Despite facing a financial crisis, which has compelled it to obtain huge foreign loans, the Federal Government has yet to recover about N8tn taxes withheld by international and local oil companies, Global System of Mobile telecommunication service operators, insurance companies, pension fund administrators, and gaming and betting companies.
The withheld revenue was uncovered by the Nigerian Financial Intelligence Unit.
Investigations by the agency indicated that an approximate Value Added Taxation of N3.9tn and withholding tax of N3.7tn had also not been paid to the government’s coffer as well as various other amounts in foreign currencies.
In a report submitted to the National Assembly detailing its activities and performance in 2021, which was obtained by Sunday PUNCH on Friday, the NFIU, however, said efforts to recover the revenues were ongoing.
The report stated, “The NFIU has within the period under review made tax disclosures worth about N8tn and we shared our findings with the honourable Minister of Finance, Budget and National Planning, and by extension, the Federal Inland Revenue Service for investigation and collection of revenue for the Federal Government.
“Based on analysis of the NFIU data, we identified an approximate VAT of N3,909,707, 678,112.43 and withholding tax of N3,737, 918,335, 785.82 due to the government. Other currencies identified are $728,468,256.65; €6,083,548.57; £2,084,625.15 and 140,784.23 rand. The FIRS confirmed that they made significant recoveries based on our intelligence. The investigation is ongoing.”
Our correspondent gathered that about N9.2bn had been paid by the debtors.
But efforts to get the latest recovered amount from the Federal Inland Revenue Service failed as the media aide to the Chairman, Tobi Wonuola, did not respond to inquiries despite promising to do so on Saturday.
The NFIU put the outstanding technology levy owed by telecom and insurance firms and others at N789.7bn.
“On the revenue due to the Federal Government, the NFIU analysed mandatory contributions, levies, dues, remittances from GSM service operators, insurance companies, pension fund administrators, and gaming and betting companies to be paid to the National Information Technology Development Levy totalling N789,781,246,148.15,’’ the report further stated.
A breakdown shows that 20 GSM firms with an inflow of N58tn owed N580.3bn and 201 insurance firms with an inflow of N9.9tn were indebted to the tune of N99.9bn.
On the other hand, 29 pension fund administrators with N10tn inflow have yet to remit N100.9bn, while 24 gaming and betting companies with an inflow of N851bn have not settled their N8.5bn technology development levy.
In the case of lottery abuses covering 82 companies, the agency said an approximate VAT of N20,333,173,589.69 and withholding tax of N17,663,803,947.99 were due to the Federal Government.
With the permission of the President, Major General Muhammadu Buhari (retd.), the agency said it reversed over $170m to 11 countries through exchanges.
Notably, the NFIU has returned about $94.6m to the United States in about 64 exchange cases.
Similarly, there was a reversal of $560,578.00 to Peru on 11 cases; $7,079,850 to Turkey on five cases as well as $753,229.40 and $603,205.00 to the Philippines and Germany, among others.
It reviewed the revenue generated from the IOCs and local oil companies and found that many of them had failed to remit the three per cent of their revenue to the Niger Delta Development Commission in violation of Section 14(2) b of the NDDC) Act, 2017 (as amended).
The oil firms were said to be indebted to the commission to the tune of N676.5bn, $5.8bn and £78,621.13.
In the same vein, the NFIU received 11,034 correspondents from 101 ministries, departments and agencies within the reporting period.
Likewise, it sent 1,165 intelligence reports on cases of corruption, money laundering and other serious offences to 27 domestic agencies for investigation, prosecution and asset recovery.
To enhance its operational effectiveness, the agency entered into a Memorandum of Understanding with some domestic agencies, including the office of the Accountant-General of the Federation, the Interpol, the National Lottery Regulatory Commission and the National Lottery Trust Fund.
A senior lawyer, Afam Osigwe, said tax evasion was a serious offence, adding that the NFIU could report the matter to the Economic and Financial Crimes Commission for proper investigation.
The former Nigerian Bar Association general-secretary stated, “Tax evasion or refusing to pay tax is an offence under the Company Income Tax Act and Companies Act. Now if there’s such a failure, I think it’s a matter that should be reported to the EFCC to investigate.
‘’A report can be made to the EFCC, which can be investigated as an economic crime. So, I don’t think that’s an issue we cannot handle because we have enough provisions in the law to deal with it. If the NFIU is right that they’re withholding taxes, then there’s an appropriate manner to activate the powers of the EFCC to investigate.’’
On his part, Rotimi Jacobs, SAN, argued that it was impossible for the companies to have withheld that much in taxes without collusion with government officials.
He added that the government should demand the payments and where the companies refused, they should be prosecuted.
Jacobs stated, “Is it possible in any country without any collusion with a public official for those oil companies to withhold that sum of money, without any collusion from the government, from the inland revenue service itself and from all the relevant authorities? It’s not possible.
“But I think the government, if they are serious, should proceed against those people. And then the normal thing is to demand for them to make those payments. And then if they don’t do so, they can proceed against them, criminally and civilly. But I know they would like to negotiate and settle.”
