Lagos University Teaching Hospital Pockets Over A Billion Naira in Taxes and Revenue

• The Lagos University Teaching Hospital has deprived Nigeria over a billion in revenue;
• Non-remittance of Revenue into CFR poses a huge threat to the country’s economic growth;
• Experts blame the Government, say procedural gaps and lack of implementation of the law are the causes of the discrepancies.

Why remit revenue and taxes to the government when you can pocket a cool ₦1.2 billion for yourself? When faced with the same choice, Lagos University Teaching Hospital chose the latter, the 2018 Audit Report reveals. Nevermind this sum could provide basic health amenities and still build more than five primary health centres (PHC) to most of the health-challenged parts of Nigeria.

Instances of corruption in MDAs are not novel, sadly. However, such circumstances should not exist, given the current economic climate. Not to mention Nigeria’s inability to fund her budget. More so, given that LUTH is a federal institution, it imposes an extra necessity to be accountable to the federal government in all its activities and functions. No less remittances to the government. 

However, this was not the case with LUTH who withheld ₦1,204,738,041.44 in taxes and revenue. First, the auditor’s report flagged LUTH’s evasion of ₦237m (exactly ₦237,007, 828.05) to the Consolidated Revenue Fund (CRF). Next was the institution’s failure to remit ₦967 million (exactly ₦967,730,213.44) in statutory taxes and stamp duties for the period.

LUTH’s actions deprived citizens deserved economic growth

There is no gainsaying that tax payment and its due remittance contributes enormously to a nation’s economic growth amid other social benefits. Ergo, the institution’s actions depleted some of Nigerians financial strength to operate as expected. And by implication, deprived citizens the deserved economic growth.

Financial Regulation- “There is no one to implement…”

At the heart of the matter is the absence of an implementation strategy and a weak sanctioning system. Segun Elemo of Paradigm Leadership Support Initiative shared these sentiments. The Executive Director for PLSI further noted the gross violation of LUTH’s actions presented. Not only did they hoard funds, but they also kept people’s taxes. He, however, blamed the absence of enforcement of stipulated laws for these problems.

“As much as there are laws that mandate MDAs to remit any taxes collected to the FIRS account, it is so bad that these laws are being violated. Unfortunately, there is no one to implement those laws too, which is why we say there should be tax audits. Last year, we highlighted about 30 billion that was not remitted in the form of taxation. It is a big issue, and this is why the government cannot fund main projects.”

Segun Elemo, Executive Director | Paradigm Leadership Support Initiative  

Segun Elemo, Executive Director | Paradigm Leadership Support Initiative  

Apart from depriving Nigeria, the internally generated revenue, LUTH has also violated section 233(i) of  Financial Regulation.
“All remittances such as banknotes, cheques, bank draft etc. received through post or by hand shall be passed to the Director, Finance and Accounts Department who will send to Head accounts. The Head of Account shall immediately enter or cause to be so entered under his direct supervision full details of all remittances into a paper Money register,(Treasury book 12) shall prepare, or cause to be prepared, treasury form 15 in respect of each remittance.”

Section 233(i) Financial Regulation 

A challenge of policies and regulations- Expert

Similarly, Policy Analyst Samuel Atiku highlighted the inadequacies in government policies and regulations as the reason for these discrepancies. According to Mr Atiku, Nigeria had a problem in the general administration of its taxes. For the Economist, this challenge prefaces Nigeria’s inability to internally generate more than ₦4.2 trillion, despite evidence to the contrary. He also noted how operational discrepancies caused MDAs to defy the president executive order that stipulates that every fund should be going to the Federal Government Consolidated Account. 

“It is not constitutional for any government parastatal to have a Pseudo Account. But because of procedural gaps within our Public Financial Management  PFM (Public Financial Management) sector, that is why we have all these happening. If Nigeria wants to raise its revenue by ₦7 trillion, we can do it. But it depends on our willingness to pluck out those gaps.”

Atiku Samuel | Policy Analyst, Economist

LUTH feigns ignorance to findings

Interestingly, Lagos University Teaching Hospital is oblivious to the preceding. Dataphyte gleaned their ignorance from a phone call placed to a representative of the Public Relations Department. “Before I will respond to you on this, I will need to go through the reports as well,” the person responded concealing their identity.