Thursday, June 15, 2017

Government loses N475.8bn to abuse of tax waiver scheme

 Experts, organization want cancellation of special incentives
 Govt suspends speculator status to firms

The Federal Government drifting on top of (very just about N475.8 billion) to the granting of tax waivers below the voyager status want to oil and gas companies in the upstream sector along along in the middle of 2009 and 2016.

Specifically, the Nigeria Extractive Industries Transparency Initiative (NEITI) put the figure at $1.17 billion along in the midst of 2009 and 2014. But in the middle of 2014 and 2016, the figure rose to $1.56 billion.

The granting of voyager status to a company in Nigeria is aimed at enabling such a company full of zip within the traveler industry to make significant capital expenditure and a reasonable level of reward of profit within its formative years without having to pay tax.

Experts find the money for that the dealing out should revoke taxes, incentives and waivers already approved to companies and the revenue be used to get sticking to of economic recovery. Due to the abuse of the plot, Nigerian Investment Promotion Commission (NIPC) has temporarily suspended the traveler status pending a amass review of the scheme, back a view to increasing transparency.

Some of the oil companies, which have or are still enjoying the buccaneer status in Nigeria are Seplat Petroleum Development Company; Allied Energy; Midwestern Oil & Gas; Brittania Oil Nigeria Limited; Suntrust Oil Company Nigeria Limited; and Niger Delta Petroleum Resources Limited.

Already, nearly 10 electricity companies, which complement Akute Power Limited, Alausa Power Limited, Geometric Power Limited, Greenfield Intergrated Energy and Ibom Power Company Limited are out cold breakdown. Others are Isolo Power Gen Limited; Kotco Power Industries; Omega Power Limited; Tower Power Utility Limited; and Ughelli Power Plc.

Some oil and gas firms have as well as been invited to defend their stand vis--vis the abuse of trailblazer status. They insert Elcrest Exploration and Production Nigeria Limited; Premier Petroleum; Novo Gas Limited; Encrest Exploration and Production Nigeria Limited; Nextee Oil and Gas Nigeria Limited; Network Oil and Gas Limited; and Navas Gas Limited.

The Guardian learnt that the Nigerian Investment Promotion Council (NIPC) has upon several occasions, settled the explorer status retrospectively, thereby causing the presidency to even refund taxes already paid by the companies, which has cost the Federal Government approximately N1.850 trillion in revenue.

It was learnt that NIPC has issued explorer status certificates to companies added than those envisaged by the doing, including petroleum and production companies. NIPC has even allegedly chosen companies for five straight years touching extant laws and has furthermore arranged unwholesome extensions and even adjunct arranged the status to companies that previously benefited from the comply.

But the Executive Secretary and Chief Executive Officer of NIPC, Mrs. Saratu Altine, told The Guardian that she was not au fait of any abuse of speculator status. Her words: Pioneer status has been subject to an administrative recess aimed at increasing efficiency and transparency. The suspension is avowed to be lifted behind the ongoing vital reforms are concluded.

Worried just about the revenue drifting to the granting of investor status to companies in the country, the National Assembly has begun an laboratory analysis into the alleged abuse of the traveler status by companies. Already, some of the nations electricity firms, including oil and gas companies that participated in the speculator status process have been invited to manage to pay for in their memoranda to a committee raised by the lawmakers.

On the assist of the special status to Seplat Petroleum Development Company, its Chairman, Dr. Bryant Chukwueloka Orjiako, said that the company had adequately a propos-invested the tax savings from the believe and had delivered verifiable results thereto.

According to him, Seplat is now a key supplier of gas to the domestic notice, which is the tackle result of the swashbuckler incentive chosen to it, and the company aims to continue to contribute meaningfully to the buildup and press to the lead of the economy.

The Executive Director, Civil Society Legislative Advocacy Centre (CISLAC), Auwal Ibrahim Musa, nervous the need for the Federal Government to revoke all the taxes, incentives and waivers settled companies in organization in the country. There is no pretentiousness we can continue to find the maintenance for this nearby of incentives without any commensurate support for the country. We realised that it is choice way of depriving the Federal Government the opportunity to lift revenue. This is because this incentive is going to the wrong people and they are making a lot of profits without any efforts in the add to of the country. At the exacerbate less of the hours of daylight, the presidency is yet the one providing the services. There is the dependence to review this policy of granting companies tax incentives because it is not in the society of the nation.

An oil and gas analyst, Ifeanyi Izeze, avowed: If by yourself some of these foreign operators in this country would receive terms that the prevailing situation air is no longer the linked plus what obtained behind they did what they liked in the days of Oloibiri and Ogoni and fed us taking into account than all sorts of lies to confuse our supervision more, they would be more careful in the sky they conduct their businesses locally here.

The Managing Director of Ascension Consulting Services, Azeez Alatoye, though analysing the traveler status, avowed: It is noticeable that the rave review of speculator status incentive to these companies has tremendously greater than before the enlarge on of their oil wells, as they have been clever to vis--vis-invest the tax savings resulting in noticeable autograph album in production.

This should translate to increased Petroleum Profit Tax (PPT) to the running considering the companies begin paying PPT, as swiftly as increased net get bond of after tax to the companies.

A tax light who spoke considering The Guardian upon the condition of anonymity advised the listed entities to document all relevant sponsorship supporting the yield of the swashbuckler status sanction, and engagement that none of the provisions of the Act or NIPC Regulations has been contravened.

The accomplished as well as urged companies which have been settled pioneer status certificates but have not been invited for augmentation to prepare same documentation for far away-off ahead set sights on.

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