From Isaac Anumihe, Abuja
Nigeria is losing an average of $2.9 billion every year through tax incentives granted to multinational companies.
Speaking yesterday in Addis Ababa, Head of Policy Advocacy and Campaign Manager, Actionaid Nigeria, Mr. Tunde Aremu, said if the Federal Government was looking at reviewing its tax policies, it should focus on tax concessions given to multinationals.
Aremu said this in an interview with newsmen at the conference of African Ministers of Finance and Economic Planning organised by the African Union (AU) in collaboration with the United Nations Economic Commission for Africa, with the theme, “Towards an integrated and coherent approach to implementation of Agenda 2063 and the Sustainable Development Goals (SDGs).”
“What Nigeria is already losing yearly through the granting of tax incentives is an average of $2.9 billion. That is huge and unnecessary. We think it’s absurd that a country with a large population like Nigeria with purchasing power still thinks it needs to give tax incentives to attract investors.
“Nigeria’s population alone is enough incentive. So we don’t need to give any additional incentives to these multinationals. Nigeria needs to look at its tax policies in terms of the types of provisions it has that gives concessions to multinationals and other laws guiding the granting of incentives in Nigeria. Also, we’ve discovered that there are several agencies that play the role of granting incentives. This means we have several locations where treaties are being negotiated and signed. So there is need to streamline them for proper coordination,” he said.Aremu said Nigeria needs to also revise its existing tax treaties signed with countries. He said some of these treaties have become an avenue for huge corporate bodies to evade paying taxes, urging the government to address these issues because the money lost through incentives could otherwise be invested in projects that would create jobs and drive development.
In her remarks, Minister of State for Budget and National Planning, Mrs. Zainab Ahmed, said the Federal Government plans to review its existing tax incentive policies to further block revenue leakages accruing to it. According to Ahmed, with the current decline in oil revenue, the government had begun to look towards non-oil sector to finance its programmes, which was why only 30 per cent of the 2016 budget would be financed by the oil sector.
“The rest is coming from non-oil sector. That means we are strengthening our tax revenue collection agencies and processes. We are also expanding our tax base. We are trying to bring as many people and organisations that are in the informal sector not paying tax to come into the tax net.
We are also pulling back some of the waivers that we feel are absolutely unnecessary and are rather slowing down the economy and are simply a drain on our resources.
“We are also trying to bring in revenue that was not properly harnessed from government-owned enterprises that were before now, making money and spending it with little or no returns to the government. We have found the TSA (Treasury Single Account) very useful in that regard as we are able to see all the revenue that is generated by all the agencies,” she said.
Ahmed said the current administration plans to continue to finance its subsequent budgets through non-oil sector revenue, which was why it was very serious about blocking all leakages concerning tax.
…As Nigeria loses $1.5bn yearly to oil sector monopoly
By Uche Usim and Adewale Sanyaolu
Nigeria currently losses over $1.5 billion dollars due to the monopoly in the logistics and supply services sector of the oil and gas industry.
The staggering revenue loss was disclosed by the Chairman of Jagal Group, owners of Snake Island Integrated Free Zone (SIIFZ), and Nigerdock, Mr. Anwar Jarmakani, when the Comptroller-General, Nigeria Customs Service(NCS),Col. Hameed Ali(Rtd.) paid an official visit to SIIFZ.
The Jagal Group boss, lamented that the oil and gas supply and logistics service in Nigeria is the most expensive in the world, with the monopoly adding an extra cost of $3-5 per barrel produced in Nigeria, thus translating to over $1.5 billion per annum.
The $1.5 billion revenue loss is coming at a time that crude oil price is at its all time low, leading to cost saving measures by many International Oil Companies (IOCs).
Jarmakani regretted that the dominant monopoly in the Nigerian oil and gas logistics and supply services had existed for over 20 years, sabotaging the national economy, conspiring and working against any potential competitors, particularly against SIIFZ.
‘‘This monopoly has consistently and aggressively used different government institutions to compromise, maintain and entrench its monopoly position with impunity.
Regrettably, attempts have been made in time past to also use custom. We therefore appreciate the fact that the present administration is aggressively doing away with such impunity,” he said.
He argued further that the monopolist had over the last 20 years used a non-existent law to justify the assertion and false claim that ‘‘all oil and gas cargo must first be discharged at their ports of preference’’.
But in swift defense of the Federal Government, Nigeria customs boss Hammed Ali assured that if in the past certain things were done in utmost disregard to laid down laws and procedures, such would be looked into.
He said the NCS in line with the change mantra of the current regime will operate will fairness, equity and justice.
‘‘Having gone round the facilities you have here with my management and they being aware of your antecedents, I can assure you that all the issues that have been raised will be critically examined alongside the laws. And if there are any breaches along the line, rest assured that NCS under my leadership will address them,’’ Ali assured.
He noted that having been a local player in the oil and gas service sector for a long time, providing Nigerians with means of livelihood, the Federal Government will not deliberately put in place policies that will inhibit its progress.