House to probe NIPC over N1.85trn tax waiver

In from Ali Smart . . .
The House of Representatives has concluded plans to probe the Nigerian Investment Promotion Council (NIPC) over the N1.85trillion pioneer status ‘income tax relief’ it granted in the last six years
Ripples learnt that the lower chamber has mandated its Committee on Finance (when constituted) to investigate the issuance of pioneer status granted over the past six years with the view to determine if there had been abuses and recommend ways to recover the lost revenues.
In a motion brought to the floor of the House by a member, Herman Hembe (APC-Benue) resulted in the resolution.
Hembe said the NIPC “has in the last four years failed to adhere strictly to sections of the law establishing the agency which stipulates that companies with pioneer status be granted tax relief only for a three year period.”
According to him, Section 1 of the Investment Development (Income Tax Relief) Act 17 and Companies Income Tax Act vests power on the President to grant pioneer status or tax relief as incentives to investors interested in under-explored sectors of the economy, considered to be important to the growth of the economy.
He further said Section 10 of the Investments Development Act further provides that tax relief period shall be for three years from the first day of production by the company with option for extension for another year or two years.
He said the income tax relief which was designed to attract and keep investors, has been severally abused with the NIPC in some cases, retrospectively granting tax waivers even as some companies were issued tax relief upward of five years.
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“The NIPC had on occasions granted pioneer status retrospectively thereby causing the Federal Government to even refund taxes already paid for by companies, which has cost the federal government about N1.850 trillion,” the lawmaker said.
Sequel to the adoption of another motion sponsored by Uchechukwu Nnam-Obi and 13 other lawmakers yesterday, the House mandated its committees on Gas Resources and Petroleum Resources Downstream (when constituted) to conduct a comprehensive review of relevant government policy initiatives aimed at curbing gas flaring and assess such in order to determine if they conform to global best practices.
The Green Chamber also directed that the Permanent Secretary, Federal Ministry of Petroleum Resources, Taiye Haruna should appear before it.

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Nnam- Oni said “the absence of Nigerian delegation at the ‘Zero Routine Gas Flaring Initiative held on April 17th, 2015 in Washington DC, USA, and the country’s inability to sign the treaty, the cardinal objective of which is to end gas flaring by oil companies by 2030 is a major cause for concern.”
He noted that 10 multinational oil companies, six global development institutions and nine nations, such as Norway, Cameroun, Russia, Kazakhstan, Gabon, Congo, Angola and a host of other major industry players were all in attendance while Nigeria with serious gas flaring issues was not represented.
“The initiative strives to get governments, oil companies, and developmental institutions to see gas flaring as unsustainable as it constitutes waste of resources, poses grave environmental dangers to the people and also detrimental to the climate, and thus, agree to cooperate to eliminate routine flaring not later than 2030,” the lawmaker told his colleagues.

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