FG loses $20bn to illegal waivers 

Minister of Finance and coordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala says the country has lost huge revenue to tax holidays fraudulently granted companies by officials of the Nigerian Investment Promotion Commission (NIPC).

Though the minister did not state how much revenue was involved, a top official of the Revenue Mobilisation and Fiscal Allocation Commission (RMFAC) told ThisDay that Nigeria may have lost over $20 billion between 2010 and 2014.

The minister’s disclosure was contained in a recent letter to NIPC Executive Secretary, Mrs Saratu Umar.

According to her, “The purpose of this letter is to appraise you on apparent abuse in the grant of Pioneer Status (tax holiday) to companies in the country by the Nigerian Investment Promotion Commission (NIPC) leading to decline in tax revenues,” wrote the minister in the letter that was copied the Minister of Petroleum Resources, Mrs. Deziani Alison-Madueke, and her Industries, Trade and Investment counterpart, Olusegun Aganga.

The minister noted that while oil companies were supposed to be taxed 65 per cent in accordance with the Petroleum Profit Tax Act (PPTA), certain officials of NIPC had fraudulently listed such companies under the Industrial Development (Tax Relief) Act and handed them pioneer certificates.

According to the minister, “Pioneer status (tax holidays) was granted to companies whose products do not meet the requirements of the list of industries or products specified in the schedule to the Act.”

She further noted that NIPC officials  granted tax holidays “for a straight five year- period, contrary to the provision of Section 10 of the Act which states that the tax relief period for a pioneer company shall commence from the production date of the company and shall continue for a period of three years in the first instance, and may be extended for a period of one year and thereafter for another one year, or for a period of two years subject to the satisfaction of Mr. President that certain requirements such as rate of expansion, standard of efficiency, level of development of company, among others, are met.”

Okonjo-Iweala regretted that, in some instances, NIPC granted Pioneer Status in arrears leading to beneficiaries of such demanding refund of the taxes already remitted into the Federation Account.

An official of the ministry told THISDAY that between 2010 and 2014, at least 15 oil companies were granted such tax holiday, and that the new NIPC boss has had a running battle trying to withdraw them.

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