Some tax experts have called for stricter punishment for tax defaulters, to make funds available for the provision of critical infrastructure and growth of the economy.
The experts, in separate interviews with The Tide source in Lagos, Monday also called for a probe of the tax records of politicians.
The experts spoke against the background of the recent revelation by the Federal Inland Revenue (FIRS) that close to 7,000 billionaires had defaulted in payment of tax.
Consequently, the FIRS said it would go after the defaulting taxpayers who were raking in billions in Nigeria and not paying taxes.
“This category of Nigerians has deprived the country of huge sums of money needed to build roads, hospitals, schools and others.
“Most developed and developing economies rely on tax for infrastructural development. There is need for stricter punishment on tax evaders in the country.
“Tax evaders are sent to jail in other climes,” Prof. Sheriffdeen Tella, a Senior Economist at the Olabisi Onabanjo University, Ago, Iwoye, said.
The economist insisted that the FIRS should probe the tax records of politicians who were spending millions of naira to collect forms for their party primaries.
The Director, Legal Services, Lagos State Internal Revenue Service (LIRS), Mr Seyi Alade, also attributed incessant tax evasion in Nigeria to non prioritisation of taxation by the Federal Government.
Alade said the federal government did not prioritise the issue of tax which could be used to develop infrastructure.
Alade explained that the revelation that more than 6,772 billionaires evaded tax meant that there was less revenue available to the government to fund critical infrastructure.
According him, such huge tax evasion was partly responsible for the level of the country’s rising external debt, because government is borrowing more to take care of the infrastructure gap.
“Taxation is a tool for economic management and development and should support sustainable growth and infrastructural development at all times.
“Payment of taxes is a civic responsibility of all legible tax payers and evasion of taxes is tantamount to depriving the economy of its sustainable means of economic development.
“Tax evasion is the bane of the tax system and it is also a criminal offence and should be strongly decried.
“Of course it will lead to tangible economic loss more so as revenue from oil is no longer stable,” Alade said.
The Assistant Director, Chartered Institute of Taxation of Nigeria (CITN), Mrs Oso Afolake, advised the federal government to streamline the taxation system for more revenue generation.
Afolake blamed the rampant tax evasion in the country to weak taxation system, which she said was fixable by the government.
She called for more stringent application of the nation’s tax statute by tax authorities against tax defaulters and also against entities that have statutory duties to remit taxes.
According to her, for multinationals like MTN and many others operating in Nigeria to evade tax, means lots of economic loss on the country.
She said it would impact on the economy negatively; making the tax to GDP ratio to remain low.
“Tax evasion results to reduction in revenue obtainable from taxes and this will deprive government the required resources to perform its statutory duties.
“Our government usually doesn’t give priority to the issue of tax, may be because of the resources at their disposal.
“It behooves on the government to restructure the tax system such that every legible taxpayer will be compelled to pay tax as at when due,” Afolake said.
The president, International Centre for Tax Research and Development, Mrs Morenike Babington-Ashaye, urged government to lay emphasis on building Nigerians’ attitude towards voluntary compliance to tax law through processes and procedures.
Babington-Ashaye argued that using the banks to go after defaulting taxpayers was not a legitimate process.
“Actually, I don’t believe the FIRS should be going beyond the law. The process by the FIRS is turning to be a military system.
“The only way they can do that is if they go through the judiciary process by taking the defaulting taxpayers to court. Then, the court makes a judgement that they pay penalty and interest,” she said.
Babington-Ashaye, also a founding member of the Chartered Institute of Taxation of Nigeria (CITN), described the FIRS’s process of asking the banks to seize money as ‘going through the back door’.
This, the president said might lead to customers not saving their money in the banks, thereby reducing their resources for operation.
“It will also encourage some individuals and companies to be transacting businesses in another companies’ names. So, the process is not legitimate.
“In the first instance the banks are not direct agents and do not have any judiciary position between the FIRS and the taxpayers,” she said.
A Tax Leader, PwC West Africa, Mr Taiwo Oyedele, described the process as unconventional, and that executing such order should be in accordance with the law to avoid negative impact on businesses and ease of paying taxes.
Oyedele advised that tax payers to pay attention to their tax affairs and discharge their tax obligations as and when due.
FG To Eradicate Multiple Taxation In Mining Sector – Adegbite
The Minister of Mines and Steel Development, Mr Olamilekan Adegbite, says the Federal Government is setting in place various measures to eradicate multiple taxation for miners.
At the flagship Forum last Tuesday in Abuja, Adegbite said the ministry was engaging with the three tiers of government to resolve this issue.
He said that this informed the recent webinars and advocacy engagements by the ministry with all stakeholders in the country involved in the mining industry.
He said that though the constitution vested control of mineral resources in Nigeria in the Federal Government, the fund goes into the Federation Account, of which everybody participates.
He added that all the 774 local governments got money from that account but if they cut corners by disturbing the miners with unnecessary local taxes they get discouraged.
“So, it is double jeopardy when you go and do all these illegal taxes, or you go and disturb the miners, when you will benefit from what is derived in your place, you get a 13 per cent derivation.
“You also get your share of the federal accounts as of course laid down statutorily. So, it is a continuous process, we educate everybody and I think we are getting good results.”
The minister said there was a Mineral Resource Committee (MIRENCO) in every state and the chairman was nominated by the governor of that state, so that he would be in the know about everything going on about mining in that state.
He said that the chairman of that committee was to oversee all the activities between the miners, the community, the state government and the Federal Government.
“So, on that committee, the Federal Government has representatives, the local government has representatives, the governor chooses the chairman and then Ministry of Environment and other stakeholders bring in representatives as well.
“So, through this committee, everybody can participate, and make sure that we work in harmony, bake a bigger pie so everybody can share.
“So, it is continuous advocacy, we let them know what we are doing and of course they can also participate, where they do not understand or where the governor has any problem he can always ask the chairman.”
On the issue of rock blasting, he said cities had expanded to meet quarries.
According to him, quarrying is a necessity, because stones are needed to make concrete when building roads and houses.
Nigeria Lost N53.26bn To Gas Flaring In Two Months – NNPC
Nigeria lost an estimated N53.26billion in the first two months of this year as international oil companies and local players flared a total of 33.04 billion standard cubic feet of natural gas.
The oil companies wasted 17.53 billion scf of gas in February, compared to 15.51 billion scf in January, according to data obtained from the Nigerian National Petroleum Corporation.
With the price of natural gas put at $3.93 per 1,000scf as of Wednesday, the 33.04 billion scf flared translates to an estimated loss of $129.85million or N53.26billion (using the official exchange rate of N410.13/dollar).
The NNPC, in its latest monthly report, said out of the 206.05 billion scf produced in February, a total of 133.06 billion scf was commercialised, consisting of 40.15 billion scf and 92.91 billion scf for the domestic and export market respectively.
It said this implied that 64.48 per cent of the average daily gas produced was commercialised while the balance of 35.52 per cent was re-injected, used as upstream fuel gas or flared.
Gas flare rate was 7.67 per cent in February (i.e. 565.52 million standard cubic feet per day), compared to 7.73 per cent in January (i.e. 554.01 million scfd).
In January, a total of 223.55 billion scf of natural gas was produced, translating to an average daily production of 7,220.22 million scfd.
Out of the total gas output in January, a total of 149.24 billion scf was commercialised, consisting of 44.29 billion scf and 104.95 billion scf for the domestic and export markets respectively.
Firms producing less than 10,000 barrels of oil per day will pay a gas flare penalty of $0.5 per 1,000 scf.
The penalties paid by oil and gas companies for flaring gas in the country will be invested to build midstream gas infrastructure in host communities, according to a new provision introduced into the Petroleum Industry Bill by the National Assembly.
“Moneys received from gas flaring penalties by the commission (Nigerian Upstream Regulatory Commission) pursuant to this subsection, shall be transferred to the Midstream Gas Infrastructure Fund for investment in midstream gas infrastructure within the host communities of the settlor on which the penalties are levied,” the Senate and House of Representatives said in subsection (4) of section 104 of the bill.
Nigeria To Boost Trade Volume Through ECOWAS TPOs
Nigeria is poised to boost its non-oil exports following the official launch of the Economic Community of West African States (ECOWAS) Trade Promotion Organisations (PTOs).
With Executive Director /CEO of the Nigerian Export Promotion Council (NEPC) Segun Awolowo, as the inaugural president of the ECOWAS TPOs, the NEPC is repositioning the nation’s export through the implementation of its N50 billion Export Expansion Facility Programme (EEFP), a part of the Economic Sustainability Plan whose development and implementation is being led by the Vice President.
EEFP is expected to significantly raise the volume of non-oil exports in Nigeria, and it’s a spin-off of the Zero Oil Plan developed by Awolowo and approved by the President.
Besides providing financial support for the average Nigerian exporter, EEFP is also going to see the establishment of top-notch warehouses close to airports where Nigerian goods meant for export would be packaged to globally competitive standards ahead of their exportation.
The EEFP, in line with the FG’sEconomic Sustainability Plan (ESP), is focused on cushioning the effects of the Covid-19 pandemic on non-oil export businesses,thereby safeguarding jobs and creating new ones.
In March, Minister of Industry,Tradeand Investment (MITI), Niyi Adebayo, officially flagged off the EEFP and launched the first online Grant Management Portal (GMP) for non-oil exports.
While the EEFP is being implemented by the NEPC, the Federal Ministry of Industry, Trade and Investment is the supervisory body over the agency and its operations.
It was learnt although the programme anticipated 500 beneficiaries, since the launch, it has received over 3,500 applications for the grant, out of which over 2,000 were verified after meeting the eligibility criteria.
Federal Government officials said further details and plans on disbursement to final successful beneficiaries are being awaited.
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