BUSINESS
FG Insists Nigerians must Pay Tax
By Joseph Amah, Abuja
The Federal Government has said there is no way Nigeria can attain economic growth without the citizens paying their taxes as and when due.
The Vice President, Professor Yemi Osinbajo stated this yesterday while declaring open the 24 annual tax conference of the Chartered Institute of Taxation of Nigeria (CITN) in Abuja.
The Vice President who was represented by the Executive Chairman of the Federal Inland Revenue Service (FIRS), Muhammad Nami, said the present administration has come to realise that without the citizens promptly paying their taxes, it will be difficult for the government to meet its obligations.
According to him, “Previous administrations had depended almost wholly on oil for revenue, but when we came in, based on the lessons we learnt from the recent market trends that crude oil, like other commodities is not a sustainable source of government revenue, we have shifted attention to tax.
“What we have learnt is that if we must make progress as a nation all of us must pay our taxes for the sake of national development to foster harmony and economic growth.”
The Vice President said every Nigerian must be prepared not just to pay their share of taxes but also to ensure that all others do the same.
He said that the theme of the conference which is global disruptions, Taxation and Digitalisation: Implications for Socio-economic Development, captures the prevailing realities within the national and global space.
“Nigeria’s economy is fast digitalising. This means that the way and manner of doing business has changed. Indeed the radical change is brought about by digitalisation which has made useless the traditional approach to tax administration,” Osinbajo said.
He added that, “The digitalisation of tax administration is unavoidable, that is why our government has continued to heavily invest in the automation of tax administrative processes and digital infrastructure.
“It is in the best interest of the country that the government at all levels have enough revenue. The lingering issue of insecurity, crimes and criminality, inadequate social infrastructure can only be addressed if there is adequate revenue in the hand of government.”
He commended the CITN which he said is a critical member of the taxation ecosystem in Nigeria.
As he puts it, “Taxation is a key driver of social harmony, political stability and economic development and growth.
“Your Institute is a pillar for socio-economic development and the emancipation of the down trodden of the society. It is my belief that your members will continue to discharge their responsibilities of ensuring that the interest of the larger society is not trodden upon, this you must do with patriotic zeal.
“I therefore urge you to support the government and FIRS in the drive towards full digitalisation of the tax administrative processes. That is why in 2021, the President directed all stakeholders including MDAS to support the tax automation drive of the FIRS.
“Therefore I call on the CITN and every Nigerian to comply with tax rules and encourage others to comply and report those not complying so that we can build the Nigeria of our dreams. We must therefore take our destiny in our hands.”
Earlier in his welcome address, President of CITN, Mr. Adesina Adedayo said the COVID-19 pandemic that hit the world in 2020 was a major disruption of the global economy which governments of the world are still struggling to come to terms with.
According to him, “The unprecedented disruptions brought about by COVID-19 pandemic leading to global economic downturn has created new realities which governments, businesses and tax agencies are struggling to contend with.
“As tax professionals, we should be more resilient and professional in profering lasting solutions to mitigate these disruptions.”
He expressed misgivings over Nigeria’s refusal to sign the 15 point Organisation for Economic Co-operation and Development Base Erosion and Profit Shifting (OECD-BEPS) Action Plan, particularly action plans 5, 6,13 and 14 which he said form the implimentation of the OECD-BEPS Project 4 minimum requirements which include harmful tax competition, treaty abuse, country by country reporting and alternative dispute resolution respectively.
He warned that Nigeria’s resort to reciprocal jurisdiction has its own implications in the disruption of the global tax space.
Chairman of the Tax Conference Committee, Mrs Ruth Arokoyo in her speech said the conference has been packaged to address some salient issues on the application of technology to optimize tax revenue in businesses.
Speaking in an interview, the immediate past president of CITN, Dame Gladys Olajumoke, said this is time for Nigerians to begin to ask questions about how the tax money they paid is used by government to provide for the good of the society.
In her words, “We need to start interrogating spendings by government. We need to make them know that people will voluntarily pay tax if they see what the tax is being used for.
“It is absurd, every day Nigerians hear N10 billion stollen, N100 billion stollen and so on, it will not encourage anybody to pay tax.
But when we can interrogate how government is spending tax money, we build confidence.”
She expressed joy at the turn out at the conference which she said is a sign that Nigerians are getting interested in tax matters which is why they want to learn more.
She said that the outcome of the conference would be submitted to the authorities and followed up to ensure they are enforced.
The conference which will end on Friday was attended by tax professionals from across the country.
The Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) has directed its members to comply with the directive of the two labour centres to begin an indefinite nationwide strike on Monday.
Its General Secretary, Mr Afolabi Olawale, in a statement on Saturday, said the union was committed to ensuring total compliance with the directive.
Recall that the Nigeria Labour Congress (NLC) and Trade Union Congress of Nigeria (TUC) declared an indefinite nationwide strike to begin on Monday, to express their grievances over the proposed new minimum wage.
.In a joint statement signed by NLC President, Mr Joe Ajaero and TUC President, Mr Festus Osifo, the centres declared the strike over the tripartite committee’s inability to agree on a new minimum wage and the hike in electricity tariff.
Afolabi said the union was concerned and disturbed with the insensitive attitude of the federal government “to the very critical issue of negotiating a new minimum wage for Nigerian workers”.
“This is in view of the various socio- economic policies of this administration that have impoverished the working people of this country.
“Leaders of our great union at all levels, from the units, zones and branches, should immediately put all processes in place to ensure total compliance with this directive.”
Also, the National Union of Electricity Employees (NUEE) said it was mobilising its members to embark on the strike following the directive of NLC and TUC.
The Acting. General Secretary, Mr Dominic Igwebike, gave the directive to the members in a statement.
Igwebike said that along with the reasons of inconclusive negotiations on the minimum wage and electricity tariff hike, apartheid categorisation of Nigeria electricity consumers into bands was another, to embark on the strike.
“Given the above, all national, state, and chapter executives are requested to start the mobilisation of our members in total compliance with this directive to ensure the government does the right thing as stated above.
“The withdrawal of services becomes effective on Sunday 2nd June by 12.00 midnight, “ the union leader said. (NAN)
Oando Plc, an energy solution provider, has posted a turnover of N3.4 trillion in its 2023 full year-end unaudited financials.
The figure represents an increase of 71 per cent when compared to N1.9 trillion posted in 2022.
Mr Wale Tinubu, Group Chief Executive Officer, Oando Plc, said this in a statement on Saturday in Lagos.
Tinubu said that over the last four years, the company consistently recorded a positive incline in turnover.
According to him, the company’s turnover stood at N477.1 billion in 2020 and grew to N803.5 billion in same period of 2021.
He also said that the energy company later posted N2 trillion as turnover in 2022 and N3.
4 trillion in 2023 respectively.Tinubi said although the year 2023 saw oil and gas companies impacted by spikes in incidences of militancy and sabotage, the company was still able to also record a Profit-After-Tax (PAT) of N74.7 billion in the year under review.
He stated that the result indicated a positive turn in the company’s fortunes in comparison to the preceding year when the company posted a loss after tax.
Tinubu said that in spite of the persistent pipeline vandalism across the Niger Delta, which ccontinued to dampen crude production, the company achieved an outstanding profit in 2023.
According to him, this was largely driven by increased trading volumes due to the company’s strategic global partnerships.
Also, the net foreign exchange gains on the group’s foreign currency-denominated assets as against losses on its foreign currency-denominated liabilities drove the positive performance.
Tinubu stressed that the year 2023 had seen Oando push forward with its growth agenda, recording positive highlights.
This, he noted, included the signing of a Sale and Purchase Agreement (SPA) with Italian oil major, Eni.
Tinubu explained that this would allow it to acquire one of its local subsidiaries, the Nigeria Agip Oil Company Ltd.(NAOC).
He added that the firm’s clean energy arm, Oando Clean Energy Ltd.(OCEL) launched its electric mass transit buses in partnership with the Lagos State government, signalling that things were beginning to look up for the Indigenous giant.
The group’s chief executive said that more significantly the release of the company’s 2023 financial results, albeit unaudited, finally brought the company a step closer to being in line with regulatory requirements for all listed companies.
He stated that it indicated that by the end of the year, the company would have been on track with its peers in reporting results, giving confidence to shareholders and investors in the company’s current state and future.
“Furthermore, our milestone signing of the Sale and Purchase Agreement with Eni towards the acquisition of 100 per cent of the shares of NAOC Ltd, marked a pivotal moment for our organisation.
“It is poised to unlock substantial synergies soon.
“Our focus is now on completing the acquisition and seamlessly integrating operations to deliver exceptional value to our shareholders,” he said.
According to him, while the country saw a decline in national oil output, precipitated by pipeline vandalism, oil theft and illegal refining, the Oando’s upstream operations saw an average daily production increase.
Tinubu revealed that the energy company’s upstream operations average daily production increased marginally by one per cent to 20,837 boepd in 2023, as against 20,703 boepd in 2022.
He said these production numbers comprised oil production at 6,024 bbls per day, compared to 4,939 bbls per day in 2022.
The group’s chief executive stated that natural gas production stood at 14,572boe per day in the year under review, compared to 15,292boe per day in 2022 financial year, while NGL production was 241bbls/MMscf/day, compared to 472bbls/MMscf/day posted in 2022.
He said: “In its trading operations, Oando marked improvement, recording a 50 per cennt increase in traded crude oil volumes of 32.8 million bbls in 2023, compared to 21.8 million bbls in 2022.
“The company however posted 15 per cent decrease in traded refined petroleum products which stood at 1,645,535 MT, compared to 1,937,833 MT recordes in 2022.”
Tinubu noted that having weathered the storm of recent years, the 2023 results provided a foundation for the energy company to consolidate and build for the future.
He stated that with its planned acquisition of NAOC, the company was positioned to take full operatorship and drive-up outputs, value and efficiencies.
“Moreover, our foray into and leadership in clean energy expand our footprint as a fit and proper integrated energy company with our feet firmly planted in today’s realities and the possibilities of the future,” he added. (NAN)
By Tony Obiechina, Abuja
In a strategic move to address the identified gaps in the Electricity Distribution Companies (DisCos), the Federal Government has secured a $500 million loan from the World Bank.
In a statement by Head of Public Communications, Bureau of Public Enterprises ((BPE) Amina Tukur Othman on Thursday, approval for the facility was given by World Bank Board of Directors on February 4, 2021.
According to the statement, “this funding supports the Nigerian Distribution Sector
Recovery Program (DISREP) aimed at improving the financial and technical
performance of the DisCos”.
The Distribution Sector Recovery Program is designed to enhance the
financial and technical operations of the DisCos through capital investment and
the financing of key components of their Performance Improvement Plans (PIPs),
which have been approved by the Nigerian Electricity Regulatory Commission
(NERC).
Key areas of improvement include:
• Bulk procurement of customer/retail meters and meter data
management systems.
• Implementation of a Data Aggregation Platform (DAP).
• Strengthening governance and transparency within the DisCos.
• Program Components
• The DISREP comprises two main components:
• Program for Results (PforR):
• Allocation: $345 million
• Purpose: Support the implementation of selected PIP components.
Others include
• Implementation: Bureau of Public Enterprises (BPE)
• Investment Project Financing (IPF):
• Allocation: $155 million
The Purpose is to finance the procurement of meters, a Data Aggregation
Platform, and Technical Assistance.
The DISREP loan, particularly the Investment Project Financing (IPF) component, is expected to significantly benefit the Nigerian Electricity Supply Industry (NESI) by:
• Closing the metering gap
• Reducing Aggregate Technical, Collection, and Commercial (ATC&C)
losses
• Improving remittances and liquidity for the DisCos
• Enhancing the reliability of power supply
• Increasing transparency and accountability within the DisCos.
The $500 million DISREP loan from the World Bank offers concessional financing
with more favorable terms than commercial bank loans. This will enable the DisCos to:
1. Invest in critical distribution infrastructure.
2. Improve ATC&C losses.
3. Increase power supply reliability.
4. Achieve financial sustainability in the power sector.
5. Enhance transparency and accountability.
The statement further explained that significant progress has been made in the preparation of the DISREP Program, with several key milestones achieved, and approval by the Federal Executive
Council (FEC) on August 3, 2022. execution of the Financing Agreement by the
Federal Ministry of Finance, Budget and National Planning, and the World Bank,
adoption of the Program Operations Manual (POM) by BPE and TCN, obtained
Legal Opinion from the Attorney-General of the Federation, Execution of the
Subsidiary Loan Agreement, effective declaration of the DISREP Program on
January 31, 2023, inauguration of the DISREP Technical Committee on May 6,
2024, inclusion in the Federal Government Borrowing Plan, approved by the
Senate Committee on May 16, 2024.
To ensure repayment assurance, the Bureau of Public Enterprises sought and
obtained approval from the Nigerian Electricity Regulatory Commission (NERC)
and the National Council on Privatisation (NCP) for a structured repayment
hierarchy.
The structure prioritizes payments including, Statutory Payments (Taxes), Repayment of CBN market loans, Market obligations , Repayment of DISREP loan and DisCos’ net revenue.
This structured repayment plan aims to mitigate risks associated with repayment
uncertainty and defaults, with regulatory sanctions imposed for any defaults.
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