A bill to exempt the Federal Mortgage Bank of Nigeria (FMBN), from payment of income tax has been presented to the National Assembly for consideration.
The bill which was obtained exclusively by Leadership weekend yesterday, also seeks to increase the membership of the board of the apex mortgage bank to 11, among other things.
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Membership of the board under the new law will include the chairman, a representative of the Federal Ministry of Lands, Housing and Urban Development, Federal Ministry of Finance and the Nigerian Institution of Estate Surveyors and Valuers.
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Others are representatives of the Nigerian Institution of Architects, the Central Bank of Nigeria, the Nigeria Social Insurance Trust Fund, representative of the organized private sector, the managing director of the bank and executive directors of the bank.
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Under the proposed law sponsored by Hon. Ali Ahmad, the FMBN is being proposed for exemption from all enactments relating to taxation of companies as well as levies and charges on business premises.
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The bank is also expected to be exempted from payment stamp duties, registration charges, taxes on securities, debt instruments and other instruments issued by it.
Section 23 of the bill reads, “The Mortgage Bank shall be exempted from the payment of income tax and the provision of any enactment relating to taxation of companies or statutory corporations or levies or charges on business premises shall not apply to the Mortgage Bank.”
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“Notwithstanding the provisions of any law or enactment on taxation, stamp duties or levies, the mortgage bank shall be exempted from payment of stamp duties, registration charges and all charges, levies or taxes on securities, lands, debt instruments and all instruments issued by it.”
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Funding for the bank is expected to be sourced through grants from the Federal Government, interest on investment, gifts, and grants-in-aid and testamentary.
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A part of the bill relating to this reads, “The Federal Mortgage Bank shall establish and maintain a fund from which shall be defrayed all expenditure incurred by the Mortgage Bank.
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“Such sums as may from time to time, be provided by the Federal Government for the purpose of this section by way of grant or loan or otherwise.”
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However, Section 16 (1) of the proposed law provides that the bank applies proceeds of the funds generated under it for the administration of the apex mortgage institution.
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But a housing expert, Arc. Ezekiel Nya-Etok has said unless the capital base of the FMBN is raised to N500 billion, the bank will not make any impact in the housing sector.
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Nya-Etok, who spoke to LEADERSHIP weekend on the telephone, decried the situation in which the Federal Government paid lip-service to housing delivery and called for increased funding of the critical sector.
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He said, “There has to be a strong relationship between the lending capacity and the capital base of the bank. For a bank? that is the head of the mortgage banking institution in the country with deficit running into several millions, we need over N40 trillion if we have the intention of building from 750, 000 to one million houses annually for a period of 10 years.
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“Even a capital base of N500 billion is like a drop in the ocean. If the FMBN is to play a proactive role in the housing subsector, it has to have a capital base that runs into trillions of naira.
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“And to do that effectively, it will have to open up its operations to the capital market where it could source enough funds to finance the activities of primary mortgage institutions in the country.”
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As the regulator of the mortgage subsector in the country, Nya-Etok argued that the FMBN should be strengthened to effectively regulate mortgage banks as the CBN is doing to commercial banks in the country.
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