Unreturned Oil Money of N1.2tr Raises New Concerns Over FG Tax Agencies | The Guardian Nigeria News

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NASS, FRC, NEITI, Stakeholders Denounce Gaps, Continued Borrowing
Stakeholders in Abuja yesterday expressed serious concerns over shortcomings in revenue collection and disbursements to government accounts by federal government agencies, a development that may have generated more than $1.3 billion (540 billion naira) and an additional 670 billion naira of unpaid oil and gas revenue. sector alone.

The failures of government agencies, the lack of control and the undue advantages granted to certain companies operating in the country, in particular in the free zones, also worried the experts gathered during the Growth Initiatives for Tax Transparency (GIFT) organized by OrderPaper Advocacy Initiative.

The Public Accounts Committee (PAC) of the House of Representatives, represented at the event by its Chairman, Busayo Oluwole Oke, has revealed that the Nigerian National Petroleum Company (NNPC) Limited has questions to answer on oil and gas revenues which amounted to $2.3 billion.

According to him, the funds were not disbursed between 2014 and 2019 and included late payments by customers without proof of any surcharge for late payments to the tune of $510,020,921.79; incomplete payments by customers totaling $6,203,863.68 and another overdue payment by customers totaling $80,452,746.83.

The PAC chairman, pointing to documents verified by the country, noted that $235,685,861.31 had been transferred to an undisclosed escrow account – due to gas sales to NLNG, adding that there was a shortfall. unexplained gain on NLNG balances amounting to $18,389,334.23 and payment for gas exports of $346,211,227.59 through the NGL funding account instead of the Federation account.

According to him, there were also $2,664,047.64 in unexplained and unfounded foreign exchange losses on monies paid into the Federation’s account while sales without a payment statement, payment details or confirmation of payment from the company National Oil Company amounted to $9,389,105.80.

The discrepancies in the billing price per unit used in the billing and the amount indicated in the sales invoice amounted to $11,973,828.48 and the discrepancies on the amount transferred to the Federation’s account during the period of five years amounted to 663.8 billion naira, Oke noted, adding that many companies are benefiting from undue tax exemptions as the country’s lax regulation and supervision allow breaches in the face of borrowing.

He noted that there was no production of comprehensive information on crude oil allocation to refineries in 2019; failure to pay all revenue to the Federation account while products pumped from refineries without proof of receipt at the depot amounted to N7 billion.

“To date, Saudi-Aramco is the largest company on the planet by revenue with approximately $2.332 billion, ahead of Apple, Tesla, Alphabet, Microsoft and Amazon. Tech companies have dominated this space for a long time and we haven’t seen any oil and gas companies make the top 10 list.

“Nigeria as a country has similar potential as Saudi Arabia, however, in 2022 Nigeria’s GDP per capita is $5,000 while Saudi Arabia’s is $24,224. The media has been reporting since the first quarter of 2022 that the NNPC was failing in its ability to make payments to the Federation account, despite the current rise in the price of crude oil.

Funded by the US government, the GIFT program aims to catalyze reforms around transparency, accountability, and good governance (TAGG) as it relates to the country’s extractive sector.

Oke lamented that most government entities and companies are not prepared to submit to the scrutiny of relevant public sector accounting authorities like the Office of the Auditor General of the Federation and even the National Assembly.

According to him, agencies have repeatedly avoided invitations from National Assembly committees or used excuses to avoid attending public hearings.

Fiscal Responsibility Commission (FRC) Executive Chairman Victor Muruako, who also spoke at the event, said the operating surplus payout has added great value to governance through independent revenue generation for the government, noting that the commission caused over 1.7 trillion naira to be remitted to the FG Treasury, despite all the loopholes in the Act.

The executive secretary of the Nigerian Extractive Industries Transparency Initiative (NEITI), Dr. Orji Ogbonnaya, recalled that the agency had sounded the alarm that companies in the oil and gas sector owed the government over N2. 6 trillion in unpaid taxes and other levies in 2019, highlighting the need to close the remittance gap.

He said there was a need to help the government generate the necessary revenue from the extractive sector that would be deployed to provide and upgrade existing infrastructure for citizens.

“Allow me to take this opportunity to report to you that the completion of the NEITI 2020 Industry Reports for the Oil, Gas and Solid Minerals sector, as well as the Tax Allocation and Statutory Disbursements (FASD) have The project has been approved by the NEITI National Stakeholder Working Group (NSWG) and is beginning with a national data collection, site visit and mapping process.

“These activities are all aimed at deepening the reach of our reports. We hope that this project will be concluded before the end of the year. NEITI has also fully automated its data collection process, which will be rolled out for the conduct of the 2021 audit.

“Since we are using automation technology for the first time, NEITI will deploy it alongside the manual data collection technique we have used in the past to ensure there are no gaps or issues. during the conduct of the exercise. This will facilitate Nigeria’s preparation for the global validation of the Extractive Industries Transparency Initiative (EITI) early next year, where we would be assessed on the country’s compliance with the EITI standard,” he said.

For the executive director of OrderPaper Advocacy Initiative (OAI), Oke Epia, it is not pleasant to read the warning of the International Monetary Fund (IMF) according to which Nigeria could spend 100% of its income on servicing the debt.

According to him, such a prospect signals the grim reality that Nigeria’s rich natural resource endowments have brought little or no benefit to its citizens. He said there was a need to amend the Fiscal Responsibility Act (2007).

For Epia, while the FRA, which came into existence on July 30, 2007, was a bold move by the government of the time to inculcate budgetary discipline and prudence in the management of public finances, unfortunately there are gaps in the regulations which have been exploited for a long time over a decade by state agents to undermine the noble intentions of the law.

“These shortcomings include the lack of sanctions and insufficient funding, which presented clear obstacles to the implementation of the operating surplus measure. Available records show that the Commission has paid out more than 1.7 trillion naira to the treasury since it came into force despite the shortcomings of the law. It is not hard to imagine how much more the government could have benefited from an independent and empowered FRC,” he said .

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