining of personnel of the NPF, and so on. The Act exempts the Trust Fund from the payment of income tax on any income accruing from investments made by the Trust Fund.
The Federal Government’s decision to establish the NPTF to strengthen the NPF is a welcome development. If properly administered, it can greatly improve the working and living conditions of the NPF personnel and equip them for effective performance of their statutory responsibilities. However, it is another instrument of multiple taxation of Nigerian businesses which, in addition to their regular 30% corporate income tax, are currently saddled with payment of 2% of their assessable profits as tertiary education tax and, depending on their industry, 1% of their profit before tax as National Information Technology Development Agency (NITDA) levy (payable by companies in the financial and information and communications technology industries), and 1% of their contract value as Nigerian Content Development Fund levy (payable by companies operating in the oil and gas industry), etc.
In addition, we have highlighted below the potential practical challenges associated with the implementation of the Act, which require urgent attention:
In the final analysis, contributors to the Trust Fund and the entire nation would be interested in the judicious use of the funds, the resulting impact on the strengthening of the capacity of the NPF evident in the improvement of the security situation in the country, and full accountability by those charged with oversight of the funds.
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