Reps to probe MDAs over ‘unlawful’ charges on award of contracts

The house of representatives has set up an ad hoc committee to investigate ministries, departments and agencies (MDAs) over allegations of “indiscriminate and unlawful” administrative charges on the award of contracts. 

The lower legislative chamber reached the resolution during plenary session on Thursday after it adopted a motion raised by Kpam Sokpo, a lawmaker from Benue.

While moving the motion, Sokpo said the only taxes necessary by law for contractors to pay to the government are the value-added tax and withholding tax.

He alleged that MDAs charge additional levies which are not remitted to the government, and described the action as “unlawful and fraudulent”.

“The most critical component of the annual budget is the capital and recurrent expenditure estimates approved by the national assembly for the provision of critical infrastructure and to cater for national priority projects,” he said.

“Various MDAs are mandated by the appropriation act of each year to execute such provisions on projects by awarding contracts to qualified and competent companies and entities in line with extant laws, while maintaining fairness, reliability, transparency, accountability and ethical standards in the process.

“The process of awarding contracts on projects mandates contractors to pay such taxes as value-added tax and withholding tax, and are the only charges required by law for such contractors to pay to the government for the award of the contracts.”

The lawmaker said there are allegations that MDAs charge between 5 to 25 percent before awarding contracts.

“Such charges by the MDAs are unlawful, fraudulent and clear cases of corrupt practices as such monies when collected, are not remitted to government coffers,” Sokpo said.

He said when the contractors are made to pay such advance fees, “there is a high tendency of not keeping to the terms of the contract as such projects are often abandoned or poorly executed”.

The motion was unanimously adopted after Femi Gbajabiamila, speaker of the house, subjected it to a voice vote.

Following that, the committee was given 12 weeks to complete the legislative action and report back to the house.