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Tag: Tax

  • Shell, Total, AGIP under fire over $85 billion tax claims

    Shell, Total, AGIP under fire over $85 billion tax claims

    The House of Representatives ad hoc Committee on structure and accountability of Joint Venture (JV) Business and Production Sharing Contracts (PSCS) of Nigerian National Petroleum Company (NNPC) Ltd. has summoned Total Upstream over tax claims of 85 billion dollars.

    Rep. Abubakar Fulata, the Chairman of the committee said this at an investigative hearing in Abuja on Tuesday.

    He said almost all the oil companies in Nigeria collected capital allowance and investment tax claims without Certificate of Acceptance of Fixed Assets (CAFA) which constituted breach of Nigeria’s extant laws.

    CAFA is generally issued to evidence an approval for the purchase of assets valued at ₦500,000 and above.

    Fulata also summoned AGIP Energy Natural Resources Ltd, Shell Nigeria Exploration Company. Ltd. Chevron and other oil companies, saying that most of the companies were making claims of capital allowance from the government without the certificate.

    He said companies found to be culpable would be compelled to make necessary refund to the government coffers.

    According to him, all companies in Nigeria do not have the CAFA certificates and they are enjoying capital allowance amounting to millions of dollars.

    ”These are things they cannot do in their country but doing in Nigeria. Unless you clear the malfeasance of this allowance, the committee would be compelled by the relevant agency to recover this money,” he said.

  • Why NNPC Ltd failed to achieve better performance in 2021 – Kyari

    Why NNPC Ltd failed to achieve better performance in 2021 – Kyari

    Malam Mele Kyari, the Group Chief Executive Officer (GCEO) of the Nigerian National Petroleum Company Limited (NNPC Ltd) has said the company could have achieved better performance in the year 2021.

    TheNewsGuru.com (TNG) reports that Kyari disclosed this at a news conference on Tuesday in Abuja while announcing a profit after tax of N674 billion declared by NNPC Limited for the financial year ended December 31, 2021.

    The profit represented a growth of 134.84 per cent when compared with N287 billion profit in 2020 which was recorded under the old Nigerian National Petroleum Corporation (NNPC).

    “NNPC progressed to a new performance level, from N287 billion profit in 2020 to a N674 billion profit after tax in 2021 climbing higher by 134.8 per cent year on year profit growth,’’ he said.

    Kyari also said that it recorded an increase in total assets from N15.86 trillion in 2020 to N16.27 trillion in 2021.

    Speaking on the Group’s financial position, Kyari said the corporation’s total liabilities decreased by 8.3 per cent to N13.46 trillion during the review period from N14.68 trillion in 2020.

    The GCEO said its shareholders funds position rose N2.81 trillion representing 144 per cent year-on-year.

    “The performance would have been greater if the operations in the year under review were free from incessant vandalism, crude oil and products theft, among others.

    “Details of the performance of NNPC and the respective subsidiaries as well as that of National Petroleum Investment Management Services (NAPIMS) will be published on our website www.nnpcgroup.com for stakeholder’s perusal.

    “We look forward to achieving greater performance to support our growth aspirations and to create more value for our stakeholders as we drive full commercial operations under NNPC Ltd.,’’ he said.

    He recalled that in Sept. 2021, President Muhammadu Buhari approved the publication of the 2020 NNPC Group Audited Financial Statement, in which NNPC declared a profit after tax of N287 billion for the first time in 44 years.

    Kyari said that in spite of the challenging operating environment, it strongly believed that the corporation had the potential to sustainably deliver better value to it esteemed shareholders.

    He said it sought to become a dynamic global energy company of choice to its customers, partners and over 200 million shareholders comprising of all Nigerians.

    Kyari noted that the corporation in 2019 rolled out deliberate policies and initiatives aimed at reducing costs and eliminating losses while adopting technology to entrench transparency, accountability and performance excellence (TAPE) across its various functions.

    He said the NNPC had recorded significant improvement over the past three years, turning up the curve from losses to profits.

  • BREAKING: NNPC Limited declares profit after tax of N674 billion

    BREAKING: NNPC Limited declares profit after tax of N674 billion

    The Nigerian National Petroleum Company (NNPC) Limited has declared a profit after tax (PAT) of N674 billion for the year ended 2021, with the company’s profit after tax shot up by 134.8% company to year 2020.

    TheNewsGuru.com (TNG) reports that this is contained in the approved 2021 audited financial statements of the NNPC Limited as disclosed by its Group Chief Executive Officer, Mele Kyari on Tuesday.

    “Today I’m happy to announce that the Board of NNPC has approved 2021 audited financial statements and NNPC has progressed to a new performance level, from N287 billion profit in 2020 to N674 billion profit after tax in 2021, climbing higher by 134.8% YoY profit growth,” Kyari disclosed.

    The N674 billion profit posted by NNPC Limited in the 2021 financial period represents an increase of N387 billion or 134.8 per cent when compared to the N287 billion recorded in 2020.

    The 2021 financial year made it the fourth consecutive year that the NNPC will be making its Audited Financial Statement public.

     

    Details shortly…

  • ICAN sues FIRS to court over tax seal

    ICAN sues FIRS to court over tax seal

    The Federal Inland Revenue Service, FIRS, has been dragged before the Federal High Court in Lagos by five Accountants over its plan to coerce tax practitioners to use a seal of the Chartered Institute of Taxation of Nigeria for filing annual returns to the Service from October 1, 2022.

    They filed the suit, marked FHC/L/CS/1837/2022, through their counsel Olaniyi George on behalf of themselves and members of Licensed and Concerned Members of the Institute of Chartered Accountants of Nigeria.

    The five plaintiffs are Chief Afolabi Igbaroola, Alhaji Ademola Ogunsesan, Deacon T.J. Ishola, Mr. Gbenga Afolabi and Mr. Abiodun Adedeji who are members of ICAN.

    The FIRS is the sole defendant.

    The applicants are questioning FIRS over a May 31, 2021 Memorandum of Understanding published in the Tribune of July 27, 2022 announcing the implementation of the CITN seal as a condition-precedent for filing of annual returns to the FIRS by Tax Practitioners from October 1, 2022.

    They said that the subject matter of the MoU was litigated by the plaintiffs and the FIRS at the Federal High Court in Lagos in Suit FHC/L/CS/1480/18, which is still pending before the Court of Appeal, Lagos as Suit CA/L/CV/1210/19.

    They urged the court to determine, among others, whether the FIRS being an interested party and a party that actively participated in Suit FHC/L/CS/1480/18, and Suit CA/L/CV/1210/19 can amongst “syndicate, facilitate, and/or mediate” on the subject matter of the appeal without their consent.

    They asked the court for five reliefs, including an order that the FIRS “cannot tamper, vary and dissipate the ‘res’ which is the subject matter of appeal in the Appeal and having had the knowledge of the appeal and injunction pending appeal and that the activities of the defendant in respect of the MoU amount to affront to the power and jurisdiction of the Court of Appeal.”

    A declaration that the defendant cannot violate its own rule/regulation as provided in Section 61 of the FIRS Act 2007; Section 11 of Tax Administration (Self-Assessment) Regulations 2011 on the appointment and delisting of proper persons to be a tax practitioner in Nigeria and that the advertisement/publication vide the newspaper is not contemplated by the law guiding the exercise of the appointment and delisting of tax practitioners in Nigeria.

    “An injunction restraining the defendant or any other committee that may be set up under the relevant provisions of the FIRS Act 2007 from taking any step or carrying out any action including the ones already published in the Tribune July 27, 2022, which is expected to be enforced on the 2nd day of October 2022 pending the final determination of the Appeal.”

    TheNewsGuru.com had earlier reported that said the mandate of the service is to collect taxes due to the federation and the Federal Government.

  • BREAKING: After public outcry, FG suspends proposed telecoms tax

    BREAKING: After public outcry, FG suspends proposed telecoms tax

    The federal government of Nigeria has suspended the proposed 5% excise duty on telecommunication services, according to the Minister of Communications and Digital Economy, Isa Pantami.

    TheNewsGuru.com (TNG) reports that Pantami disclosed this in Abuja on Monday during the inaugural meeting of the Presidential Committee on Excise Duty for the Digital Economy Sector.

    According to the minister, the telecommunications sector is already overburdened by excessive and multiple taxations.

    The Federal Government through the Budget Office of the Federation had earlier revealed that it would begin the implementation of its proposed excise duty on telecommunication services and beverages in 2023.

    the government gave a hint on July 28, that the five per cent would be added to the already existing 7.5 per cent Value Added Tax (VAT) on telecommunications services.

    However, Pantami maintained that the implementation of this tax would increase the cost of telecommunication services for Nigerians.

    Speaking during the inauguration of the committee, Pantami said that President Muhammadu Buhari granted his prayer for the immediate suspension of the 5 per cent excise duty.

    Pantami said: “It is because of this that the president had granted my prayers. He approved that a committee be constituted to look into the matter carefully and advise him accordingly.

    “The president has appointment me to be his eyes and ears in the sector. It is my responsibility to ensure we are just and fair to the operators, government and most importantly the consumers.”

    The minister, who serves as the Committee’s Chairman further told the members how he explained to the president the effect of the excise duty on the sector.

    “Of recent, it was announced that some of our respected brothers and sisters kick started the process of introducing excise duty in the telecom sector.

    “Based on the constitution and being the representative of  Buhari in the sector, I rejected that wholeheartedly.

    “I formalised my position and explained to him in a letter that could be referred to as a petition, because excise duty was usually fixed on luxury products

    “I told the president in a the letter that if care is not taken, that attempt will destroy the digital economy sector that is becoming the backbone of our economy,” he said.

    On why he kicked against the excise duty, he said in spite the achievements of the sector, it also had its challenges, which could be a barrier in its development in the next few years to come.

    “As of today, the ICT sector is over burdened by so many categories of taxes to the extend that there are 41 categories of taxes at the federal and state level, particularly in the telecom sector.

    “Beside, these taxes are multiple taxes. The same taxes being collected at the federal level is also what the states are insisting be paid to them.

    “If care is not taken, this is what will jeopardise the achievements and gains that we have recorded so far in the sector,”the minister said.

    Pantami added that prices of products and services in other sectors had increased significantly apart from the telecom sector in the last three years, because of the economic situation in the country.

    “The Mobile Network Operators have been coming to us to allow them increase prices of their products, but I have been encouraging them to be patient.

    “In these three years, there were more than 15 attempts to increase the price of telecommunications services and in all of them I retained my position saying no,” he said.

    Pantami announced the members of the committee to include the Minister of Finance, Budget and National Planning, Chairman, Federal Inland Revenue Services (FIRS),

    Others are Executive Vice Chairman (EVC) of the Nigerian Communications Commission (NCC) and Representative of all Telecom companies in Nigeria.

  • FCT-IRS clarifies taxing of residents of neighbouring states working in FCT

    FCT-IRS clarifies taxing of residents of neighbouring states working in FCT

    Mr Haruna Abdullahi, the  Acting Chairman, Federal Capital Territory Internal Revenue Service (FCT-IRS) says the law is clear on where residents working in other states pay taxes.

    Abdullahi gave the clarification when he appeared on the News Agency of Nigeria (NAN) Forum in Abuja, following concerns of multiplicity of taxes.

    NAN reports that there has been concern with regard to proper categorisation of people residing in neighbouring states like Nasarawa and Niger but working in the FCT.

    The FCT-IRS boss said the Personal Income Tax clearly stated that tax deductions should be done based on tax payers’ places of residence.

    He said “Section 22 of the Personal Income Tax stated that tax payment should be made where people reside.

    “For instance, we have employees in the FCT that are resident in places like Mararaba in Nasarawa State or Suleja in Niger State.

    According to the law, yes they work today in Abuja but their home and place of residence is outside Abuja.

    “So, according to Section 22 of Personal Income Tax, such persons would pay their taxes in Nasarawa State or Niger State as the case may be,” he said.

    Abdullahi said that while there were still grey areas in following the law to the latter, the Joint Tax Board (JTB) was working to ensure proper tax remittance.

    “It is an issue the Joint Tax Board is also trying to clarify because it is affecting a lot of states like Lagos , Ogun and probably Kano, Bauchi and Gombe.

    “That is one of the reasons why we are here to enlighten people and educate them about their responsibilities before taking action.

    “So, these are things we are working on.

    “The law provides for it but because these things continue to happen, the system will continue to see how it can enlighten people on it,” he said.

    Abdullahi called on residents caught up in such circumstance to report any tax deductions that were not properly categorised.

    He sad “if for instance a worker’s pay slip indicates tax deductions from Nasarawa State while the person resides in the FCT, a complaint should be lodged for proper categorisation.”

  • Nigerians to start paying 12.5% tax on calls, SMS, other telecom services

    Nigerians to start paying 12.5% tax on calls, SMS, other telecom services

    Nigerians will soon start paying a 12.5 per cent tax on making calls, sending SMS and other telecommunications services as the Federal Government plans to implement a five per cent inclusive excise duty on telecommunications services in Nigeria.

    The Minister of Finance Budget and National Planning, Mrs Zainab Ahmed, said this at a stakeholders’ forum on the implementation of excise duty on telecommunications services in Nigeria on Thursday in Abuja.

    The event was organised by the Nigerian Communications Commission (NCC)

    The five per cent will be added to the already existing 7.5 per cent Value Added Tax (VAT) on telecommunications services.

    Zainab, who was represented by the Assistant Chief Officer of the Ministry, Mr Frank Oshanipin, said the five per cent excise duty had been in the finance Act: 2020 but was not implemented.

    She said the delay in its implementation was a result of government engagement with stakeholders.

    “Payments are to be made on monthly basis, on or before the 21st of every month.

    “The duty rate was not captured in the Act because it is the responsibility of the President to fix the rate on excise duties and he has fixed five per cent for telecommunication services which include GSM.

    “It is public knowledge that our revenue cannot run our financial obligations, so we are to shift our attention to non-oil revenue.

    “The responsibility of generating revenue to run government lies with us all,” she said.

    Mr Gbenga Adebayo, Chairman, Association of Licensed Telecom Owners of Nigeria (ALTON) said the burden would be on telecommunications consumers.

    “It means that subscribers will now pay 12.5 per cent tax on telecom services, we will not be able to subsidise the five per cent excise duty on telecom services.

    “This is as a result of the 39 multiple taxes we already paying coupled with the epileptic power situation as we spend so much on diesel,” he said.

    Meanwhile, the President of the Association of Telecommunications Companies of Nigeria, (ATCON), Dr Ikechukwu Nnamani, said the five per cent excise duty on telecom services did not conform with present realities.

    Nnamani was represented by the Executive Secretary, Mr Ajibola Alude.

    He said that the state of the industry was bleeding and suggested that the five per cent excise duty be stepped down as it could lead to job losses.

    “t is not well intended, because the industry is not doing well currently,” he said.

    The Controller General of the Nigerian Customs (NCS), retired Col. Hameed Ali, who was represented by the Assistant Controller, Mrs Lami Wushishi, said all active telecom service providers would pay the five per cent excise duty.

    Executive Secretary ALTON, Mr Gbolahan Awonuga, said the five per cent excise duty was not healthy for the industry.

    Awonuga said that the telecom service providers were already paying two per cent of their annual revenue to the NCC.

    “We pay two per cent excise duty to NCC from our revenue, 7.5 per cent VAT and other 39 taxes.

    “We are going to pass it to the subscribers because we cannot subsidise it,” he said.

    The Executive Vice Chairman of the NCC, Prof. Umar Danbatta, in his remarks, said the excise Duty was to have been implemented as part of the 2022 fiscal policy measures.

    Danbatta said the industry had considered the earlier scheduled commencement date of June 1, inadequate and duly took this up with the Federal Government.

    He said the NCC had engaged with the federal ministry of finance, the Nigerian customs service and consultants from the World Bank to get needed clarifications.

    “These engagements enabled us to better understand the objectives and proposed implementation mechanisms of the excise duty.

    “We consider it imperative that these implementing agencies should also meet directly with telecom industry stakeholders to address areas of concern.

    “As the regulator of the telecoms industry, we are responsible for ensuring that industry stakeholders understand their fiscal and other obligations, so that they can maintain full compliance with government policy,” he said.

    He added that the excise duty covered both pre-paid and post-paid telecommunications services.

  • Millionaires demand higher tax on rich

    Millionaires demand higher tax on rich

    A group of more than 100 millionaires from nine countries along with international organisations and Oxfam on Wednesday called for wealth tax on the world rich.

    The groups Patriotic Millionaires, Millionaires for Humanity and Tax Me Now called on governments to “tax us, the rich, and tax us now”.

    Oxfam said revenue from the tax would help reduce extreme inequality and fund basic social services such as public health care, education and emergency aid.

    The Patriotic Millionaires published their letter to coincide with the World Economic Forum’s “Davos Agenda” series of events.

    The signatories reportedly include U.S. film producer and heiress Abigail Disney, Danish-Iranian entrepreneur Djaffar Shalchi, American entrepreneur and venture capitalist Nick Hanauer, and Austrian student and BASF heiress Marlene Engelhorn.

    A wealth tax that starts at only 2 per cent per year for millionaires and increases to 5 per cent per year for billionaires could raise 2.52 trillion U.S. dollars per year worldwide, according to data cited by Oxfam.

    In the letter they said “as millionaires, we know that the current tax system is not fair.

    “Most of us can say that, while the world has gone through an immense amount of suffering in the last two years.

    “We have actually seen our wealth rise during the pandemic yet few, if any of us can honestly say that we pay our fair share in taxes.”

  • How to bring small businesses into the tax net

    How to bring small businesses into the tax net

    The federal government has a burning desire to increase its tax revenue to enable it provide critical infrastructure and stimulate economic growth in the country.

    However, the Federal Inland Revenue Service (FIRS), the principal organ of government responsible for tax administration in the country, is having a tough time bringing Small and Medium Enterprises (SMEs) into the tax net.

    According to the National Bureau of Statistics (NBS), SMEs in Nigeria have contributed about 48 per cent – on average – to the national GDP in the last five years.

    There are about 17.4 million enterprises, accounting for about 50 per cent of industrial jobs and nearly 90 per cent of activities in the manufacturing sector.

    However, most operators of SMEs claim ignorance of tax laws and the appropriate taxes they ought to pay.

    For instance, Jumoke Eyitayo, who operates a shoe making business in Ikotun, Alimosho Area, Lagos State, says she does not pay tax simply because she does not know which tax to pay.

    “I do not know the tax to pay because there are too many taxes in Nigeria and I am confused and do not know which one to pay, and which one not to pay.

    “And again the government keeps changing the tax law; I hear that from next year more taxes and levies will be imposed on Nigerians.

    “This is not fair; it means there will be a new tax law when some of us do not even understand what the law is saying,” said Eyitayo.

    She urged the government to improve electricity supply and repair the bad roads across the country with tax proceeds.

    “I run my business on generator 24 hours and six days a week.

    “If government can sincerely provide these simple basic amenities for Nigerians, businesses will thrive and people will be happy and willing to pay whatever taxes they bring,” she said.

    Similarly, Barnabas Enahoro, who operates a Food and Beverage business in Bucknor, Ejigbo Area, Lagos State, said the government should provide information on taxation and create more awareness to ginger operators of small businesses to pay taxes.

    According to Enahoro, proceeds of taxation are supposed to help create a thriving environment that will encourage entrepreneurship and new businesses, “Instead, we are faced with a harsh environment that stifles growth and progress for businesses.

    “As a small business with staff strength of 12 and being in existence for the past four years, we were paying taxes in our first year in business.

    “But we stopped after we realised we were not having value for what we were paying for and we did not really understand why we were paying these taxes.”

    The tax conundrum has become a source of concern for the authorities.

    Mrs Olajumoke Simplice, immediate past president, Chartered Institute of Taxation of Nigeria (CITN), said the reason there was inertia was lack of political will by government to impact the lives of the citizens positively.

    According to her, when people in position of authority declare their taxes as and when due and from all sources, more Nigerians will be encouraged to pay taxes.

    She also said in some states where the taxpayers’ money was being reasonably applied, compliance was higher than in those that did little or nothing with revenues collected.

    “The high net-worth individuals, politically exposed personalities are not paying taxes or paying peanuts, while employees are paying to the last kobo.

    “The state of infrastructure, the rate of inflation, the fast erosion of earned income all add to the disenchantment of tax payers.

    “A situation where it is not mandatory for politicians to produce their Tax Clearance Certificate for them to contest for elective position, whereas, employees are mandated to produce the same for selective official or educational transactions is also a disincentive to tax compliance,” Simplice said.

    She urged the government to be accountable, transparent and lead by example.

    Mr Taiwo Oyedele, Africa Tax and Legal Services Leader, Price Water Coopers, said the government needed to earn the trust of Nigerians to get more businesses into the tax net.

    He said a research carried out by NESG-OSIWA DMR on all regions in Nigeria revealed many Nigerians lacked trust in government and the most untrusted government being the local government, followed by states, then the federal government.

    He said Nigeria’s revenue would grow when people were satisfied with public services, hence he urged the government put in more efforts to provide basic infrastructure.

    The tax expert said the research showed people also complained about the complexity of the process of tax collection, unprofessional and corrupt practices of tax officials.

    He said Nigerians would be willing to pay taxes if electricity issues among others were fixed.

    He said the government could address these challenges by developing a national integrated revenue approach to address the concerns regarding social contract and leverage technology to drive revenue, so as to let Nigerians see something for the little they were paying.

    He said the government could boost tax morale by improving information and communication about tax obligations, along with simplified and clean payment mechanisms so as to provide taxpayers with the confidence that their money was not being stolen.

    He also urged the government to stimulate economic development through robust policies and sound governance, and suggested the use of data and intelligence to ensure that those that had the capacity to pay, were paying their fair share of taxes.

    NAN

  • Uber, Bolt operators to be probed for tax compliance in Nigeria

    Uber, Bolt operators to be probed for tax compliance in Nigeria

    The House of Representatives has resolved to setup an ad hoc committee to investigate the level of compliance of Information and Communication Technology (ICT) aided Transport Companies with the country’s extant tax laws.

    The resolution was sequel to a unanimous adoption of a motion by Rep. Ganiyu Abiodun (APC-Lagos state) at plenary on Thursday.

    Moving the motion, Abiodun said that in the global economy, ICT was often regarded as a strategic tool for achieving success and competitiveness in organisations.

    “In recent times, ICT has had significant impacts on the way organisations operate, as it offers tremendous opportunities such as storing, processing, retrieving, disseminating and sharing of information,” he said.

    The rep said that ICT has made transportation business very accessible, cheaper and lucrative especially in the urban areas.

    “ICT has created many job opportunities for unemployed persons as the people’s desire for comfortable ride services have enabled companies such as Bolt and Uber spread widely across the country.

    “Many transportation activities now occur through online booking and payments which make the ordering of the services easier and efficient.

    “Informed that the average weekly earnings of Bolt and Uber drivers are about 60,000 to 120,000 while the companies take off 20 per cent and 25 per cent respectively as commission from the earnings of each driver operating on their platforms.

    “Cognisant that the companies have benefited from facilities of the Federal Government such as road and security network which grants them ease of doing business, thus they ought to be fully accountable and up to date in tax remittances,” he said.

    He said it was not clear whether the companies were fully compliant with the requirements of the Companies and Allied Matters Act, considering that the services were online.

    In his ruling, the Deputy Speaker of the house , Rep. Ahmed Wase said that the committee, when constituted was expected to report back within four weeks for further legislative action.