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April 29 - May 5, 2019

BUSINESS

FCT REPORT

Loopholes in tax system limits revenue collections -FG Stories by Sarah NEGEDU

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resident Muhammadu Buhari said government is aware of some of the loopholes in the Nigerian tax system, as reflected in the low revenue being generated from the sector. He said the federal government is taking steps to change the narrative by ensuring that the level of commercial activities in the country is reflected in its tax system. The President who was speaking at the opening session of the 21st annual tax conference of the Chartered Institute of Taxation of Nigeria, said the federal government would deploy dynamic initiatives towards boosting the country’s revenue from taxation. Represented at the event by the Permanent Secretary, Federal Ministry of Finance, Mahmoud Dutse, the President insisted that, “Our tax system must reflect the nature of our commercial activity levels. Oil is just above 10 percent of our GDP but it represents a disproportionate share of our tax revenue. “We will, therefore, develop a framework that mobilises revenue from the non - oil sector. Our tax system must be dynamic in order to respond to an ever evolving commercial landscape and to increasing technology driven business models. “As part of our drive to increase non -oil revenue, we have set an aggressive target for increasing tax collection. This is a reflection of the fact that the current level of compliance is low and in some cases, the effective tax rate paid by those that are compliant is lower than expected.” Buhari said his administration had been instrumental to critical reforms in the Nigerian tax system, through the introduction of the

Voluntary Asset and Income Declaration Scheme and the Voluntary Offshore Assets Regularisation Scheme. He said, “On the Voluntary Asset and Income Declaration Scheme, for instance, 5,122 applications were received, at the end of July 2018, when the

Scheme had gone through a 12 -month cycle and entered sunset. “Out of these applications, 1, 006 made full payment, 1, 613 had outstanding payments to make and 2, 503 fell under those who did not furnish adequate information on their tax status. “Arising from these a p p l i c a t i o n s ,

N92.67bIllion tax liability was declared. N34.67billion had been paid out of declared liability. The outstanding liability of N56.81billion will be paid in instalments. “In all, 16,906 assets were declared under VAIDS. Of these, 3, 317 are immovable assets, 13, 771 are moveable assets,

while 205 represented intangible assets and Investments.” He called for a change of attitude by Nigerians towards the payment of taxes, adding that situations where people deliberately refused to pay their taxes were inimical to the objectives of the government to grow the economy.

L-R: President, Smith Graham, Ms Donna Sims Wilson, CBN Governor, Mr. Godwin Emefiele and Director General, Debt Management Office, Ms. Patience Oniha during an evening with the CBN Governor at the just concluded Spring Joint Meeting of the IMF/World Bank in Washington DC. Photo: Wale Elekolusi.

SIM registration: 95mn cards valid, undergoing verification

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he Nigerian Communications Commission, NCC, has cleared the air on the supposed invalidation of over 95million Subscriber Identity Module, SIM, cards, explaining that the affected cards are merely undergoing some form of verification. The regulator claims that the 95.7million affected SIM cards reported in sections of the media were figures from initial scrubbing exercise, adding that subsequent process enhancements by the NCC and operators however led to better quality submissions. Some media had reported the NCC to have declared 95.7million SIM cards invalid due to improper registration, with a call to affected SIM cards owners to go back to registration centres for proper capturing. However, NCC said in

a statement said that improperly registered SIM cards are valid but only undergoing scrubbing and verifications. “The attention of the Nigerian Communications Comm-ission has been drawn to media reports to the effect that 95.7million subscriber registrations are invalid. Understandably, this needs further clarification for the benefit of subscribers and other critical stakeholders who rely on subscriber registration data. “The Commission therefore wishes to clarify that the process of scrubbing registration data submitted by operators is an ongoing one and that so far, over 60million records have been “scrubbed” successfully. ‘Scrubbing’ in telecoms parlance refers to the screening process of

verifying biometric and personal information submitted by all operators in respect of each of their subscribers. The regulator explained that although the figures quoted in the news reports were disclosed at a Sensitization Workshop to illustrate the quality of initial data s u b m i s s i o n s , subsequent process enhancements by the NCC and operators have led to better quality submissions. “The process is ongoing, and is constantly being reviewed for higher efficiency. NCC disclosed the outcome of its initial scrubbing exercise at the Sensitization Workshop in order to underscore the need for subscriber registration agents and operators to ensure strict adherence to the Subscriber Registration

Regulations of 2011 as well as the technical specifications for subscriber registration. Executive Commissioner, Stake-holder Management of NCC, Mr. Sunday Dare, was reported to have said 95million subscribers have had their SIM data improperly captured by the telecoms operators, fuelling crimes like kidnapping in the country. Dare was quoted at the South South regional sensitisation workshop on the dangers of fraudulently activated SIM cards organised by the commission in Port Harcourt, to have said, “A total of 151,449,837 registration data of subscribers have been processed, with only 55,749,652 records valid, making 63.2 per cent of the total records invalid based on invalid face capturing and fingerprints.”

No plan to remove fuel subsidy yet –Minister

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espite the allege increase on the landing cost of petroleum and the IMF recommendation to end the fuel subsidy regime in Nigeria, the federal government maintains that there is no plan to remove fuel subsidy at this time. The International Monetary Fund, IMF, had advised Nigeria at the just concluded Spring Meetings in Washington DC, USA, to end the subsidy regime and free up more resources for educational projects. The Minister of Finance, Mrs. Zainab Ahmed, has assured that the current subsidy arrangement which was in the form of under recovery by the Nigerian National Petroleum Corporation, NNPC, was far better than what was obtainable when oil marketers were paid directly for fuel subsidy. Ahmed, in a statement by her Special Adviser on Media and Communication, Paul Ella Abechi, said, “NNPC is the sole importer of petroleum products, and so when they import it is the cost of business and they deduct that cost before they remit the little money to the federation account. So that is completely different. “It is more cost effective, it is cheaper and what is being done now is easier to monitor what transpired. “We are not there yet and we discuss this periodically under the Economic Management Team. But we have not found a formula that works for Nigeria and you know Nigeria is unique because what works in Ghana may not work in here. “So, it is still work in progress and so there is no intention to remove fuel subsidy at this time.” On borrowing, the Minister said Nigeria’s debt which currently stands at about N24.3trillion is still within sustainable limit.

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