Nigerian Electricity Regulatory Commission (NERC) has read the riot act to electricity distribution companies (DISCos), requesting them to transfer November last year’s opening cash and bank balances to the Nigeria Electricity Liability Management Company (NELCOM), remit deducted Value Added Tax (VAT) to the Federal Inland Revenue Service (FIRS) or pay fine of N10,000 per hour from October 17.
It would be recalled that aside Kaduna DISCo, the private owners who took over the successor companies on November 1, last year met some balances which NERC in the audit on the financial expenditures of the DISCos referred to as opening cash balance as at 1st November this year. NERC is seeking the transfer of the fund to the NELMCOM that manages the assets and liabilities of the defunct Power Holding Company of Nigeria (PHCN).
The Nation yesterday obtained the audit report in Abuja.
In a letter dated October 8, NERC Chairman, Dr. Sam Amadi expressed dissatisfaction with most of the expenditures and non-remittances of VAT to the FIRS.
Titled: Re: Open Book Review of Accounting/Financial Records for the Period of 1st November 2013 to 31st July 2014, it explained that the audit was conducted to ascertain compliance with the Rules for the Interim Period as amended in April this year and appropriateness of the expenditures embarked upon during the period under review.
Amadi ordered that “Abuja DISCo should immediately effect transfer of about N4,436,527,763 accrued interest of 13 per cent per annum with effect from December 1, 2013 to NELMCO being available cash/bank balances as at 31st October 2013.
“Evidence of remittance should be made available to the Commission on or before the close of business on Friday, 17th of October. Please be advised that failure to comply with the commission’s resolution shall attract a fine of N10,000 for every hour until eventual payment.”
He also asked the Abuja Disco to “immediately effect transfer of N753,237,761.60 plus accrued interest at 13 per cent per annum with effect from 1st December 2013 to NELMCO/MO in respect of outstanding 80 per cent October 2013 receivables collected in November in line with the Pre-Transaction Completion Agreement.
“Evidence of remittance should be made available to the commission on or before the close of business on Friday, 17the October, 2014.
“Please be advised that failure to comply with the Commission’s resolution shall attract a fine of N10,000 for every hour.”
In terms of un-remitted VAT, the chairman ordered that “Abuja DISCo should immediately effect remittance of N168,976,498.95 to the Federal Inland Revenue Service (FIRS) being unremitted VAT collections in respect of sale of electricity to consumers as of June 2014 and subsequent remittances of VAT collections for the period of July – September 2014.
“Subsequently, VAT collection shall henceforth be treated as first charge and remitted along with remittances of the Market Operations. Evidence of remittance should be made available to the commission on or before the close of business on Friday 17th October 2014. Please be advised that failure to comply with the commission’s resolution shall attract a fine of N10,000 for every hour until eventual payment.”