…as NNPC asks Senate to boost FG revenue by law
he Chairman of the Federal Inland Revenue Service (FIRS), Mr. Mohammad Nami, has disclosed that Nigeria lost about N1.3 trillion to three investors through tax waivers in the last five years.
Nami, who disclosed this in Abuja, during the maiden meeting of the Senate Committee on Finance with heads of revenue generation agencies of the government, tasked the Upper Chamber to tackle through legislation, the issue of revenue leakage via waivers.
That was as the Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Mele Kyari, urged the Senate, to revolutionize the oil and gas sector by passing the Petroleum Industry Bill (PIB), into law.
Commenting on why the FIRS was not able to meet its revenue targets in the past years, Nami blamed it on slow economic growth occasioned by insecurity in the country, decayed infrastructure and lack of conducive business environment.
He frowned at the tax waivers being granted to investors and businessmen whose enterprises were flourishing, saying that it was costing the country huge revenue loss.
Consequently, he appealed to the Senate to intervene and plug this loophole through legislations, so that the country would have enough revenue to fund her projects on annual basis.
He said: “The failure of the FIRS to meet its revenue targets in the past was not unconnected with the issue of slow but steady economy growth, mostly fueled by insecurity, decayed infrastructure and lack of conducive environment or ease of doing business.
“This has resulted in dwindling resources, and with the recent passage of the Finance Act into law, our ability to collect taxes may be challenged because our tax base has been eroded by the exclusion of small and medium enterprises from the tax nets. This has always been compounded by the activities of multi-national corporations.
“The Senate should also look at issues of legislation with respect to tax waivers and incentives, particularly the players in the oil and gas industry. When I assumed office, I discovered that through these waivers alone, government lost a total sum of N1.3 trillion in just three sectors in the last five years.
“This is just three out of myriads of waivers being granted businessmen. And these are people that are doing well. They make a lot of money from Nigeria; yet they are granted waiver. There should be legislations to deal with that.
“We also have the issue of inadequate funding of our operations. This is actually affecting our performance negatively. We have about 10,000 employees, and we really need proper funding to be able to perform optimally”.
Also speaking on how to boost the country’s revenue base, the NNPC boss, said that the non-oil revenue sectors of the economy depended largely on the viability of the oil and gas industry.
He therefore, urged the Senate to help energize the sector, so that it could propel a lot to economic activities in other sectors which would equally generate huge revenues for the country.
His words: “There is a connection between oil and non-oil revenue generating agencies. Most of the revenues collected by the FIRS come from the petroleum resources. The easiest way to get more revenue from the revenue generating agencies is to collect more VAT, more petroleum profit tax.
“The Chairman of the FIRS can confirm that most of the revenues he collects actually come from petroleum resources. Therefore, getting more revenues from other agencies of government and institutions requires that we energize the oil and gas sector, so that it can engineer other sectors.
“To make this thing to work, my recommendation is that you help us pass the Petroleum Industry Bill (PIB) because the absence of that has actually led to the situation we have today, which is absence of activities in the oil and gas industry.
“It is activities in this sector that create activities in the banking sector and other sectors of the economy. Bankers will have money to lend to others.
“The oil and gas sector is the only industry that can have one project that can cost $12 million. There is no other sector that can do that today in our country. Investments are very low today because investors are not sure of the fiscal environment. And until we resolve that, we will continue to witness marginal investments.
“We will do our best in terms of revenue generation but this Ninth Senate should make history by changing these laws that have been with us since 1967, to a more current and more functional legal framework; so that activities can come back”.