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FIRS Boss Reveals Multiple Revenue Collection Agencies Responsible For leakages

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By Gloria Ikibah
The Executive Chairman of Federal Inland Revenue Service (FIRS), Zach Adedeji, has said that the collection of revenue by over 60 government agencies is the major cause of leakage of funds.
Adedeji who disclosed this when he appeared before the House of Representatives Committee on Finance, chaired by Rep. for bugdet hearing, said this duty should solely be the responsibility of the Service to ensure greater accountability in the system.
He asserted that other revenue collection agencies of government should focus on their various core mandates; and further advocated for a single window method of tax collection to make the process less cumbersome and check the loss of government funds.
According to the FIRS boss, one of the challenges facing this was lack of verifiable data in the country.
He said a bill would be sent to the National Assembly to ensure all Nigerians have one single number of identification.
He said, “We are doing a lot of reforms including the single window because if you look at FIRS, what we collect mainly is company income tax. The problem we have is that we do not have verifiable data in the country. So one of the major things we are doing which hopefully in the next two weeks or one month maximum, a law would be sent to the House to change so that all Nigerians must have one single number of identification which by law today is NIN. The plan is to make sure everything we do as citizens is linked directly to this NIN. This would also help address issue of tax leakage.”
Adedeji said the Services was given a mandate to collect the sum of N10 trillion based on the Medium Term Expenditure Framework (MTEF) that was passed in 2023 which was reviewed upward to N11 trillion during the year.
He noted that the Service was able to deliver N12.3 trillion as the revenue collected for the year 2023 which was 11 percent above the target set by government.
Adedeji said the performance was as a result of the internal reform that they embarked upon and the favourable economic policy decision by the President.
The FIRS Boss said the mandate of the Service for 2024 through the MTEF is to collect N19 trillion which is an additional N7 trillion compared to what was collected in 2023.
He said the bulk of it is coming from positive projection from oil and gas revenue.
He however said if this ambitious target of N19 trillion is to be met there is need to restructure the service to be more focused.
Adedeji said, “So instead of having types of taxes, what we do now is to categorise by the turn over which is customer focused. Now we have large tax if your turnover is above N5 billion. Between N1 and N5 billion is medium and anything less than N1 billion is a small tax payer.
“The reason for this is simple. We want to provide a one stop shop for tax payers. Where one can do all forms of taxes. This would reduce multiple audits and distraction to the businesses. It is our intention that 80 percent of core service job is done by the service.
“The tax to GDP is very low compared to our peers and that is why we have to come up with those reforms that Mr President has approved. One of it is the setting up of that tax reform committee. What we see is that in other climes, you have single revenue collecting agents. But here in Nigeria we have more than 62 agencies collecting one way or the other on behalf of Federal Government.
“And when you see people focussing on revenue instead of going to their area of strength, when everybody tries to collect, the leakage is all there. Two is the law that we have. Most of them are obsolete. For example the digital tax that we are talking about there is no law in Nigeria that empowers us to effectively tax all these digital businesses which we know is on the rise.
“Also our processes, Mr Presidnent approved that going forward we should pay our contractor’s directly instead of moving money to MDAs, most especially capital funding. What that would do is that we can deduct tax and also help us in cash management.
“We are also doing a lot of reforms including the single window. Because if you look at FIRS what we collect mainly is company income tax which is result of the difference between cost of sales and gross sales. But cost of sales if inflated means you would have less profits and less taxes.
“Today we don’t have anywhere to confirm the major cost of sales of all these companies because when they do the valuation sometimes, they do not have verifiable value to do that”, he noted.
Chairman, House Committee on Finance,, Rep. James Faleke, queried if the proposed single window revenue would mean whether Customs, NIMASA, NPA and all the major revenue collectors would be subject to the FIRS or the Service would be collecting revenue on their behalf.
In response, Adedeji said these agencies should rather concentrate on their individual primary mandates and leave the revenue collection to the FIRS.
He said, “This is the way. If you look at the basis of collection like you mentioned, I use NIMASA as example, the basis of collection for NIMASA is 3 percern of FOB. That has nothing to do with Marine. FOB, if you have the single window, you know the total number of vessels coming into the country and going out and the fee is just 3 percent, so what does NIMASA need to do about that.
“What we are saying is that these agencies were set up to do core duties. When you talk about Customs, they are border and trade facilitation. Revenue is not core mandate of Customs. Customs is about border and trade facilitation. So when you have single window, all what you say Customs collects because the real principle of single window is that everything coming to the country is in advance notified, so you know the number of containers coming, the volume, what is there and you know the amount and they pay you once.
“When you do that, the Customs collecting this and that or the NPA collecting also, this would go. When we talk about single that is why they say revenue service. If you go to UK or South Africa, you don’t see Customs Customs collecting revenue. They are merged.
“I am not saying it is bad but it is not the duty of FIRS to be approving payment for roads. I don’t have people who would monitor whether that road is done or not. So my duty is to access, collect and account for all revenue due to Federation. So any other  job may be good and laudable but that is not my core duty. So the same things happens when you see a lot of other agencies collecting revenue. And that is when you see leakages,” he added.
The Chairman commended the initiative to ensure payments are made directly to the contractors and not the MDAs.
He reiterated the commitment of the Committee to ensure that leakages are addressed and revenue increased to make life better for the ordinary Nigerian.
He said, “No one here will doubt your capability, it’s just the political will. Thank God that we have a president who has given you the authority and of course back you with that political will to reform our tax system. What you have to do is to look inward and ensure that you have directors and staffers who will not and negotiate you out.
“We have document to show that we have operators of our revenue collection who also negotiate and say you can pay this, we will do this. That is exactly what we are facing.
“With all the things you have enumerated, only you cannot do the job. You also have to delegate. So what this means is that every one of your staff who are on oath will ensure that they do the right thing.”
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Adeleke demands decentralisation of power

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Osun State Governor, Ademola Adeleke, has called for devolution of power to the states, rather than centralisation of governance powers and responsibilities.

The governor said employing such a strategy to tackle the challenge of inflation ravaging Nigeria’s economy, would yield the expected result.

Adeleke stated this on Sunday at the combined 10th undergraduate and 6th post-graduate convocation of the Adeleke University, Ede, where 1092 students were conferred with first degrees, masters and doctorate degrees, held at the stadium on the campus of the university.

He observed that the government was experimenting with many strategies to tackle the challenge of inflation, noting that there was an urgent need to move many items on the exclusive legislative list to the concurrent list, said the states are better positioned to handle many items for which the centre is presently responsible for.

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“You may also want to note that governments at different levels are working hard to address the parlous state of the economy. At the National Economic Council meetings, both the federal and the state governments regularly brainstorm on finding solutions to the economic hardship, unemployment, and hyperinflation facing the nation. Several options are being experimented on.

“For us as a state, we believe the solution lies in the devolution of powers and financing to the state governments. There is an urgent need to move many items on the exclusive legislative list to the concurrent list. The states are better positioned to handle many items for which the centre is presently responsible.

“So the solution is more devolution rather than more centralisation of governance powers and responsibilities. We must, as a nation, focus on economic federalism. This will deepen subnational prosperity, create an enabling environment for job creation, and boost local capacity across the sectors.

“We must, however, continue to maintain national stability and unity. We can not escape the several issues facing us as a nation unless we harness our potential across the regions. But only when there is peace can we resolve the economic question. We will continue to support President Bola Tinubu as all levels of government grapple with the crisis of the moment,” Adeleke said.

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In his admonition to the graduates, the governor urged them to take the current economic turbulence in the country as an opportunity.

He tasked them to be innovative and enterprising, saying they must tap into the turbulence to build a future of prosperity.

Delivering a commencement speech, Nigerian historian, Prof Toyin Falola, urged the graduating students to face the world without fear and turn challenges into opportunities for excellence.

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Why I rejected senate committee chairmanship -Ndume

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Two days after his removal as the Chief Whip of the Senate, Senator Ali Ndume has said the reason why he declined the chairmanship of the Senate Committee on Tourism, is that he lacks the experience and exposure to lead such a sensitive group.

The Borno South lawmaker said this in his country home in Maiduguri on Friday about 48 hours after he was removed as the Senate Chief Whip, maintaining that he never wanted to be a senate whip after serving as the leader in the eight Senate

The lawmaker said he was given the chance to choose which committee to serve as the vice chairman having successfully led the campaigns that brought about the emergence of Godwill Akpabio as President of the Senate.

“Secondly, the party that recommended to the Senate that I should be removed from being the chief whip of the Senate, I take that as an act of God because if it is God who gave me that position. It is God that took it through APC. So, I bear no grudges about that,” Ndume said.

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“After all, I did not contest to be the chief whip. I did not contest to be the vice chairman of the appropriation committee. I contested to be… one of the Senators of the Federal Republic of Nigeria and God granted me that victory and I’m happy with God, what God has given to me.

“So, I’m not interested in accepting the committee on tourism for the two reasons I told you. I told you I am inexperienced in that. I don’t know anything, I’m not knowledgeable about tourism. So, I would, if any, prefer to remain as an ordinary member so that I can learn about tourism,” the Borno South lawmaker said

Reacting to his criticism of President Bola Tinubu, Ndume said he stood by his word and hoped the President would take appropriate measures to eliminate the suffering of the people.

He said, “I did not say anything wrong. Therefore, I want to state that I stand by all my statements in the interview I granted.

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“So, I know that I’m not wrong. The people are not wrong by speaking the truth and standing by the truth.

“And I pray that the president who by now, I expect the message should have gotten to him, looks at what I have said and takes appropriate measures to eliminate the suffering of the people.”

On the charge to resign from the APC, the senator said he was a founding member of the party.

He also stated that when ex-President Muhammadu Buhari in the company of President Bola Tinubu ordered him to sign a document to join APC at the Imo House in Abuja, he informed his people before going public hence he would consult his people before deciding on whether to leave the APC or not.

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“So, I am not a new member. I didn’t join APC just like that. It was in consultation with my people that I joined APC.” the lawmaker said.

Ndume said he could not speak up immediately after his sack because he was mourning the death of a family member.

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Inferior fuel: FG demands Dangote refinery’s diesel report, orders new test

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The Federal Government, through the Nigerian Midstream and Downstream Petroleum Regulatory Authority, is expecting fresh reports to confirm the real sulphur content of the diesel produced by the Dangote refinery as the company debunked claims of inferior fuel production.

The NMDPRA spokesman, George Ene-Ita, in an interview with The PUNCH on Sunday, said the agency had done its job and would not engage in a media fight with anybody over the claims made by the NMDPRA Chief Executive, Farouk Ahmed, that Dangote’s diesel has more sulphur content than imported one.

According to Ene-Ita, the authority has about 15 engineers and scientists embedded in the Dangote refinery, whose fresh report about the refinery’s sulphur content will be out on Monday (today).

The PUNCH reported Ahmed as alleging that the diesel from the Dangote refinery contains high sulphur content.

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Reacting to Dangote’s allegations that the NMDPRA was giving licences to some traders to import dirty fuel into Nigeria last week, Ahmed argued that it was the Dangote fuel that had a larger content of sulphur.

He also said the refinery, which has been selling diesel and aviation fuel in Nigeria for months, had yet to be licensed, stating that it was still at the pre-commissioning stage.

“The claim by some media houses that there were steps to scuttle the Dangote refinery is not so. The Dangote refinery is still in the pre-commissioning stage. It has not been licensed yet; we haven’t licensed them yet. They are still in the pre-commissioning. I think they have about 45 per cent completion,” Ahmed declared.

The NMDPRA boss warned that Nigeria could not rely heavily on the Dangote refinery for its fuel supply.

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According to him, the refinery had requested the regulator to stop giving import licences to other marketers so as to be the only fuel supplier in Nigeria.

“We cannot rely heavily on one refinery to feed the nation, because Dangote is requesting that we should suspend or stop importation of all petroleum products, especially AGO and direct all marketers to the refinery, that is not good for the nation in terms of energy security. And that is not good for the market, because of monopoly,” he stressed.

Speaking about quality, he said, “So, in terms of quality, currently the AGO quality in terms of sulphur is the lowest as far as the West African requirement of 50 ppm is concerned.

“Dangote refinery and some modular refineries, like Waltersmith refinery and Aradel refinery, they are producing between 650 to 1,200ppm. So, in terms of quality, their product is much more inferior to the imported quality,” he alleged.

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Reacting during a tour of the refinery by members of the House of Representatives led by the Speaker, Hon. Tajudeen Abbas, over the weekend, Dangote asserted that products refined at the world’s largest single train refinery are of superior quality compared to the imported fuel.

The speaker and other members had observed the testing of Automotive Gas Oil from two petrol stations alongside the same taken from the Dangote refinery.

The diesel samples were procured from two well-known filling stations near Eleko junction along the Lekki-Epe Expressway, Lagos, by the lawmakers.

The Chairman of the House Committee on Downstream, Ikeagwunon Ugochinyere, and Chairman of the House Committee on Midstream, Okojie Odianosen, oversaw the collection of samples from the Mild Hydro Cracking unit of the Dangote refinery for testing of all the samples.

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The Dangote laboratory tests were said to have revealed that Dangote’s diesel had a sulphur content of 87.6 ppm while the other two samples showed sulphur levels exceeding 1,800 ppm and 2,000 ppm respectively.

Dangote faults NMDPRA
Speaking, Dangote emphasised that the findings had debunked claims made by Ahmed that imported diesel surpasses domestically refined products.

The Africa’s richest man openly challenged the regulator to compare the quality of refined products from his refinery with those imported, advocating for an impartial assessment to determine what best serves the interests of Nigerians.

“We produce the best diesel in Nigeria. It is disheartening that instead of safeguarding the market, the regulator is undermining it. Our doors are open for the regulator to conduct tests on our products anytime; transparency is paramount to us. It would be beneficial for the regulator to showcase its laboratory to the world so Nigerians can compare. Our interest is Nigeria first because if Nigeria doesn’t grow, we have limited capacity for growth.

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Dangote argued that the imported products being encouraged by Ahmed have failed in tests, saying most of the importers have fake certificates because the owners of the laboratories have been told what to write.

On the allegation of monopoly, Dangote said, “If you are saying how can Dangote alone supply the market, are you saying the N4bn that the NNPC spent now on the activation of their refineries in Kaduna, Warri and Port Harcourt is down the drain? Are the refineries not going to work? They have announced a date. If they are there, we cannot be a monopoly because we are not the only one; actually, they are more powerful than us. So, there is no way we can be a monopoly, it is not done.”

Speaking about the sulphur content, he added, “I am surprised for somebody to come and mention that we have a bad quality; we and other modular refineries. I can’t talk of the quality of the modular refineries, but our own today is 87ppm and by Monday, we will be at 50ppm, by the beginning of August, we will be at 10ppm.

“All the test certificates people are busy flaunting around today are fake. Where are the laboratories? We have the laboratory.

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“The demarketing of a company by a regulator that he is supposed to protect is very very unfortunate. We produce the best diesel in Nigeria and if the regulator wants, he can come any time to conduct a test. I would like the media to show our lab and I would like the regulator himself to show us which lab is he using. As a regulator, he is supposed to have a lab. If the regulator doesn’t have a lab, then we have an issue because he cannot rely on somebody. He is supposed to check us.”

However, while commenting on the claim that the Dangote’s diesel has 87ppm sulphur content, the NMDPRA spokesman posited that a lot might have changed within a space of five days.

“We are not fighting anybody. Dangote refinery is the same as an indigenous local refinery. We are regulators, we don’t fight in the media. We have done our job, and that is it.

“You know we are dealing with engineering and time, and when we deal with engineering and time, it means that whatever claims put forward can be put to test and verified or debunked. If you recall, the ACE made that pronouncement on the sideline of an interaction on Wednesday or so. Between that time and now, it’s been like five days, a lot can change. So, 650ppm or 500 can come down to whatever.

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“What I am saying is that I can’t give you any verifiable result for now, being a Sunday evening, until perhaps tomorrow when we will be in a position to review our technical report that must have been submitted by our engineers who are embedded in that plant. What normally comes to us are weekly reports. These particular tasks are done across the week from Monday to Sunday; even now, operations are going on and our engineers are there. So, I can’t speak to the claims made by that refinery now,” Ene-Ita explained.

On the insinuation that ACE may be relying on a report from other laboratories to describe his fuel as inferior, he replied, “Of course we have laboratories all over the country. Does Dangote work in NMDPRA? He doesn’t work in NMDPRA.”

The NMDPRA official fumed over the allegation that the regulator was demarketing a company it should protect, wondering if Dangote wants the agency to bend the rules in his favour.

“Why should we protect any company? We are regulators, operations are going don’t protect anybody; we regulate operators. If he says protect, it means we are shielding. It means that we should bend the rules. We don’t do that, we regulate every company.

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“And we don’t demarket, what does he mean? You only demarket your competitors to gain an advantage. We are not competing with an operator. The word, ‘demarketing’, is only used when two competing brands are fighting. We are not an operator; we are a regulator. How can we demarket? Please, I take exception to that, on behalf of my organisation. We are not demarketing anybody. We are regulating every local refinery, including NNPC,” he clarified.

When told perhaps the business mogul means the regulator should be boosting local refining capacity, he retorted, “That’s what we are doing. As we speak, there are over 15 engineers and scientists of the NMDPRA working with them for the last how many months. That’s how we get our reports. We have engineers and scientists there, who go there. That’s how we get them. That is why I keep on saying we don’t want to personalise this matter. We are working to see that the local refining capacity is booted to a point where we are self-sufficient in producing our fuel here.”

Dangote imports crude
Meanwhile, the Dangote refinery is in talks with Libya to secure crude for the 650,000 barrels per day plant and will also seek Angolan oil, a senior executive, Devakumar Edwin, told Reuters, as the refinery seeks to overcome problems with domestic crude supplies.

Since Dangote began operations in January, it has been unable to get adequate crude supplies in Nigeria, which, although Africa’s biggest oil producer, is struggling with theft, pipeline vandalism and low investment.

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Dangote has resorted to importing crude from as far as Brazil and the United States.

“We are talking to Libya about importing crude,” Edwin told Reuters late on Saturday. “We will talk to Angola as well and some other countries in Africa.”

He declined to give details about the talks but said international traders and oil companies were among the biggest buyers of Dangote’s gasoil, much of which was being exported.

“The biggest off-takers are the two big traders Trafigura and Vitol and BP and, to some extent, even TotalEnergies. But all of them are saying they are taking it to offshore,” Edwin said.

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Traders and shipping data have shown that Dangote is increasing gasoil exports to West Africa, taking market share from European refiners.

Dangote has said the refinery will begin the sale of Premium Motor Spirit in August, with a plan to stop the importation of refined fuel into Nigeria.

Marketers worried
However, Nigerians and marketers have been expressing concern over the ongoing controversies, especially after the regulator said the country would continue to import refined petroleum products into Nigeria.

The PUNCH recalls that while accusing the IOCs of plans to frustrate the refinery, the Vice President of Oil and Gas at Dangote Industries Limited, Edwin also accused the NMDPRA of granting licences indiscriminately to marketers to import dirty refined products into the country.

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According to Edwin, the Federal Government issued 25 licences for the construction of refineries in Nigeria, but only the Dangote Group delivered on its promise.

The vice president noted that more than 3.5 billion litres of diesel and aviation fuel had been exported to Europe by the refinery in the past few months. The exported fuel, it was said, represented about 90 per cent of its production.

“The Federal Government issued 25 licences to build refineries and we are the only one that delivered on our promise. In effect, we deserve every support from the government. It is good to note that from the start of production, more than 3.5 billion litres, which represents 90 per cent of our production, have been exported. We are calling on the Federal Government and regulators to give us the necessary support to create jobs and prosperity for the nation,” Edwin stated.

It was alleged that even though Dangote was producing and bringing diesel into the market, complying with the regulations of the Economic Community of West African States, “licences are being issued, in large quantities, to traders who are buying the extremely high sulphur diesel from Russia and dumping it in the Nigerian market.”

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Edwin lamented, “The decision of the Nigerian Midstream and Downstream Petroleum Regulatory Authority in granting licenses indiscriminately for the importation of dirty diesel and aviation fuel has made the Dangote refinery expand into foreign markets. The refinery has recently exported diesel and aviation fuel to Europe and other parts of the world. The same industry players fought us for crashing the price of diesel and aviation fuel, but our aim, as I have said earlier, is to grow our economy.”

He noted that because the refinery meets the international standard as well as complies with stringent guidelines and regulations to protect the local environment, it has been able to export its products to Europe and other parts of the world.

“It is regrettable that in Nigeria, import licences are granted despite knowing that we can produce nearly double the amount of products needed in Nigeria and even export the surplus. Since January 2021, ECOWAS regulations have prohibited the import of highly contaminated diesel into the region,” Edwin stated.

Meanwhile, some Nigerians online have called on President Bola Tinubu to relieve the NMDPRA chief executive of his job for saying the fuels produced by local refineries are inferior to imported ones.

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Also, the House of Representatives said the allegations would be investigated.

Credit: PUNCH

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