Finance
Tax evasion: FIRS to go after 325,000 companies, persons
ABUJA-THE Federal Inland Revenue Service would soon go after multinational companies, corporate organisations and individuals who are evading payment of taxes in the country.
The move, according to SUNDAY PUNCH’s investigations, is part of a renewed effort by the agency to boost tax revenue to fund the programmes of the Federal Government.
FIRS Headquaters
Statistics obtained from the service revealed that out of the 450,000 companies in Nigeria, only 125,000, representing 27.7 per cent, pay any form of taxes. Going by this figure, it implies that about 325,000 companies are evading tax, thus denying the government huge revenue annually.
The past Chairman of the FIRS, Mr. Sunday Ogungbesan, had said the service was finding it difficult to track the financial activities of those who did not pay taxes, as most of the evaders were no longer active.
But the Acting Executive Chairman, FIRS, Mr. Babatunde Fowler, in his first official meeting with the management staff of the service, was said to have vowed to ensure that all tax revenue due to the government would be recovered from all tax payers.
Fowler said his administration would not take the issue of tax evasion lightly, as he was aware that some foreign companies that were operating in Nigeria were being investigated in England for evading taxes.
He said, “No country can succeed without taxation. We will make sure that we cover all ground, especially on the corporate level; all tax payers within each state will be covered.
“Those who have found Nigeria a fertile ground; those who have made a living and made profit from the businesses within Nigeria, we ask them to do the right thing.
“We all know the right thing to do. Most of these companies have the big names as auditors yet they keep different records — one set of records for the banks, one set of records for shareholders and one set of records for the tax administrators.
“I think it’s time that that was stopped and I am going to also request that the multinationals should follow our laws and not do things that will contravene the tax laws and I ask them that they should please partner with us and follow the laws of the Federal Republic of Nigeria, especially when it comes to tax payment.”
The Director, Communications and Liaison Department, FIRS, Mr. Emmanuel Obeta, had told our correspondent that the FIRS, in a bid to capture companies with the tax net, is currently discussing with the Corporate Affairs Commission to make it mandatory for the companies to obtain their Tax Identification Number at the point of registration.
Obeta said, “The collaboration with the CAC is still ongoing, such that the FIRS will gain an immediate access to all the data of registered companies and such companies can also obtain their TIN at the point of registration from the CAC.
“The number was obtained from a physical validation or enumeration exercise. A lot of the other registered companies are portfolio companies without visible validation of their existence at their given addresses.”
-PUNCH-
Business
Nigeria pays US$4.9 billion on petrol subsidy in 2024- NNPCL
It was however noted by Biztellers.com.ng, that although subsidy is back in effect, the main reason for that is the increasingly weak state of the Naira and the country’s extreme dependence on products importation. Also unlike the previous subsidy era, where several oil marketers were getting free subsidy refunds for unverified product importation, this subsidy era is witnessing only one importer, the NNPCL, which in effect is the sole receiver of government subsidies.
Yemie ADEOYE
INSPITE of the official position of the Nigerian government that the controversial petrol subsidy is gone for good as announced by the President on assumption of office, the state owned Nigerian National Petroleum Corporation Limited, NNPCL has disclosed that petrol subsidy is still fully operational in Nigeria, although, under a different identity.
Umar Ajiya, Chief Financial Officer at the NNPCL, disclosed that it cost the company a staggering N7.8 trillion (US$4.9) to cover this price gap in the first seven months of 2024.
Rather than simply referring to these claims as subsidies, he stated that the company is merely managing the price difference in petrol imports on behalf of the federation, stressing that this should not be misconstrued as a return to subsidy payments.
This revelation has reignited discussions on whether the NNPC is indirectly offering subsidies, a concept typically defined as selling a product below its cost price.
Documents reviewed by Biztellers.com.ng showed that the term “subsidy” was used extensively in official correspondence between the NNPCL and the presidency, particularly in reference to the “shortfall.”
Recall that President Bola Tinubu reportedly approved NNPC’s request to utilize the 2023 final dividends due to the federation to offset these costs.
However, during a media briefing on Monday about the company’s 2023 audited financial statements, Ajiya refuted claims that the NNPC is involved in any subsidy scheme.
Ajiya further disclosed that the Nigerian government owes the NNPC N7.8 trillion ($4.9 billion) in subsidy-related debts for the period from January to July 2024.
In furtherance of his clarification to the News Agency of Nigeria (NAN), Ajiya insisted that no subsidy payments have been made to any marketer in the last nine years, citing the NNPC’s role as the sole importer of petrol under supply contracts.
He said, “In the last eight to nine years, NNPC Ltd. has not paid anyone a dime as a subsidy; no kobo has been disbursed by NNPC Ltd. in the name of subsidy. No marketer has received any payment from us for subsidy.”
“What has been happening is that we have been importing PMS, which has been landing at a specific cost price, and the government tells us to sell it at half price. So the difference between the landing price and that half price is a shortfall.
“And the deal is between the Federation and NNPC Ltd., to reconcile, sometimes they give us money, so there is no money exchanging hands with any marketer in the name of subsidy.”
Ajiya remained silent on how much of the $4.9 billion could have been remitted to the federation account if the NNPC had not been covering the “shortfall.”
It was however noted by Biztellers.com.ng, that although subsidy is back in effect, the main reason for that is the increasingly weak state of the Naira and the country’s extreme dependence on products importation. Also unlike the previous subsidy era, where several oil marketers were getting free subsidy refunds for unverified product importation, this subsidy era is witnessing only one importer, the NNPCL, which in effect is the sole receiver of government subsidies.
The Central Bank of Nigeria (CBN) has refuted claims of devaluing the.
Earlier reports suggested that the CBN had devalued the Naira, lowering its exchange rate from N631 to the dollar, compared to the previous day’s rate of N461.60 at the Importers and Exporters (I&E) window.
However, the Central Bank of Nigeria (CBN) released a statement on Thursday through its Acting Head of Corporate Communications, Dr. Isa Abdulmumin, categorizing the report as false information.
In the statement titled ‘CBN Has Not Devalued The Naira’, he said the attention of the apex bank was drawn to the news report by an Abuja based newspaper edition of June 1, 2023, titled “CB Devalues Naira To 630/51”.
However, the CBN stated categorically that the news report was replete with outright FALSEHOODS and destabilizing innuendos, ‘reflecting potentially willful ignorance of the said medium as to the workings of the Nigerian Foreign Exchange Market.’
“For the avoidance of doubt, the exchange rate at the Investors’ & Exporters (I&E) window traded this morning (June 1, 2023) at N465/USS1 and has been stable around this rate for a while.
“The public is hereby advised to ignore the news report by Daily Trust in its entirety, as it is speculative and calculated at causing panic in the market,” the CBN spokesman added.
He, therefore, advised media practitioners to verify their facts from the Central Bank of Nigeria before publishing in order not to misinform the public.
The interest rate in Nigeria has been raised to 18.5 percent, up by 0.5 percent, from 18 percent where it was pegged in March 2023.
The Central Banks of Nigeria’s (CBN) Monetary Policy Committee (MPC) resolved to this effect at its third meeting of 2023 in Abuja, on Wednesday.
Governor, CBN, Godwin Emefiele, made the disclosure in the communiqué of the MPC’s meeting, thereafter.
While engaging the media at the end of the two-day meeting, Emefiele, said the committee voted to keep the asymmetric corridor at +100 and -700 basis points around the MPR.
In the view of the MPC, rising inflation rate is traceable to the high energy cost and challenges around the supply chain, among others, which lie outside the corridors of the CBN.
Emefiele said, “The current trend in price development would continue to be monitored by the bank with greater collaboration with fiscal authority to address the drivers of inflation.”
Biztellers reports that the CBN had effected six consecutive interest rate increases, which has seen the rate move from 11.5 percent in March 2022 to 18.5 percent in May 2023.
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