Economy

Auditor-General accuses Customs, FIRS of granting unauthorised waivers

—-says CGC Ali fails to answer 11 audits queries

Eyewitness reporter

The Auditor- General of the Federation(AuGf), Adolphus Aguhughu, has accused the Nigeria Customs Service(NCS) and the Federal Inland Revenue Service( FIRS) of granting unathorised waivers, amounting to billions of naira, which he said should have been part of the revenue accruable to the coffers of the Federal government.

In the 2019 Auditor General’s report with ref. AuGf/AR.2019/01 dated 18th August 2021 signed by Adolphus Aguhughu, AuGf, and submitted to the Clark to the National Assembly, the Auditor-General said the waivers were granted by FIRS and the Customs Service to some selected tax payers and importers as well as under remitting revenue collected to the government during the 2019 financial year.

According to the report, the Auditor-General said he observed that “from the review of waivers granted and other relevant records, that the sum of N17,223,453.56 only being part of import duty due to the Federation Account during the 2019 financial year was granted as waivers to fourteen (14) Staff of the Ministry of Foreign Affairs at 50% rebate” by the Nigeria Customs Service.

Adolphus Aguhughu furher noted that the Comptroller-General of Customs, Col(rtd) Hammed Ali refused to answer 11 audit queries posed to him by the office of the Auditor-General.

On the other hand,the reports said that records from the Federations Account Allocation Committee revealed that some companies were granted tax waiver and penalties by the Federal Inland Revenue Service (FIRS) in contravention of existing government circulars.

It said that despite directives, the FIRS was only able to recover the sum of N47.517bilion, while being unable to recover the balance of N23.703 billion which has been outstanding as of 23rd January 2019.

The report said the Executive Chairman of the FIRS failed to give reasons why the sum of N23.703 billion was still outstanding, adding that he should be asked to provide the list of companies that failed to pay the amount due against them.

The report said that the management of the Federal Inland Revenue Service only responded to two of the six audit queries issued to them by the Office of the Auditor General of the Federation while failing to respond to the remaining four queries.

The report further said that “the anomalies could be attributed to weaknesses in the internal control system at the Federal Inland Revenue Service” as it could lead to loss of revenue to the Federation Account as well as difficulty in funding the annual budget.

”The OAuGF wants the outstanding amount recovered and remitted to the Federation Account, while evidence of the remittance should be forwarded to the Public Accounts Committees of the National Assembly or appropriate sanctions be imposed on the Service.

According to the report, a review of Inflows into the Federation Account revealed that taxes paid through Paydirect owned by Interswitch showed details of taxpayers such as Tax Identification Number (TIN) and amount, while taxes paid through Remitta, E-tax pay, and eTranzact which were transferred to the Central Bank of Nigeria (CBN) directly did not reflect fully, details of the Tax Payers on the FIRS Webportal.

It said that the Executive Chairman of FIRS should be requested to provide reasons for the inability of the CBN to disclose details such as TIN, Name and Amount of tax payers remitted directly to the pool account.

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Economy

Discos gross N2.4trn revenue in 5 years amidst power outage

The Electricity Distribution Companies (Discos) raked in a total of N2.4 trillion as revenue between 2015 and 2020, the National Bureau of Statistics (NBS) has revealed.

According to the NBS, revenue generated by the DisCos in 2015 stood at N278.89 billion and rose to N303.03 billion in 2016, showing an 8.65 percent growth rate.

Also, in 2017, revenue generated by the Discos increased by 22.25 percent to N370.46 billion and further rose by 19.48 percent in 2018 to N442.63 billion.

It further increased by 9.03 percent in 2019, to N482.61 billion as well as a sustained positive growth of 9.15 percent when N526.77 billion was collected in 2020.

The statistical agency disclosed this in its June Electricity Report which presents statistics on electricity from 2015 to 2020.

The report focuses on customer numbers, metered customers, estimated billing customers, and most importantly, electricity supply and revenue collected under the reviewed period.

In the 2020 revenue receipt, the highest collection was by Ibadan Electricity Distribution Company (IEDC) with N102.10 billion. It was closely followed by EKEDC with N81.39 billion while the least collection was recorded in YEDC with N10.64 billion.

Nonetheless, electricity supplied to customers during the period of the review showed an unstable trajectory.

The NBS stated that in 2015, 20,337.40 Gigawatt hours (GWh) were supplied across Nigeria. This fell by 6.36 percent in 2016, when 19,044.30 GWh were supplied. Also, it rose in 2017 by 2.04 percent with 19,432.39 GWh and further rose in 2018 by 10.55 percent with 21,483.25 GWh.

In total, electricity supplied in 2019 stood at 22,450.67 GWh but declined in 2020 by 1.82 percent when 22,042.28 GWh were supplied.

The NBS pointed out that customer numbers under the reviewed period increased successively on a year-on-year basis, with the highest numbers recorded in IBEDC.

Generally, customers numbers rose from 6.99 million in 2015 to 10.37 million in 2020.

Similarly, the number of metered customers increased consecutively on a year-on-year basis from 3.15 million in 2015 to 3.80 million in 2019 but declined to 3.51 million in 2020.

In 2015, Benin Electricity Distribution Company (BEDC) recorded the highest number, while IBEDC stood top between 2016 and 2019 while Abuja Electricity Distribution Company (AEDC) recorded the highest in 2020.

The NBS said the estimated billing customer records also showed a year-on-year positive growth rate consecutively from 3.85 million in 2015 to 6.86 million in 2020.

It added that in 2020, the customer numbers were highest in IBEDC with 1,282,136 and lowest in Eko Distribution Company (EKEDC) with 269,022.

The Statistician-General of the Federation, Mr. Adeyemi Adeniran, said: “Today, with the overwhelming global demand for energy and the emphasis positioned by the Sustainable Development Goal (7) on access to energy for all places the need for statistics on electricity as a form of energy.

“Thus, electricity statistics remain a very useful tool for socio-economic planning and development, particularly for a developing economy like Nigeria. These numbers will provide an insight and shape policymaking on improving energy, specifically the electricity supply in Nigeria.”

The report further stated that the trajectory of metered customers had shown annual positive growth rates consecutively except in 2020.

In 2015, metered customers were 3.15 million and rose slightly by 0.23 percent in 2016. This also increased in 2017 and 2018 with 3.57 million and 3.58 million customers respectively.

Metered customers in 2019 stood at 3.80 million, showing a 5.96 percent growth rate, yet lower in 2020 when 3.51 million customers were metered.

Economy

AfCFTA Secretary-General allays fears of turning Nigeria into dumping ground

AfCFTA Sec.Gen, Wamkele Mene

Eyewitness reporter

The Secretary-General of the African Continental Free Trade Area(AfCFTA), Wamkele Mene, has allayed the fears of Nigeria over the possibility of being turned into a dumping ground for goods under the continental trade agreement.

Mr Mene, who stated this during the visit of the AfCFTA secretariat to Lagos ports Wednesday, said adequate measures have been built into the trade agreement to safeguard the country and other African nations from being turned into dumping grounds for foreign goods.

It could be recalled that it took Nigeria’s President, Mohammed Buhari to sign the trade agreement owing to fears being expressed by the government that Nigeria, as the biggest market in Africa, could easily be turned into a dumping ground under the continental trade agreement.

However, the AfCFTA scribe said though such fears are real, the agreement has taken care of its possibility.

He said the issue of dumping is a serious one but the agreement has given each country under the agreement powers to deal with the situation when it arises.

According to him, the agreement is intended to create jobs and not job losses, as dumping could lead to job losses.

“On the issue of dumping, it is a very very serious issue. This agreement is intended to create jobs, not job losses.

“So, we have to make sure that we are very vigilant against the transshipment of goods, against fraudulent invoicing.

” Any goods that are coming in that are not part of AFCTA, we should not hesitate to take action against such goods.

“That is why we are working closely with the customs authorities in Africa.

“In the agreement, there are rules: anti-dumping measures, all these rules are meant to protect domestic economies.

“If you see there is the importation of certain goods from certain countries, the agreement allows you to take action against those goods in that country.

“So we have built into the agreement safeguards to make sure that we minimize these.

“Fraudulent invoicing, and transshipment, like any other crimes, those things will always be there, the issue is to mitigate and make it difficult” Mr Mene declared.

He disclosed that in order to mitigate the issue of dumping, the AfCFTA secretariat is working closely with customs authorities in Africa to check against this menace.

“So we are working closely with the customs authorities, that is why we have hosted them in Accra, five times so that we can jointly together confront these challenges of the possibility of dumping of goods.

“What I always find interesting is that many times, we are willing to accept goods from a country whose name I would not mention that is not on this continent., substandard goods, goods that don’t meet our own requirements, these are the things we have to be vigilant against because it is not a Nigerian market, a Malian market, a Ghanian market, it is AFCTA market.

The AfCFTA chief said that dumping will not affect one county alone but the whole of Africa and that is why the secretariat viewed the issue with all seriousness.

“We are now creating one market, so if there is dumping in Nigeria, it impacts all of us. If it is dumped in another country, it imparts on all of us.

“So I really appreciate the sensitivity of this issue of dumping and I understand it.

“I mentioned in the previous session that in Southern Africa, there is a sugar that is being dumped from another part of the world that is being brought here, displacing the local market in Southern Africa, and creating job loss.

.”So we have to work together to make sure that we prevent this scourge of dumping” Mene stated.

Economy

Auditor General indicts MTN over evasion of Customs duty since 2021

—–as House of Reps knocks FIRS over operational infractions

The Office of the Auditor General of Federation has indicted the telecom giant, MTN, over evasion of payment of Customs duties since 2021.

This was contained in the 2019 queries issued by the office of the Auditor General of the Federation which was made available to the House of Representatives Committee on Public Accounts.

The committee also heard that the Federal Inland Revenue Service, (FIRS) received capital allowances claims by taxpayers without the certificate of acceptance from the ministry of trade and industries in 2019.

Speaking at the resumed hearing of the investigations on queries issued by the office of the Auditor General of the Federation against the Ministries, Departments and Agencies, (MDAs) of the Federal Government, the Chairman of the committee Hon Oluwole Oluwole Oke, lamented the level of external borrowings by the federal government, saying that the committee’s probe of public funds was aimed at curtailing revenue leakages to boost government treasury.

His statement was coming against the backdrop of tax evasion by the telecom service provider, MTN whose current assets stand at N2.68 trillion in the country, yet does not have proof of customs duty over the years.

The lawmakers also decried the issuance of an assets certificate by the Ministry of Trade and investment to the telecommunication firm without first evaluating their assets.

Following the failure of the MTN representative to tender the relevant documents to buttress his position that the company was up to date, the committee resolved to write the Nigeria Customs Service, (NCS) to furnish it with relevant documents, including MTN duty permit so as to ascertain the total amount it owes government since 2001.

Hon Oke, therefore, directed the Clerk of the Committee to write to the Management of the Nigeria Customs Service on the financial indebtedness of the firm to the federal government.