April 10, 2019

Pay your tax willingly- bmo tasks Nigerian elite

An appeal has gone to the Nigerian elite, especially high-net worth individuals, to be more patriotic and desist from shirking in tax payment, under whatever guise. Making this appeal the Buhari Media Organization (BMO) said it is not proper for these “eminent” Nigerians to wait for the tax authorities to coerce them to perform their civic responsibilities. In a statement signed by its Chairman Niyi Akinsiju and Secretary Cassidy Madueke, BMO said that the elite need to pay their taxes willingly and voluntarily rather than having to be coerced. “We have a situation where people who are some of the greatest beneficiaries of government, regardless of party affiliation, are reluctant to pay taxes and levies on assets they have locally and in other jurisdictions. “This has led the President Muhammadu Buhari-led administration to twice approve amnesty and immunity for defaulters who are willing to voluntarily declare those assets within a time frame, after which they would be liable to criminal prosecution and other punitive measures. “The first was at the onset of the Voluntary Assets and Income Declaration Scheme (VAIDS) of which a sizeable number of wealthy Nigerians took full advantage of the amnesty window and for which the authorities realized N30billion. “It also led to a five million increase in the number of tax payers in the country’s tax database which stood at twelve million before the introduction of VAIDS. “And now, the government has made a similar offer to Nigerians with undeclared offshore assets under its Voluntary Offshore Assets Regularization Scheme (VOARS). It is almost certain that high net-worth individuals would take advantage of the immunity package to shield themselves from tax penalties on such assets,” it said. In all these, BMO noted that the Buhari administration deserves commendation for coming up with creative initiatives to raise Nigeria’s woeful tax-to-GDP ratio to a level that is comparable to that of other countries. This, the group said, is because it is the first administration in recent years to consider appropriate measures to improve on the country’s tax receipts. “It is no longer news that Nigeria’s abysmal tax-to-GDP ratio, which stands at 6%, is one of the worst not only in Africa but also in the rest of the world in spite of the lifestyle choices that Nigerians are known for. Even Ghana that many are quick to compare to the country has a 16% tax-to-GDP ratio. “And like President Buhari once said, it is not a thing of pride that a country with people who are so competitive and driven, would be one of the lowest performers in tax receipts especially among the elite. “Is it not laughable that official records show that only about 214 Nigerians pay more than N20m in tax every year with all of them based in Lagos? How about a situation where fewer than 1,000 people pay N10m or more in tax annually? Yet this is a country with a demand for high end products and was in fact ranked as the biggest market for one of the world’s most expensive champagne!”BMO said. The group also cautioned opposition elements against concocting and pushing false and inaccurate narrative on the Buhari administration’s move to ensure that high net-worth individuals regularize their offshore assets and pay the necessary taxes. “We at BMO are surprised that leaders of the Peoples Democratic Party (PDP) said they are seeking more time to study the government’s amnesty package for Nigerians with offshore assets. This is a bit shocking considering that the party’s spokesman is used to attacking policies of the Buhari administration without fully comprehending them. “We however know that a party that is pushing for a return to the status quo ante would find a way to attack the Voluntary Offshore Assets Regularization Scheme without a thought for the benefits that would accrue to the Nigerian state”. BMO further urged wealthy Nigerians with assets abroad to key into the initiative and not view it as a punitive action targeted at the elite.   Source: bizwatchnigeria

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Underperforming Kaduna Refinery among Highest Tax payers to Kaduna State Government

The Kaduna Refining and Petrochemical Company, one of the country’s crude oil refineries that is run by the Nigerian National Petroleum Corporation (NNPC), is one of the highest tax payers to the government of Kaduna State, Mr. Nasir el-Rufai, the state governor has said. According to el-Rufai, the refinery which capacity utilization remained at zero for most parts of the months in 2018, and was not refining crude oil despite receiving the commodity from its parent body, the NNPC, pays the state its taxes regularly. The governor in a statement from the NNPC yesterday in Abuja disclosed this to the corporation’s Group Managing Director, Dr. Maikanti Baru, during a courtesy call on him, he however did not disclose the type of tax the unprofitable refinery pays to the state. The NNPC’s monthly operations and financial report for December 2018, indicated that besides a profit of N2.957.33 billion recorded by the Kaduna Refinery in April 2018, all other months, it made losses. Notwithstanding, el-Rufai, said it paid its taxes promptly. He was also quoted to have stated in the statement signed by NNPC’s Group General Manager Public Affairs Division, Mr. Ndu Ughamadu, that the state would support the NNPC to build its Abuja-Kaduna-Kano (AKK) gas pipeline project. The governor described the AKK gas line project as a very important one to Kaduna, noting that the people of Kaduna were happy it would support the state’s power demands.   Source: bizwatchnigeria

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Borehole operators, drillers to pay tax in Katsina

The Katsina State Government said it would tax borehole owners and operators in the state as part of measures aimed at generating revenue for the state and also to address indiscriminate drilling of borehole by several private houses in the state without following due processes The State Commissioner for Water Resources, Alhaji Salisu Gambo Dandume, told newsmen on Saturday in an exclusive interview, that the situations where owners of private houses embark on drilling of boreholes even without observing the mandatory kilometer spacing have become worrisome. He further assured that the State Rural Water Supply and Sanitation Agency, RUWASSA, shall be strengthened to enforce laws the drilling and installation of bore holes in the state. In a related development that the State Government has assured that the recent water scarcity that hit the state in the past two weeks shall be over by the end of April following the expected delivery of two new water pumping machines on April 8 which when installed will immediately boost water supply in the state. The Commissioner attributed the scarcity water in the state to the failure of the water pumping machines to deliver supplies. He said ’’the water scarcity that is noticeable in the state is largely caused by the failure of the water pumping machine, which has aged between 5-6 years now, and has experienced inadequate maintenance and lack of spare parts’’. ‘’We have placed an order for a new one, 3 to 4 months ago with delivery expected to be made April 8.each pump costs about N94m’’ ‘’When installed it will ease the suffering of Katsina people in the area of water supply, and the issue of scarcity will be addressed once and for all Alhaji Dandume also disclosed that the expected commencement of water supply from the Zobe Dam project represents another big relief in the delivery of water to the people. ‘’The delay in commission the Zone water project was caused by series of testing the project was subjected to. We tested the water pressure and the booster pumps and the area gravity that should empower water supply’’ “We encountered canalization of some Zobe water pipelines and stealing of heavy water metals which needed repairs all of which contributed to the delays’’ Investigations by The Nation revealed that some of the areas affected by the scarcity include: Layout, GRA, Dandagoro, Rafindadi, Abatour, Kofar Sauri, and Goruba Road among others. Residents combed the streets with their kegs to fetch water from any available sources, while water vendors were seen crowding available water boreholes in vain, waiting to buy water and sell to their growing number of customers.   Source: Today.ng

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Shell Petroleum Remits $6.3b to Nigeria For 2018 Tax, 48% More Than 2017

Shell Petroleum Development Company (SPDC) and Shell Nigeria Exploration and Production Company Limited (SNEPCo) remitted $6.3 billion in 2018 to Nigerian government. The money which represented tax and production entitlement for the 2018 fiscal year and was paid to the Nigerian National Petroleum Corporation (NNPC), Federal Inland Revenue Service (FIRS), Department of Petroleum Resources (DPR), and the Niger Delta Development Commission (NDDC). The payments signified a 48 per cent increase from the 1.5 trillion naira the country earned in 2017, making it the second time in two years that Nigeria was grossing the largest revenues from the company. The payment also formed part of Shell’s Sustainability report which was released by the Group Chief Executive Officer of the Royal Dutch Shell, Ben Van Beurden. Beurden said: “Shell must remain at the forefront of the drive for greater corporate transparency. “We will continue to be more open about what we do and why we do it. We want to help people better understand Shell’s performance, values and principles. “These reports outline our approach and activities in the crucial areas of sustainability and our relationships with industry associations and governments”. The Nigerian National Petroleum Corporation (NNPC) received the lion’s share with payments in kind valued at $3.776 billion. FIRS received $1.286 billion in taxes, while the DPR received $1.253 billion from royalties and fees. The NDDC was paid fees totaling $81.5 million. The Shell Sustainability Report outlines Shell’s approach to sustainability and covers its social, safety and environmental performance in 2018.   Source:  Saamedia

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CAC: Assets of politicians, public officials to be made public – NFIU

The assets of all public officials and senior political office holders will soon be open for public knowledge and scrutiny, says Director, Nigerian Financial Intelligence Unit (NFIU), Modibbo Hamman-Tukur. Mr Hamman-Tukur disclosed this on Thursday in Abuja at a budget defence session with the House of Representatives Committee on Financial Crimes led by Kayode Oladele (APC-Ogun). The director said it was part of the conditions for lifting the suspension of the NFIU by the Egmont Group of Financial Intelligence Units. The director told the committee that the suspension, which was lifted in September 2018 was based on certain conditions that needed to be met by the country. He said the Egmont Group would want the NFIU to work closely with other agencies of government in fighting terrorism, financial crimes and other related offences. “With the lifting of the suspension, it is likely that all assets of all leaders, public officials and political office holders will be displayed. “They want to see us work with the Securities and Exchange Commission (SEC), Nigeria National Petroleum Corporation (NNPC), Federal Inland Revenue Service (FIRS) and the Nigeria Communications Commission (NCC). “They want us to work closely with the presidency, Code of Conduct Bureau (CCB) and the Corporate Affairs Commission (CAC). “They want to see the assets of all public officials displayed publicly,” he said. According to him, the National Extractive Industry Transparency Initiative (NEITI) and the Corporate Affairs Commission (CAC), are doing a good job. “But it will be good that the beneficiary owner database will be domiciled with the Code of Conduct Bureau (CCB), and we will subscribe because CCB has assets declarations of all public officers.” He said after the suspension was lifted, they faced the task of the European Union (EU) listing, which was targeted at blacklisting Nigeria and stopping all her transactions overseas involving European countries. He added that they were able to block the blacklisting but the EU listing subjected Nigeria to enhanced due diligence in all transactions concerning all EU countries on suspicious transactions. The transactions, he said, would be through their own agencies within their jurisdiction. Mr Hamman-Tukur disclosed that the concerns raised by the EU include terrorism, kidnapping and corruption. On the 2018 budget, he said the NFIU had a total budget of N1.185 billion in 2018 made up of N385.310 million as personnel cost, N600 million as overhead while N200 million was for capital cost. According to him, the capital release to date stands at N174.946 million out of the budgeted amount of N200.1 million. He added that utilization percentage stood at about 12 per cent while the balance stood at N154.936 million. On the 2019 budget, the director revealed that a total of N8.244 billion had been proposed, made up of N1.154 billion for overhead cost, N4.124 billion as capital cost while N2.865 billion for personnel cost. He explained that in spite of the fact that the government had financial constraints due to dwindling revenue; the NFIU needed to carry out its role of monitoring financial institutions. This, he said was for compliance as empowered by the NFIU Act of 2018. Also, defending his budget before the committee was the Chairman of the Economic and Financial Crimes Commission (EFCC), Ibrahim Magu. Mr Magu disclosed that the sum of N251 billion cash and multi-million dollar worth of jewellery was recovered by the commission between January 2018 and the first quarter of 2019. He said this include: N11.5 billion final forfeiture (cash and accounts); N133.8 billion non-forfeiture recoveries; N8.92 billion direct deposits; N38.64 billion tax recoveries; N4.30 billion fuel subsidy recoveries and N42 billion banks (third party). He said was in addition to recoveries of assets as jewellery (gold), various sums in other currencies and cash for major government agencies including NNPC, FIRS and AMCON. “In the first quarter 2019 financial year, the Commission made recoveries which included: Cash of N140.7 million; Direct Deposit of N2.02 billion; Tax recoveries of N7.20 billion; Subsidy recoveries of N3.06 billion and 292 million dollars,” Mr Magu explained. On 2019 budget, Mr Magu said the commission required N22.071 billion in 2019 against the sum of N26.396 billion approved in 2018. He however, observed that the capital expenditure of N15.196 billion was reduced to N3.978 billion in the executive summary submitted by the Executive to the Legislature. According to him, the sum of N2.02 billion is for payment of outstanding liabilities to Julius Berger arising from certificate Nos. 28, 29 and 30; N1.5 billion cost on the agency’s new head office complex. “Then N.299 billion for liabilities for consultancy (New head office); N.47 billion for the purchase of security equipment (ammunition) and N1.1 billion for the furnishing of the new head office, among others.” Mr Magu also disclosed plans to increase salaries and allowances of 970 additional staff approved for recruitment, to be fully enrolled on the personnel cost platform in 2019. This comprises 332 Assistant Detective Superintendents, 293 Assistant Detective Inspectors currently undergoing training at NDA Kaduna and support staff that recently joined the services of the commission. In his welcome remarks, Mr Oladele reiterated the committee’s support for the sustenance of the war against corruption by the Muhammadu Buhari’s administration and transformation of EFCC into world-class anti-graft institution. He observed that the issue of paucity of funds had become a thing of the past. He also applauded the synergy between the Executive and Legislature towards the completion of the 10-storey office building constructed for the commission, which he observed was abandoned by the Good luck Jonathan administration.   Source: Premium times

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Tax default: FIRS extends ‘account freeze’, plans to recover N750bn by June

Babatunde Fowler, executive chairman of the Federal Inland Revenue Service (FIRS), says the service plans to recover N750 billion from 55,000 defaulting taxpayers by extending its account substitution policy. Fowler was speaking in Abuja on Tuesday during a meeting with the joint house committees on finance; appropriations; and aids, loans and debt on the 2019/2021 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP). According to him, a bank account substitution exercise has already pulled 500 defaulters into the tax net, leading to a recovery of N23.25 billion. He said the same exercise will be extended till June to get 55,000 tax defaulters with a turnover of N100 million and above into the tax net. “From the Bank accounts substitution exercise, we used banking information to bring non-compliant taxpayers with N1 billion and above turnover to comply. It has so far resulted in the recovery of N23.35 billion,” Fowler said. “The exercise has been extended to cover those with a turnover of N100 million and above. To date, about 500 of them have come forward and they have paid and we have collected in the region of about N24 billion.  “We believe we should be able to go through the 55,000 before the middle of this year which will be the middle of this year, June 30th. In terms of estimates, which we should be able to generate from this exercise alone, that will be about N750 billion.” The “substitution” empowers FIRS to appoint the banks as collection agents for tax, and all tax defaulters will have their accounts frozen or put under substitution pending when they come forward. KPMG, one of the Big Four auditors in the world, had said the move is draconian and contravenes Companies Income Tax Act (CITA) 2004. After KPMG’s observations, FIRS wrote to banks, directing them to lift the lien on alleged tax defaulters’ bank accounts for 30 days. Speaking in Abuja on Tuesday, Fowler revealed that the policy has been extended to increase FIRS tax recovery. Fowler said the tax administration agency recorded an increase in Value Added Tax (VAT) collection between 2015 and 2018, with 85 percent of that amount going to state governments.  “Out of about N5.3 trillion, a large percentage is shared between states and local governments. In VAT, there has been a growth of over 44% between 2015 and 2018. And that is at the current rate of 5%. “85 percent of VAT goes to the state governments who are supposed to be closer to the people. So they can use that money as approved by their state houses of assembly…they can use that money on education, infrastructure, etc.” He said the service is broadening its VAT collection scope using modern technology with the adoption of States Accountants Generals (SAG) collection platform, VAT Auto-Collect, integration of the GIFMIS (Government Integrated Financial Management Information System) platform with Ministries, Departments and Agencies, (MDAs) and through e-Service payment options. Fowler said the FIRS also initiated income tax on property owners in Abuja and Lagos, clarifying that it is not a property tax. He said this was part of efforts to deepen tax revenue collection and expand the nation’s tax net as well as increase the revenue base with plans to extend the exercise to other locations beginning with Oyo and Kaduna states. On tax audit exercise of the service, Fowler said the National Tax Audit (NTA) contributed the sum of N212. 79 billion to tax collection in 2018 and is expected to “produce increased audit yield in 2019”.   Source: Cable

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FIRS reiterate call on eligible citizens to pay tax

Babatunde Fowler, Executive Chairman, Federal Inland Revenue Service (FIRS) has reiterated call on eligible citizens to ensure adequate payment of tax to government for enhanced revenue generation. Fowler gave the advice during the 6th Edition of the Nigerian Youth Leadership Summit themed ‘Mentoring and Building Leadership Capacity for Good Governance’ on Thursday in Abuja. Represented by Mr Ahmed Buba, FIRS Deputy Director Training, Fowler said that taxation was a social contract between government and tax payers where citizens played significant roles in raising revenue for government. “By paying taxes, government will similarly have a strong motivation to account for revenues collected and utilization of such revenues. “Voluntary compliance by the tax payer will ensure that revenue is made available for improving on the provision of social amenities and services,” he said. According to him, while the amount generated may be significant, it was grossly inadequate to tackle infrastructural and technological needs of the country. He said that the amount was inadequate when compared to the amount actually needed for government development. Fowler said that he was glad the non-oil sector of the economy made up 53.62 per cent of the 5.3 trillion generated in 2018. “In the past it used to be more money coming from the oil sector but today we are happy to say we have more money coming from the non-oil sector of the economy. “This is a reflection of the efforts of the government to reduce oil dependency,” he said. Dele Omoyeni, Convener of the event said that the aim of the summit was to examine the effect and importance of being mentored in order to effectively lead. The News Agency of Nigeria (NAN) reports that the Nigerian Youth Leadership Summit is an initiative that takes place once every year and had been in existence since 2014.   Source: Guardian

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