A Bill seeking to give legal backing to the Nigeria Police Development Fund passed into second reading on Wednesday.
The passage of the bill will enable the Police to receive over N540 billion annually for the Nigerian Police as development fund when passed into law.
The bill is titled: “A bill for an Act to establish the Nigeria Police Development Fund and for related matters.”
According the sponsor of the bill, Senator Abu Ibrahim, the proposed bill seeks to provide legal framework for the management and control of the special intervention fund to be known as Police Development Fund.
The fund is to be created for the training and retraining of personnel of the Nigeria Police Force, provision of equipment, offices and barracks accommodation and related facilities to enhance the security service delivery of the police.
Leading debate on the bill, Senator Ibrahim said he is convinced that the enactment of the bill into law will encourage the police to put in their best and serve the country better.
Part of the financial implication of the bill includes an amount consisting 0.5 per cent of the total revenue accruing to the Federation Account; 5 per cent of the net profit of companies operating businesses in Nigeria; and 30 per cent of monies from cyber security fund.
While shedding light on the bill, Ibrahim disclosed that the total amount of funds expected to go to Police annually is over N540 billion.
The lawmaker, who is also the chairman of Senate Committee on the Police, proposed that to enlarge the funding, the collection of Value Added Tax on petroleum products, although VATable, should be included.
Giving a break down on how the police will get the annual budget of N540 billion, Ibrahim said with only 2 per cent of VAT income from petroleum products set aside for the Nigeria Police Force, will translate to approximate earning of N51.76 billion at 2015 consumption of petroleum products.
He proposed that additional funding that could be explored for the fund is increase in VAT rate from 5 per cent to between 7.5 per cent and 10 per cent, with 2 per cent of the increase allocated to the Fund.
The increase, he said, will generate on annual basis a minimum of N25 billion.
Ibrahim said the implementation of the proposal would require an amendment to the VAT Act in its entirety to avoid the increase being seen as an additional cost.
He explained that the proposed increase was informed by the fact that the 5 per cent VAT rate regime operational in the country is the lowest in the West African sub-region.
He said: “The implication of the estimate is that the entire sum of N9,250,565,307 projected for all subheads in the overhead cost for police formations and command in the 2017 budget is not even enough to provide minimal fueling and maintenance cost for police operational vehicles for five months.
“The basic requirement to provide adequate and appropriate items of kits for police personnel annually is N14,583,671,264 as against the sum of N752,298,724 earmarked in the 2017 budget.”