Speaker of the House of Representatives, Yakubu Dogara
| credits: http://www.nta.ng
| credits: http://www.nta.ng
The
House of Representatives said on Tuesday that the Federal Government
had lost about N1.850tn revenue in tax relief granted to companies
enjoying “pioneer status” incentives in the country.
The House noted that the loss came from
disregard for extant laws on the policy by the Nigerian Investments
Promotion Council in the past four years.
An All Progressives Congress lawmaker
from Benue State, Mr. Herman Hembe, while moving a motion on the issue,
called for an investigation into the details of the abuses.
He stated, “Section 1 of the Investment
Development (Income Tax Relief) Act, 2014, and the Companies Income Tax
vest powers on the President to grant pioneer status or tax relief as
incentives to companies designated as pioneer industries.
“This is to encourage and stimulate
growth in the under-explored sectors that are considered important to
the growth of the economy.”
He added that the laws provided that
such a relief “shall be for a period of three years from the first day
of production by the company with an option for extension for another
year or two years.”
However, Hembe informed the House that
in the last six years, the NIPC had issued pioneer status certificates
to companies not envisaged by law.
He added that among such beneficiaries not covered by law were petroleum exploration and production companies.
Hembe added that the council also
“granted unwholesome extensions and even further granted the status to
companies that had previously benefited from the grant.”
Hembe also told the House that the NIPC
went further to grant pioneer status “retrospectively” to some companies
with the result that the Federal Government had to refund taxes already
paid by such companies.
“This has cost the Federal Government about N1.850tn in revenues,” he added.
Members voted massively for the motion,
passing a resolution to investigate the alleged abuses of the pioneer
status policy in the past six years.
The House also resolved to look into the
Joint Venture Operations between the Nigerian National Petroleum
Corporation and oil companies with reference to “leakages” in revenue
due to the Federal Government in the past seven years.
The House observed that both the Federal
Government, through the NNPC and oil firms, had an agreed formula on
the lifting of oil and sharing of accrued revenues.
However, Mr. Nicholas Ossai, who moved
the motion on the subject, complained that there were revenue windows
either unaccounted for or not paid into the distribution pool by oil
companies.
The motion partly read, “The House is
concerned that income from such sources as sale of assets, marine
transportation, haulage or pipeline transportation, among others, which
form part of the JVOs, is unaccounted for and not usually paid into the
distribution pool by the oil companies, which are the operators of the
JVs.
“These sources of JV income amount to
billions of naira or millions of dollars (particularly haulage or
pipeline) as the case may be;
“The operator-company net off these
incomes against expenses (already settled), allegedly in collusion with
officials of the NNPC to avoid remittance of the income to the
Federation Account.”
In a separate resolution, the House
summoned the Permanent Secretary of the Ministry of Petroleum Resources,
Taiye Haruna, over Nigeria’s absence at the meeting of the Zero Routine
Gas Flaring by 2030, held on April 17 in Washington D.C.
According to Mr. Uchechukwu Nnam-Obi,
who brought the matter to the attention of the House, the meeting was
launched by the Secretary-General of the United Nations, Mr. Ban
Ki-Moon.
The House wondered why Nigeria, a
country “faced with severe challenges arising from unbridled gas
flaring” by oil majors, did not attend the meeting.
Lawmakers at the session, which was
presided over by the Speaker, Mr. Yakubu Dogara, passed all the
resolutions in a majority voice vote.
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