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55,000 tax defaulters in Nigeria

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The Federal Inland Revenue Service (FIRS) has disclosed that it recently discovered not less than 55,000 tax defaulters from the bank accounts substitution initiative that it embarked upon earlier this year.

The Chairman of the Service, Babatunde Fowler, made the disclosure at a stakeholders’ forum and the official presentation of the ‘Nigerian Tax Outlook 2019,’ that took place in Lagos.
Fowler, while highlighting the achievements of the service, especially as its recorded N5.3 trillion revenue in 2018, the highest in the history of Nigeria, he stated that the feat was made possible by the various innovations and initiatives introduced by the FIRS.

“We had the tax amnesty in 2016 and we were able to generate N96 billion from people who had not declared or paid their taxes, there is also the VAID, which equally threw up a declaration of N92 billion, we also organized the stakeholders meeting requesting all to come forward, register and pay their taxes.

“At the meeting, we were able to identify over 3,700 companies that have banking turnover of one billion and above annually for three years, with no tax ID and payments.

“We went further to the banking sector earlier this year to find businesses and operators of bank accounts with an N100 million turnover, but no tax identity.

“Surprisingly, we were able to discover 55,000 non-compliance and non-tax payers among us,” he divulged.

The FIRs boss also made some clarifications on the purpose of Value Added Tax (VAT), which he said had generated controversies recently.

“VAT simply means consumption tax. A lot of people have been saying VAT is a hardship on the poor but I say that it is a support to them.

“An increase in VAT would definitely translate to a better life to the vulnerable in the society including the poor, needy and less privileged. If you don’t have money to consume, VAT is not your problem, you first of all need to have the ability and disposable income to spend, before you can be charged VAT.”

Continuing, he said: “It is a source of revenue to the state governments, 85 percent of the revenue collected from VAT is shared among the state governments, who are supposed to directly impact my life and yours.

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431 Nigerian companies indebted to AMCON

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Sixty-Two debtors are owing to the Asset Management Corporation of Nigeria (AMCON) N10 billion and above each, the agency has said.

The corporation was established on July 19, 2010, when AMCON Act was signed into law by former President Goodluck Jonathan, with a mandate to acquire bad loans from banks, pay the banks and recover the loans from the debtors.

But eight years into its operation, the corporation is being owed N10 billion and above by each of the 62 high-profile debtors. The debt represents 40 percent of the 12,537 obligors.

AMCON said that 431 debtors, representing 37 percent of the debtors, owe between N1 billion and N10 billion; 1,998 debtors, constituting 16 percent of the total obligors, owe between N100 million and N1 billion while 10,046 debtors, representing seven percent of the total obligors owe between N100 million and below bringing the total number of bad loans under AMCON management to 12,537.
AMCON was created to be a key stabilizing and re-vitalizing tool aimed at reviving the financial system by efficiently resolving the non-performing loan assets of the banks in the economy.
The corporation has in the last eight years of operation, bought Non-Performing Loans (NPLs) worth N5.4 trillion from banks.

There is N3.8 trillion AMCON Bond held sorely by the Central Bank of Nigeria (CBN) and this is expected to mature by 2023.

AMCON’s Managing Director Ahmed Kuru announced that the corporation has so far recovered N1 trillion from the bad debtors, and the agency was doing everything within the ambit of the law to recover the remaining debts.

But recovering the remaining debts from billionaire debtors, who are taking strategic steps to ensure they do not payback will remain an uphill task, and perhaps impossible.

Financial pundits insist that since it took AMCON eight years to recover N1 trillion out of the N5.4 trillion bad debts, it is doubtful if it could recover the substantial amount by 2023, which is its sunset timeline. The N1 trillion recovery represents a meager 18.51 percent of the total debt portfolio.

Speaking on AMCON operations and results achieved so far, a Board Member at Standard Bank Group, South Africa, Atedo Peterside, said that one-third of the money that the Federal Government squandered on AMCON can resolve most of Nigeria’s social and economic problems including fixing the power sector.

Peterside who did not elaborate further on AMCON’s operation, spoke during ‘A Consultative Roundtable with The Central Bank of Nigeria Governor’ tagged: ‘Going for Growth’ held in Lagos.

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Nigeria lost N44.6bn as a result of the drop in oil revenue

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Nigeria lost N44.6bn as a result of the drop in oil revenue occasioned by the shut-ins and shutdowns of some terminals by the Nigerian National Petroleum Corporation in April 2019, latest data obtained from the Central Bank of Nigeria revealed.

The CBN said the country’s oil earnings fell from the N516.88bn recorded in March to N472.28bn in April, adding that this also affected the gross federally-collected revenue for the month.

Although oil receipts accounted for 59.4 per cent of total revenue which the country made in April this year, data from the bank showed that earnings from oil dropped by 8.6 per cent when compared to the previous month’s receipts.

Also, earnings from the sector were 26.2 per cent lower than the provisional monthly budget estimate, as the apex bank explained that the shutdown and shut-ins of terminals were due to leakages, technical issues and maintenance.

The bank stated, “Oil receipts, at N472.38bn or 59.4 per cent of total revenue, was below both the provisional monthly budget estimate and the preceding month’s receipt of N516.88bn by 26.2 per cent and 8.6 per cent, respectively.

“The fall in oil revenue relative to the provisional monthly budget estimate was attributed to the shut-ins and shut-downs at some NNPC terminals due to technical issues, leakages and maintenance.”

Similarly, the CBN noted that at N322.93bn or 40.6 per cent of total revenue, non-oil revenue was below the provisional monthly budget estimate of N466.91bn by 30.8 per cent, but exceeded the preceding month’s receipt of N251.01bn by 28.7 per cent.

It said the lower collection relative to the provisional monthly budget estimate was due to the shortfalls in corporate tax, value added tax, Federal Government independent revenue and education tax.

On operations of the Federation Account, the bank stated that at N795.31bn, the estimated federally-collected revenue (gross) in April 2019 fell below the provisional monthly budget estimates of N1.11tn by 28.2 per cent.

“However, it exceeded the receipt of N767.90bn in the preceding month by 3.6 per cent. The decrease, relative to the provisional monthly budget estimate, was attributed to a shortfall in both oil and non-oil revenue,” it added.

It further stated that of the total N616.21bn retained revenue in the Federation Account, the sums of N88.49bn, N67.82bn and N24.72bn were transferred to the VAT Pool Account, the Federal Government Independent revenue and ‘others’, respectively, leaving a balance of N435.18bn for distribution to the three tiers of government.

Of this amount, the Federal Government received N208.39bn, while the state and local governments got N105.70bn and N81.49bn, respectively.

The balance of N39.59bn was shared among the oil producing states as 13 per cent Derivation Fund.

Similarly, from the N88.49bn transferred to the VAT Pool Account, the Federal Government received N13.27bn, while the state and local governments received N44.25bn and N30.97bn, respectively.

“Also, the sum of N78.09bn was shared as excess oil revenue,” the CBN stated.

It explained that the federal, state and local governments received N35.79bn, N18.15bn and N13.99bn, respectively, while the 13 per cent Derivation Fund received N10.15bn

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Sec suspends Oando AGM indefinitely

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The Securities and Exchange Commission (SEC) has suspended till further notice the Annual General Meeting (AGM) of Oando Plc scheduled to hold Tuesday. The Commission made this known on Monday in a statement duly signed by its management in Abuja.

Embattled Oando CEO, Wale Tinubu

According to the statement: “The Securities & Exchange Commission (‘the Commission’) hereby notifies the public that further to the Ex-parte Order of the Federal High Court, Ikoyi Lagos in SUIT NO: FHC/L/CS/910/19 IN MR. JUBRIL ADEWALE TINUBU & ANOR V SECURITIES & EXCHANGE COMMISSION & ANOR, the Annual General Meeting of Oando Plc (a company listed on the Nigerian and Johannesburg Stock Exchanges) scheduled to hold at the Zinnia Hall, Eko Hotels and Suites, Plot 1415, Adetokunbo Ademola Street, Victoria Island, Lagos on Tuesday, June 11, 2019 at 10: 00 am has been suspended till further notice.
“Accordingly, the Commission has directed the suspension of the Annual General Meeting of Oando Plc to allow the parties to maintain the status quo.

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FG revokes six oil licenses

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The federal government, through the Department of Petroleum Resources (DPR), yesterday announced the revocation of six oil block licences granted to five companies.
the DPR, under the Ministry of Petroleum Resources, had earlier requested the federal government to revoke the licences, which has finally been approved.

One of the licences is an Oil Prospecting Licence (OPL), belonging to Summit Oil, founded by the winner of the June 12, 1993, presidential election, the late Chief Moshood Abiola, where hydrocarbon is being explored. Five others are Oil Mining Leases (OMLs).

According to a notice issued yesterday to the industry operators by the apex regulator of the oil and gas industry, the revocation was based on a presidential directive to “recover legacy debts” owed by the companies operating the leases.

The five companies are Pan Ocean Oil Corporation (OML 98); Allied Energy Resources Nigeria, (OML 120 and 121); Express Petroleum and Gas Company (OML 108); Cavendish Petroleum Nigeria (OML 110) and Summit Oil International (OPL 206).

The DPR said it revoked the licences “in furtherance of the presidential directive on the recovery of legacy debts owed the federation and in line with the provisions of the Petroleum Act Cap P10 Laws of the Federation of Nigeria.”

Some of the officials of the affected companies told THISDAY on condition of anonymity that they would challenge the revocation.

“Negotiations have been ongoing on these issues for the parties to reconcile the payments but the government’s side was not sincere. They had predetermined motive to cancel the licences and re-award them to other companies. On our part, we will seek redress in the court,” said an official of one of the companies.

“Our assets have been subject of litigation and the government should have waited for the court cases between the partners to be resolved before the revocation. This matter will definitely be resolved in the court,” he added.

In revoking the leases, the apex regulator accused the affected companies of “non-compliance with statutory obligations.”

OML 98, which started production in 1976, is located in the Northern Delta, precisely in what is known in geological parlance as Depobelt, and in the northern fringe of Niger Delta Basin.

The acreage covers an area of 523 square kilometres in Edo and Delta States, with many fields – Ogharefe, Ologbo, Asaboro, Adolo, Owe, Ossiomo, Ona and Erimwindu.
The only OPL affected is owned by the late Abiola’s Summit Oil.

OMLs 120 and 121 have been a subject of litigation between Allied Energy Resources Limited, CAMAC Energy – both Nigerian companies, and Nigerian Agip Exploration Limited (NAE), a subsidiary of the Italian oil giant.

The dispute between the NAE, Allied Energy and Camac allegedly arose from the decision of the arbitration award of the London Court of International Arbitration (LCIA), which NAE had wanted to enforce.

The arbitration award was over a dispute regarding a Sale and Purchase Agreement (SPA) concluded in June 2012 between NAE as seller and Allied Energy as the purchaser, in which NAE was said to have transferred to Allied Energy Plc the entirety of NAE’s interests and rights in the two leases.

NAE had argued that the payment of part of the price for the transferred interests and rights was deferred to be paid by Allied Energy to NAE.

The company alleged that following the non-payment by Allied Energy, it filed the arbitration at the London Court of International Arbitration in accordance with the arbitration terms provided in the SPA, and the arbitration was concluded on February 14, 2017.

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