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CBN, Finance Ministry must ensure multinational companies pay tax- Expert



  • As School feeding programme in 9 states gulps N3.7bn — Presidency

An Economic expert, Prof. Emmanuel Nnadozie said the Central Bank of Nigeria (CBN) and Ministry of Finance must ensure that multinationals companies operating in the country pay their taxes in full.

Nnadozie, the Executive Secretary, African Capacity Building Foundation (ACBF), said this in Abuja on Sunday.

The expert was speaking on ways to address the menace of Illicit Financial Flows (IFFs) in the country.

According to him, illegal movement of cash out of the country, never to return is robbing Nigeria of the resources needed to achieve major development.

He said that as a matter of urgency, this act must be stopped if the country was to improve its domestic revenue to achieve the Sustainable Development Goals and the African Union’s Agenda 2063.

“In tackling IFFs, institutions such as the government, legislature, civil societies, judiciary and international organisations are strategic.

“In Nigeria, the front line institutions must be the Ministry of Finance and the CBN.

“The Federal Inland Revenue Service (FIRS)  is under the Federal Ministry of Finance, so the minister must sufficiently supervise FIRS to make sure that multinationals operating in the country pay their fair share of tax.

“The CBN must take responsibility, be well equipped to monitor money flows out of this country,” he said.

Nnadozie said that the country also needs to establish a Transfer Pricing Unit dedicated to understudy the various ways money was being trafficked out of the country.

“IFFs leaves the country and the continent through commercial transactions, corruption and crime.

“For crime, it could be through all kinds of trafficking activities and other illegal activities. For corruption, people can simply steal money that belongs to the country and go and put it in tax havens or secrecy jurisdiction.

“Also, multinational companies through their commercial activities, do this through transfer mispricing, tax avoidance, or profit shifting.

“If you look at the magnitude involved in these three categories, people will think that corruption will be the biggest source of IFFs, but it’s actually commercial activities.

“Nearly more than half of IFFs is through this Channel, therefore it is important to pay attention to the dealings of the multinationals who will do everything in the world to avoid paying their taxes,” he said.

Nnadozie called on the National Assembly to improve existing laws or draft new ones with stiffer sentences for any kind of tax offence .

He cited the case of Ethiopia,  which had life sentence for tax avoidance.

He also urged the government to strengthen the judiciary as well as the Auditor-General to improve enforcement.

Nnadozie advised the government to invest in capacity building of its workers to boost their confidence in dealing with multinationals.

He said the multinationals had skilled, intelligent and well paid people working day and night to help them avoid tax, so the government must also  improve staff welfare as well as training.

It will be recalled that in Africa, tax avoidance has been identified as one of the factors holding the continent backwards as it starves government of the necessary revenue it needs for development.

A report by the Former South African  President, Mr Thabo Mbeki, who chairs a United Nations panel on IFFs, showed that Africa was being robbed of about 50 billion dollars annually.

Similarly, findings by Actionaid Nigeria shows that Nigeria is one of the worst hit countries, losing about N2.9 billion dollars, (N890.3 billion) annually.

In Nigeria, many multinational companies operating in the oil and gas, banking as well as communications sectors have been accused of transfer,  mispricing, tax avoidance, or profit shifting.

In the meantime, the Presidency on Sunday said it has so far spent N3.7bn on the Homegrown School Feeding Programme, which is one of the components of the present administration’s Social Investment Programme.

It said the sum had been released to nine out of the 36 states of the federation for the feeding of about 1.3million pupils in the states.

The Senior Special Assistant to the acting President on Media and Publicity, Mr. Laolu Akande, disclosed this in a statement made available to journalists in Abuja.

A total of N500bn was allocated to the SIP in the 2016 budget while the same amount had been provided for it in the yet-to-be signed 2017 Appropriation Bill.

The feeding programme is projected to feed over three million pupils this year.

Akande named the nine benefitting states as Anambra, Enugu, Oyo, Osun, Ogun, Ebonyi, Zamfara, Delta and Abia.

He said the states had, at the last count, received various sums in tranches while 14, 574 cooks had been engaged in the communities where the schools were located.

He added that the money was paid directly from the Federal Government’s coffers to the cooks with a slight variation in Osun State, where some of the food items like eggs were bought centrally by an aggregator.

He said, “The overall payments to each of the nine states and the breakdown figures of how many children have been fed so far are as follows:

“Anambra State got a total of N693,013,300 in eight tranches of N53,684,400, N67,462,500, N68,570,600, N70,387,100, N70,950,600, N71,480,500, N145, 238, 800 and N145, 238, 800, respectively while a total of 103,742 children have been fed so far.

“The total release for Enugu State is N419,427,200 in six tranches of N67,244,800, N67,244,800, N69,570,900, N69,570,900, N69,570,700 and N76,225,100 respectively while 108,898 school children have so far been fed.

“For Oyo State, a total of N414,708,700 have been released for the feeding of 107,983 pupils in six tranches of N72, 288,300, N66, 622, 500, N66,736,600, N66,736,600, N66,736,600 and N 75,588,100 respectively.

“In Osun State, N767,483,244 was released in eight tranches of N58,299,130, N62,089,580, N49,671,664, N62,089,580, N62,089,580, N49,217,310, N212,013,200 and N212,013,200 respectively for the feeding of 151,438 pupils.”

In the case of Ogun State, Akande disclosed that a total of N880,055,400 had been paid in seven tranches.

This, he said, comprised of N119,648,900, N119,648,900,  N119,648,900, N119,648,900, N119,648,900, N119,648,900 and N162,162,000 respectively while a total of 231,660 schoolchildren had been fed.

In Ebonyi State, he said N 344,633,100 had been paid in three tranches of N115,218,600, N115,218,600 and N114,195,900 respectively for the feeding of 163,137 school children

He said Zamfara, Delta and Abia states got a total of N188,001,100, N63,366,100, and N42,921,200 for the feeding of 268,573; 90,523 and 61,316 pupils respectively.

Akande said the last three states were the latest to join the programme.

Additional report from Citizen


NEPZA Boss Says Nation’s Free Trade Zones Not Really `Free’



The Nigeria Export Processing Zones Authority (NEPZA) says the country’s Free Trade Zones are business anchorages that have for decades been used to generate revenues for the Federal Government.

Dr Olufemi Ogunyemi, the Managing Director of NEPZA, said this in a statement by the authority’s
Head of Corporate Communications, Martins Odeh, on Monday in Abuja, stressing that the the widely held notion that the scheme is a `free meal ticket’ for investors and not a means for the government to generate revenue is incorrect.

Ogunyemi said this public statement was essential to clarify the misunderstanding by various individuals and entities, in and out of government, on the nature of the scheme.

He reiterated the authority’s commitment to enhancing public knowledge of the principal reason for the country’s adoption of the scheme by the NEPZA Act 63 of 1992.

“The Free Trade Zones are not hot spots for revenue generation. Instead, they exist to support socioeconomic development.

“These include but are not limited to industrialisation, infrastructure development, employment generation, skills acquisition, foreign exchange earnings, and Foreign Direct Investments(FDI) inflows,” Ogunyemi said.

The managing director said the NEPZA Act provided exemption from all federal, state, and local government taxes, rates, levies, and charges for FZE, of which duty and VAT were part.

“However, goods and services exported into Nigeria attract duty, which includes VAT and other charges.

“In addition, NEPZA collects over 20 types of revenues, ranging from 500,000 dollars-Declaration fees, 60,000 dollars for Operation License (OPL) Renewal Fees between three and five years.

“There is also the 100-300 dollar Examination and Documentation fees per transaction, which occurs daily.

“There are other periodic revenues derived from vehicle registration and visas, among others.

“The operations within the free trade zones are not free in the context of the word,” he said.

Ogunyemi said the global business space had contracted significantly, adding that to win a sizable space would require the ingenuity of the government to either expand or maintain the promised incentives.

“These incentives will encourage more multinational corporations and local investors to leverage on the scheme, which has a cumulative investment valued at 30 billion dollars.

“The scheme has caused an influx of FDIs; it has also brought advanced technologies, managerial expertise, and access to global markets.

“For instance, the 52 FTZs with 612 enterprises have and will continue to facilitate the creation of numerous direct and indirect jobs, currently estimated to be within the region of 170,000,” he said.

Ogunyemi said an adjustment in title and introduction of current global business practices would significantly advance the scheme, increasing forward and backward linkages.

“This is with a more significant market offered by the Africa Continental Free Trade Agreement (AfCTA).

“We have commenced negotiations across the board to ensure that the NEPZA Act is amended to give room for adjusting the scheme’s title from `Free Trade Zones to Special Economic Zones respectively.

“This will open up the system for the benefit of all citizens,” he said.

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2023 CLPA: Policy Cohesion Imperative For Implementation Of AfCFTA Agreements, Others



Some policy experts and stakeholders have called for policy cohesion across Africa for the successful implementation of multilateral policy decisions.

They spoke on Wednesday during one of the plenaries at the 2023 Conference on Land Policy in Africa (CLPA), held in Addis Ababa.

The CLPA, the fifth in the series, is organised by the tripartite consortium consisting of the African Union Commission (AUC), the African Development Bank (AfDB), and the United Nations Economic Commission for Africa (ECA).

The 2023 edition has the theme, ‘Year of AfCFTA: Acceleration of the African Continental Free Trade Area Implementation’.

Dr Medhat El-Helepi (ECA), chaired the plenary with the sub-theme: ‘Land Governance, Regional Integration, and Intra-Africa Trade: Opportunities and Challenges’.

Panelists at the plenary included Dr Stephen Karingi, Director, Regional Integration and Trade, ECA; Mr Tsotetsi Makong, Head of Capacity Building and Technical Assistance, AfCFTA Secretariat.

Others were Mr Kebur Ghenna, CEO, of the Pan African Chamber of Commerce and Industry (PACCI) and Ms Eileen Wakesho, Director of Community Land Protection at Namati, Kenya.

The event also attracted various stakeholders, including traditional leaders, Civil Society Organisations, and policy decision-makers.

Makong expressed worries over the reluctance of some participants to openly discuss some matters, pleading ‘no go areas of domestic affairs’.

He, however, noted that the issues of land were within the limit of domestic regulations, adding that tenure land security was the solution that would allow intra-African investment that is still low in Africa.

Makong pointed out that the success of the investment protocol under the AfCFTA would depend on countries’ domestic laws that should be in line with the AfCFTA.

“There are guidelines on land reforms that need to be turned into regulations within the domestic systems.

“Policy coherence has to be at the heart of what we do. This can be achieved by engaging everyone including women and youth at the grassroots level.

“Also, you cannot be talking of AfCFTA as of it is just about Ministers of Trade, Economy or Investment. The idea is a totality of the entire governance structure. This is very important,” he said.

Speakers also noted that inclusive land governance was one of the key pillars to enhance Africa’s drive to improve intra-African trade, food security, and sustainable food systems.

They said an inclusive governance system would allow stakeholders to create transparency, subsidiarity, inclusiveness, prior informed participation, and social acceptance by affected communities in land-based initiatives beyond their borders.

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SOLID MINERALS: Alake Revokes 1,633 Mining Titles, Warns Illegal Miners



The Minister of Solid Minerals Development, Dr Dele Alake, on Tuesday, announced the revocation of 1,633 mining titles for defaulting on payment of annual service fees.

Alake made this known at a news conference in Abuja on Tuesday, saying his decision was in compliance with the law, the Mining Cadastral Office (MCO) on Oct.  4, began the process of revoking 2,213 titles.

“These included 795 exploration titles, 956 small-scale mining licences, 364 quarry licences and 98 mining leases.

“These were published in the Federal Government Gazette Number 178, Volume 110 of Oct. 10 with the notice of revocation for defaulting in the payment of annual service fee.

“The mandatory 30 days expired on Nov. 10. Only 580 title holders responded by settling their indebtedness.

“With this development, the MCO recommended the revocation of 1, 633 mineral titles as follows: Exploration Licence, 536; Quarry Licence, 279; Small Scale Mining Licence, 787 and Mining Lease, 31.

“In line with the powers conferred on me by the NMMA 2007, Section 5 (a), I have approved the revocation of the 1,633 titles,” the minister said.

*Dele Alake, Minister of Solid Minerals

He said that the titles would be reallocated to more serious investors.

He warned the previous holders of the titles to leave the relevant cadaster with immediate effect.

He said that security agencies would work with the mines inspectorate of the ministry to apprehend any defaulter found in any of the areas where titles had been revoked.

“We have no doubt in our mind that the noble goals of President Bola Tinubu to sanitise the solid minerals sector and position the industry for international competitiveness are alive and active.

“We appeal to all stakeholders for their co-operation in achieving these patriotic objectives and encourage those who have done business in this sector the wrong way to turn a new leaf.

“Ultimately, the Nigerian people shall be the winners,” he said.

According to Alake, It is indeed very unconscionable for corporate bodies making huge profits from mining to refuse to give the government its due by failing to pay their annual service fee.

“It is indeed a reasonable conjecture that such a company will even be more unwilling to pay royalties and honour its tax obligations to the government.

“The amount the companies are being asked to pay is peanut compared to their own revenue projections.

” For example, the holder of an exploration title pays only N1,500 per cadastral unit not exceeding 200 units. Those holding titles covering more than 200 units pay N2,000 per unit, In short, the larger the area your title covers, the more you pay.

“This principle was applied to ensure that applicants do not hold more than they require to explore.

“With a cadastral unit captured as a square of 500 metres by 500 metres, any law-abiding title holder should not hesitate to perform its obligations,” he said.

The minister said that every sector required a governance system that regulated the conduct of its participants, the procedures for entry and exit, the obligations of the government to participants and the penalties for non-compliance.

He said that the philosophy of the Nigerian Minerals and Mining Act 2007 was to establish a rational system of administering titles transparently and comprehensively to ensure a seamless transition from reconnaissance to exploration and from exploration to mineral extraction.

“The principal agency for the administration of titles is the MCO, which receives applications, evaluates them, and issues titles with the approval of the office of the minister of solid minerals development.

“Although the MCO has tried to improve its efficiency by adopting new application administration technology, it continues to face challenges in monitoring the compliance of title holders,” he said.“Although the MCO has tried to improve its efficiency by adopting new application administration technology, it continues to face challenges in monitoring the compliance of title holders,” he said.

He warned illegal miners to desist from their illegal activities as their “days were numbered”. 

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