The fund will create additional sources of revenue for the Nigerian security agency.
According to the document, the fund will operate for an initial period of 6 years from the commencement and may be extended for an additional period.
Here are the 5 things you need to know about the Nigerian Police Force Fund:
- The federal government, through the Federation Account Allocation Committee (FAAC), will contribute 0.5% while businesses operating in Nigeria pay a levy of 0.005% out of their net profits.
For a business with a net profit of N2 billion in a year, it will pay a levy of N100,000 (which is 0.005% of the sum).
- The money will be deposited into an investment income account. The income generated from the fund is exempt from income tax.
- The fund will be used to purchase equipment and machinery, construct police stations and provide living facilities including quarters or barracks for the police officials.
- It will also cater for training and retraining of police officers for intelligence gathering and other security activities.
- A board will be established to administer the fund, making investment decisions, control and provide the legal framework for the management and control of special interventions. The affairs of the fund will be in the custodian of the Ministry in charge of Police Affairs and chair by the Minister as well as other members.
In a note, experts at PwC Nigeria said the “earmarked taxes could create concerns around the stability of the tax regime in Nigeria.”
They advised that, although funding of the police and improving security is a priority issue, it could be funded through more allocations from already existing revenue streams.