The Nation Newspaper

Tag: FIRS

  • $49.8b ‘missing’ oil cash: NNPC, CBN, others meet tomorrow

    •NNPC confirms generation of $67.12b , remittance of $18.48billion from January to July

    WORRIED by the tension generated by the allegation of missing $49.8billion oil money, the Nigerian National Petroleum Corporation(NNPC), Central Bank of Nigeria (CBN), Federal Inland Revenue Service (FIRS) and the Directorate of Petroleum Resources are due to meet tomorrow in Abuja to reconcile their accounts and records on the oil proceeds.

    The session will be monitored by officials of the Federal Ministry of Finance and the Budget Office.

    Speaking yesterday ahead of tomorrow’s meeting, the Group Executive Director (Exploration and Production) of NNPC, Abiye Membere, said that the corporation actually generated $67.12billion between January and July this year.

    Of this amount, the NNPC, according to him, remitted $18.48billion into the Federation Account.

    This, he said, was “in line with its mandate to deliver profit oil.”

    Membere, who spoke at a technical briefing of journalists in Abuja, said it was left to the CBN to tell Nigerians what other stakeholders like the DPR, FIRS remit into the Federation Account.

    He explained that the NNPC pays proceeds from Equity Crude directly to the Federation Account while the CBN, the FIRS and DPR pay Petroleum Profit Tax and Royalty into the Federation Account.

    He said the CBN should tell the public if the FIRS and the DPR made zero payment into the Federation Account within the same period under review.

    He said: “The current concern is between the CBN and NNPC. The CBN is claiming that $49.8billion is missing but we are going to meet by Monday or Tuesday to reconcile our records and accounts because payment for crude is done through letters of credit, it is not something you carry cash about.

    “The Monday session will involve NNPC, CBN, FIRS and DPR among others like the Ministry of Finance and the Budget Office.

    “On the CBN allegation, it is not yet a right or wrong allegation. If the $49.8billion is missing, we will sit to check records and ask where that money is. There is no bank in the world where you put $50billion and international creditors will not raise alarm. The issue is sitting together to reconcile all records. Maybe somebody must have overlooked certain things.”

    Responding to a question, Membere said: “If $50billion was not paid into the Federation Account, was this noticed within one month. How come the CBN did not alert NNPC or the Federal Ministry of Finance until now?

    “We did not know how the letter emanated because we meet on monthly basis and the Federation Account Allocation Committee meets monthly too. So, the records are there for all to examine. We will know the truth or otherwise when we meet on Monday.”

    On the figures used by the CBN Governor to arrive at its claim, Membere said: “He collated his figures from the National Export Supervisory Scheme and the Trade and Investment Department of the CBN.

    “But if there is any agency to manage the data pool, it is only the Directorate of Petroleum Resources because it supervises everybody in the oil industry.”

    Asked of how much the NNPC generated and what it remitted into the Federation Account, GED Membere added: “The total revenue generated from January to July was $67.12billion but based on the CBN Governor Lamido Sanusi’s figure, it was $65.33billion.

    “Of this amount, NNPC’s mandate is to deliver profit oil, which is $18.48billion. We have paid $18.48billion into the Federation Account.

    “What we have, as NNPC , is production target and it translates to certain amount on monthly basis.

    “We have a production target of 2.48million barrels per day but we are only meeting between 2.26m and 2.27m barrels per day because of the pipeline vandalisation and the environmental situation. No oil company will work as soon as you see a leak.”

  • Senate rejects FIRS boss nomination

    Senate rejects FIRS boss nomination

    The controversy trailing the nomination of the Chairman of the Federal Inland Revenue Service (FIRS) played up on Thursday in the Senate.

    The nomination of Mrs. M’fon Akpan by President Goodluck Jonathan for appointment as chairman of FIRS suffered a setback in the upper chamber.

    The Senate was forced by mostly Northern Senators to reject a motion to refer the nomination to the relevant committee for screening.

    Although most Northern Senators insisted that the rejection of the referral was the end of the nomination of Akpan, Chairman Senate Committee on Rules and Business, Senator Ita Enang, said the nomination was still pending on the floor of the Senate.

    Although, Senate Leader Victor Ndoma-Egba had moved that the consideration of the nomination be deferred to another legislative day, Senator Kabiru Marafa (Zamfara Central) opposed it.

    Marafa, who came under Rule 45 of the Senate Standing Orders 2011 argued that a motion to defer a matter to another legislative day can only be approved by a vote of two-third of the Senate.

    Deputy Senate President, Ike Ekweremadu, who presided over the session ruled Marafa out of order, saying it had not come to the time of raising an objection.

    “We are not taking any vote. So I completely rule you out of order. Can somebody second the motion so we can make progress,” Ekweremadu said.

    When the Senate Leader moved the motion a second time, it was seconded by Senator Boluwaji Kunlere (Ondo South).

    But the motion was roundly defeated by the lawmakers when it was put to vote as the “nays” had it.

    Obviously taken aback, Ekweremadu called on the Senate Leader to move the motion for the nomination to be forwarded to the relevant committee for necessary legislative action.

    Curiously, Marafa seconded the motion.

    But when it was put to vote by Ekweremadu that the nomination be sent to the relevant committee for necessary legislative work, the Senators again voted “nay.”

    Senator Enang explained that Akpan’s nomination is still valid because her confirmation and approval has not been rejected by the Senate.

     

  • Court declares tax tribunal illegal

    Court declares tax tribunal illegal

    A Federal High Court in Abuja has ordered the Minister of Finance, Dr. Ngozi Okonjo- Iweala to disband the Tax Appeal Tribunals established by the Federal Inland Revenue Service (FIRS) to adjudicate on matters relating to federal taxes and related revenues.

    The order is contained in a judgment by Justice Adeniyi Ademola, which declared the tax tribunal illegals. The judgment was on an appeal filed by a firm, TSKJ Construces Internacionals Unipessoal LDA.

    The judge held that the eight Tax Appeal Tribunals set up by FIRS were established in contravention of section 251 (1) (a) and (b) of the Constitution.

    TSKJ, a non-resident tax payer, was awarded a contract by the Federal Government for the construction of the Nigeria Liquefied Natural Gas (LNG).

    In executing the contract, the company set a local subsidiary – TSKJ Nigeria – which rendered logistic support service to it in the course of the contract.

    At the conclusion of the contract, TSKJ filed self assessment forms on deemed profits, on the basis that its profit could not be ascertained.

    The company made deductions on charges being the cost paid to its local subsidiary.

    FIRS disallowed the deductions made by TSKJ on the ground that the deductions were not allowed under the turnover basis assessment.

    FIRS consequently issued the company additional assessment on the ground that the deductions earlier made by the company were wrong.

    TSKJ objected to the additional deductions and filed an appeal at the Tax Appeal Tribunal, asking that the additional assessment be set aside.

     

     

     

  • Air Nigeria: I was never arrested by FIRS, says Jimoh Ibrahim

    Air Nigeria: I was never arrested by FIRS, says Jimoh Ibrahim

    •‘NICON Group sold airline’s shares in 2012’

    The Group Managing Director of Energy Group of Companies, Mr Jimoh Ibrahim, has denied reports that he was arrested and detained by the Federal Inland Revenue Service (FIRS) over N6.8 billion Air Nigeria allegedly owed it.

    He described the report as wicked, concocted and sheer imagination of the writer.

    Ibrahim, in a statement yesterday after the story went viral online, said the story, published by Sahara Report, was borne out of mischief and aimed at tarnishing his image.

    The businessman said he would have ignored the report but for need to put the record straight.

    He said: “Our company, the NICON Group, purchased 48 per cent shares of Air Nigeria sometime in 2010 and the FIRS came with alleged tax liabilities for the period of 2006 to 2010.

    “They claimed that he who buys assets buys the liabilities of the company. That was in 2012. We requested for reconciliation of the taxes, which was not conclusive.

    “We closed down the airline and sold our shares to a commercial bank in Nigeria. Rather than pursue the new owner for the taxes, the FIRS instituted a civil suit against me at the Federal High Court.

    “Whereas the same law of ‘who buys the assets, buys the liabilities’ should apply. This is why the FIRS should pursue the liability of Air Nigeria with the new owners.”

    On his encounter with officials of the FIRS, Ibrahim said: “…The FIRS’ Enforcement Unit yesterday solicited my assistance about the new buyer. I opted to give them the full details and documents.

    “Before I finished doing that, I read in Sahara Reporters that I had been arrested and detained for N6.8 billion fraud, which is not true.”

    The businessman explained that before he gave the FIRS the details of the new owners of Air Nigeria, the agency had alleged that Air Nigeria procured tax papers in 2010 for expatriates.

    “But I asked them how that concerned a board chairman. I asked them to ask the Executive Director (Finance), John Nnorom, whose responsibility falls under that.

    “We are genuine business people and we need a proper environment to operate our business. If I have committed any offence in becoming a non-executive chairman of a company like Air Nigeria where I do not have personal share, charge me to court and wait for the judgment of the court. If an officer of a corporation committed an offence, such as forgery of tax papers and it is true, look for the officer and charge him to court, not the board chairman of the corporation,” Jimoh added.

  • Insurers blame FIRS for excessive taxation

    Insurance operators have cried out over excessive taxation they are being forced to pay by the Federal Inland Revenue Services (FIRS), lamenting that the development was crippling the insurance business.

    The Nigeria Insurance Association (NIA) said FIRS imposes heavy taxes on premiums paid by the public, forgetting that when the unforseen happens, the insurance companies would pay claims.

    Spokesman of the association, Mr Davies Iyasere told The Nation that officials of the FIRS are ignorant of how insurance business operates.

    “Our claims are that they do not understand fully how insurance works. The tax they are charging insurance operators is (too) heavy. They tax all premiums we receive not minding the fact that we have to pay claim.

    “We have to invest the money paid as premium so that we can pay claims. Sometimes the claim occurs immediately or in the future. We have to make valuation and projections for 10 years and this is why we are saying they cannot tax on every premium collected. They are looking at premium and not claim and we believe this is not fair on insurers. We have reached the Inland Revenue and the channel of communication has been opened,” he added.

    To find solution to the problem, he said the NIA and the National Insurance Commission (NAICOM), the supervisory authority, are engaging the FIRS, adding that the association has also been speaking with the Consumer Protection Unit (CPU).

    He lamented that no progress has been made on finding solution to the problem.

     

  • FIRS enters partnership with Nollywood

    FIRS enters partnership with Nollywood

    DRAMA has long been identified as a useful tool for behavioural change communication. Little wonder the Federal Inland Revenue Service (FIRS) has decided to explore the vehicle of drama in its quest to achieve the utmost objective of bringing as many Nigerians as possible into the tax dragnet.

    Expectedly, to achieve this objective, the Service is partnering with the nation’s fledging movie industry, popularly called Nollywood, to produce series of movies on tax compliance.

    The series, entitled: Binding Duty with its first episode titled: The Ostrich Syndrome, attempts to help the Service to re-enact compliance drive geared towards getting the corporate bodies into its tax net.

    Starring Tina Mba, Norbert Young, Bimbo Manuel and a host of A-list stars, The Ostrich Syndrome centres around a local company known as Cedars and Ebony that has mastered the art of burying its head in the sand in the hope that the FIRS will ignore its tax infringements by sacking its accountants before tax or after tax evaluations as a gimmick to avoid paying tax.

    Unknown to the company, the FIRS which had stepped up its game easily saw through its antics and formally advised the company to approach it for tax reconciliation or risk closure.

    Naturally, the FIRS’ overtures fell on the company’s deaf ears until it was too late and the Chief Executive Officer, played by Bimbo Manuel, had to be taken away by officials of the FIRS despite his offer to pay his tax after his game was up.

    By coming out with The Ostrich Syndrome, the FIRS is reminding corporate Nigeria that it will continue with its tax enforcement strategy and no amount of burying corporate heads in the sand (like the proverbial ostrich is wont to do) will stop the Service from doing its duties.

    Shedding more light on the thematic preoccupation of the drama series, Mr. Emmanuel Obetan, Director of Communications and Liaison of the FIRS, said most of the stories in the series are based on true life cases handled by the FIRS.

    The real stories, he emphasised, “Have been fictionalised to protect the identities of the actual characters of the series but the essence, the import of the circumstances have been preserved in order to drive the objectives of the communication, the message, home; to communicate the need for every citizen to comply and perform their civic duties.”

    It may be recalled that in 2011, the FIRS launched a series of offensives against companies both public and private that were found wanting with their taxes including 13 hotel managers in Lugbe and Karu/Nyanyan areas of the Federal Capital Territory (FCT).

    The team, comprising FIRS enforcement officers and armed policemen, stormed 14 different hotels in the FCT, arresting the tax defaulters in line with its determination to boost the revenue earning of the Federal Government.

    Apparently re-enacting the scene, the leader of the team, Mr P. U Sule, noted that “the hospitality outfits had, after repeated visitations and reminder letters written to them by the FIRS to pay up their outstanding taxes, refused to comply and this necessitated the action.”

    Among the hotels raided at the time were Ajis Prime Resort, Garden Restaurant/Guest House, Regal Lodge, Christop Hotels, Airport Road Inn and Resort as well as Silver Gate Hotels, all located in Lugbe, and their managers arrested for all sorts of tax offences which ranged from failure to pay Value Added Tax (VAT), Pay As You Earn (PAYE), Company Income Tax (CIT), to outright refusal to obtain tax clearance from the FIRS before the commencement of operations.

    The team also visited Premium Guest House Ltd and Diato Hotels, both located in Nyanyan, and arrested their respective receptionists, Messrs Linus Anunwa and Hussein Momoh.

    There was, however, a mild drama in the latter outfit as Messr Hussein Momoh resisted arrest, with the claim that he was neither the manager nor the owner of the hotel and should not be arrested. He was almost practically dragged out of the office as the enforcement officers insisted that he had to go with them since neither the manager nor the owner was around.

    The team also visited Astot Leisure Gardens Ltd, Karu and Izy- King Hotels, Nyanyan but didn’t make any arrest. While the former outfit was said to have fulfilled some of its obligations to the FIRS aside the PAYE which was outstanding for some months, the owner of Izy-King Hotels, Barrister JJ Mohammed, was mandated to write an undertaking that he would submit the income and sales documents as well as salary schedule to the FIRS office to date.

    With regards to public sector agencies that defaulted on their tax obligations, the FIRS was at daggers drawn with the Federal Capital Development Authority and some agencies under it.

    During the meeting, the committee reviewed actions taken on the issue raised in their report and resolved to give FCDA ample opportunity to respond by addressing another letter giving the agency seven days within which to remit the outstanding tax liabilities of N28.276 billion or provide evidence of remittance within one week from the date of receipt of the letter to avoid embarrassment.

    The ultimatum given expired on Thursday December 15 2011. However, as at Monday December 19 the agency’s response was not received in contravention of the provisions of Section 26 and 27 of the FIRS establishment act, hence the Service was left with no option but to invoke the provisions of sections 29, 30 and 33 of the same act.

    First to feel the sting of the FIRS was the FCDA itself. After initial grandstanding, the Executive Secretary of FCDA, Engr. Adamu Ismaila, was whisked away by FIRS enforcement operative.

    It took the intervention of the Minister of the Federal Capital Territory to calm frayed nerves and he ordered the AGIS boss to present himself to the FIRS to resolve the matter.

  • Tax tribunal orders oil coy to pay N279m to FIRS

    Tax tribunal orders oil coy to pay N279m to FIRS

    The Tax Appeal Tribunal (TAT), South-South Zone, has ordered a multi-national oil company, Global Marine Baltic Incorporation, to pay the sum of $1,770,995 (about N279.8 million) as tax to the Federal Inland Revenue Service (FIRS).

    The judgement was delivered by a three-man Tax Appeal Tribunal headed by the Chairman, Mr Adenike Eyoma.

    In the judgment delivered yesterday, Mr. Eyoma said the amount represented the firm’s Company Income Tax liability for 1997, 1998 and 2000 respectively.

    Global Marine Baltic Incorporation had filed the suit on behalf of one of its subsidiaries, Global Marine Offshore Drilling Limited, following the additional tax assessment served on it by the respondent, FIRS on March 11, 2005.

    The company, through its counsel, Mr. Festus Onyia, had asked the tribunal for a declaration that the recharges brought against its subsidiary by FIRS do not form part of its revenue derived from Nigeria for the purposes of taxation under Section 26 of the Company Income Tax Assessment (CITA).

    Onyia had also asked the court for “a declaration that the inclusion of the recharges as part of the taxable revenue/profit of the appellant derived from Nigeria amounts to double taxation and therefore unjust, null and void.”

    Besides, he had prayed the tribunal to set aside the FIRS Notices of Additional Assessment dated Jan. 27, 2004. He made the submission on the grounds that its associate company, which they had engaged to provide logistic services in the execution of their Nigerian contracts, had already paid company tax on the same recharges.

  • Fresh campaign against tax evasion

    Fresh campaign against tax evasion

    Imagine this scenario:a young graduate, who lives off the wealthy sister, gets arrested for a traffic violation. The sister, a chief executive officer of a firm secures his release from custody. The young man abandons the sister’s home after helping himself to some of her hard currency.

    He then engages the services of a tout to secure a fake tax clearance certificate on the sister’s firm to bid for a contract in a Federal Government agency. Wondering why a company that has been compliant in tax payments would suddenly apply for a contract with a fake TCC, the FIRS investigates. The CEO of the firm is invited by the FIRS enforcement unit after the young man had been apprehended by the police.

    This captures the thrust of Born To Win, one of the 13 episodes in Binding Duty, produced by Ohi Alegbe and directed by Ihria Enakimio for the Federal Inland Revenue Services. The production of the TV drama is one of the new approaches to enlighten on the need for voluntary compliance among tax payers. Also, it must have been spurred by the low level of voluntary compliance by tax payers and the dire need by the services to shore up federal government’s dwindling revenue through taxation.

    One of the episodes, Short Cut, which focuses on how touts obtain fake tax clearance certificate from roadside printing press, shows how the FIRS is undergoing an in house cleansing exercise that identifies, investigates and sacks some staff members who connive with touts to subvert the system.

    Speaking at the screening of some of the episodes in Lagos, coordinating producers of the drama and an Assistant Director at FIRS, Mr Wahab Gbadamosi, said the project which started in 2008 is one of the subtle ways the services is adopting to cleanse the system while shoring up the revenue base of Federal Government.

    “The behavioural change is being pursued in the house and our clients are being focused for synergy. It is also an education platform that cuts across all strata of the society,” he said.

    According to another coordinating producer, Nneka Ifekwuna, the drama is preceded by in-house cleansing at the FIRS in order to effectively confront the challenges of enforcing compliance among tax payers. “We have to clean our table otherwise we will not be able to clean the nation,” she added.

    Other episodes of the drama include Burrowed time (focuses on unremitted VAT funds), To Have and to Hold (focuses on Withholding Tax proceeds), Ostrich Syndrome (focuses on tax arrears), and Double Jeopardy (focuses on personal income tax).

    According to Alegbe, the casts are returning to camp for shooting soon while the 13 episodes will run for 26 weeks.

    The efforts of the FIRS in this direction are worthwhile because no doubt, tax revenue collection remains critical to the growth and development of the country, as government alone cannot provide all the social amenities without contributions from the public. Also, it is high time the economy’s growth shifted from revenues from oil.

    Tina Mba, acted as Doorshima Jang; (FIRS Director). Other actors are Eric Obinna, Langley Evru and Tony Afokhai. Executive producers are Ifueko Omoigui-Okauru and Kabir M Mashi. Coordinating producers are Emmanuel Obeta, Wahab Gbadamosi and Nneka Ifekwuna. Director of photography is Abraham Adetutu while the Artistic director is Austin Awulonu.

  • Reps summon FIRS over N13.3b tax evasion

    Reps summon FIRS over N13.3b tax evasion

    The House of Reps Committee on Finance has summoned the Acting Executive Chairman of the Federal Inland Revenue Service (FIRS), Kabir Mashi, over N13.3b tax.

    The summon followed the failure of the FIRS boss to honour an earlier invitation by the Committee to brief the lawmakers on the evasion of Education Tax by Exxon Mobil Producing Nigeria Limited.

    The committee was seeking facts on a recent verdict by the Lagos Zone Tax Appeal Tribunal that ordered the oil company to pay N13.3billion Education Tax to the FIRS.

    Mashi was given till next Tuesday to present himself, while the meeting between the Nigerian Communications Commission (NCC) and the Fiscal Responsibility Commission (FRC) was also fixed for the same day.

    The NCC is to explain its inability to remit internally generated funds to the Consolidated Revenue Account.

  • FIRS to enforce tax payment

    FIRS to enforce tax payment

    The Federal Inland Revenue Service (FIRS) has warned that it would soon be compelled to invoke laws against taxpayers that refuse to voluntarily fulfill their tax obligations.

    Acting Executive Chairman, FIRS, Alhaji Kabir Mashi, made this known in Abuja yesterday at an interactive session with professional bodies in the Federal Capital Territory (FCT).

    The session was to facilitate partnership and collaboration between FIRS and professional bodies in order to fashion out voluntary tax compliance strategies to shore-up tax revenue collection.

    Represented by his Special Adviser on Taxation, Mark Dike, Mashi said the Service has “a reversed triangle in terms of the compliance model, as majority of our taxpaying public, be it individual, or corporate, do not want to comply. We are therefore left with the option of using strict force of the law to ensure compliance.”

    He said: “For the group of taxpayers that have chosen to remain non-compliant, FIRS has decided to engage with professional bodies to find ways of sanctioning taxpayers in such category.”

    He pointed out that Nigeria should not continue to depend on revenue from crude oil, adding that all professionals and their associations have one role or another to play towards the improvement of the Nigerian tax system.

    The FIRS boss said professionals must lead the message of voluntary tax compliance for both personal and company taxes, urging professional bodies to collaborate and cooperate with the FIRS to encourage their members to comply with taxation laws.

    “Voluntary compliance is the dream of every tax authority. Unfortunately, it is nearly impossible to achieve. Our review of compliance models of major economies of the world revealed that majority of their taxpayers are willing and ready to comply, hence they adopt strategies that would make compliance very easy,” he said.