Road Infrastructure Tax Credit Scheme, One of FG’s Greatest Innovations-Nami
The Road Infrastructure Tax Credit Scheme has been described by the Executive Chairman of the Federal Inland Revenue Service (FIRS), Muhammad Nami as one of the greatest innovations of the Federal government in its resolve to tackle Nigeria’s infrastructure deficit.
The scheme which provides for public-private partnership intervention in the construction, refurbishment and maintenance of critical road infrastructure in the country with participants being entitled to Tax Credits against their future Companies Income Tax was the subject of debate at the Senate Stakeholder and Public Hearing on the 2023 Medium-Term Expenditure Framework (MTEF) and Fiscal Paper, which held yesterday at the Senate Chambers.
“I think one of the greatest innovations of the government of the day is the Executive Order 007, which was signed into law in 2019,” Mr. Nami said. “I want to speak to the one we are handling jointly with the NNPC. The NNPC through its subsidiary for instance is investing in about 1,824 kilometres of roads across the 6 geopolitical zones in Nigeria.
“Some of these roads had been constructed as far back as 1976. I could remember when I was still rounding up my primary school education, the road that leads Suleja to Lapai-Agaie-Bida was constructed by a company called DTV. I am not aware of any significant work done on that road 40 years later, only until now when the NNPC is using Executive Order 007 to reconstruct the road.
“I can report authoritatively to the Chairman and members of this committee that from December 2021 to July this year, the contractor has completed the reconstruction of well over 50 percent of that road.
“The challenge of road construction in Nigeria has always been funding. Yes, there are contracts for the construction of roads, but funding these constructions is the challenge.
“The road leading from Suleja to Minna for instance was awarded some 11 years ago to a company for over N20 billion. Ironically, annual budgetary provision in our National Budget every year stands between N150 million to N200 million per annum. If we are to complete that road, going by the annual budgetary provisions it would take an average of 35 to 40 years before we finish it.
“I can confirm to the Chairman that with Executive Order 007, NNPC is now providing funds and in the next two to three years that road will be completed. This is an important innovation of the government and I would plead with this distinguished Committee of the National Assembly to support the government on it,” Mr. Nami noted.
Supporting the position of the FIRS Executive Chairman, the Minister of Finance, Budget and National Planning, Hajia Zainab Shamsuna Ahmed explained further that the tax credit was only provided to the beneficiaries after completion of the construction work, and not before.
She noted that several companies had indicated interest in carrying out construction and rehabilitation of roads under the scheme across the country, adding that while some of these companies had commenced work, others were yet to as they were still finalising on some of the documentation requirements such as Bill of Quantities.
On the issue of revenue challenges being faced by the country, Mr. Muhammad Nami noted that a major cause of tax revenue loses for the country is the issue of having “fragmented tax systems and agencies.”
“In Nigeria we have 774 Local Governments, each of them have a tax authority; each of the 36 States, too, have revenue authorities with their respective mandates; then we have the FIRS and Customs. What I would advise for efficiency and to do things in line with global best practices, is that we should amend our tax laws to harmonise the tax agencies and tax system.
“With this, when the FIRS, for instance visits ‘Company A,’ it can serve one assessment on the company, and also on the individual that owns the Company; it can also ask the company to account for the VAT it has collected, and ask for PAYE it has deducted from its employees as well as the Personal Income Tax of the Promoters of the Company.
“This is currently not the case, and as such has created a huge gap in our tax system.”
The Senate Finance Committee, led by Senator Solomon Adeola charged the Federal Government through the Ministry of Finance and members of the government’s economic team to explore novel strategies that would shore up revenue for the Federal Government, including restructuring the remitting formula for Government Owned Enterprises (GOEs).
The Committee urged the Federal Government to consider a situation where Government Owned Enterprises (GOEs) remit 100% of their revenue to the government, while being funded by a determined percentage of Cost of Collection as is the case with the FIRS and Customs.
Arguing for this, the Committee opposed the current situation where some government agencies were retaining hundred percent of their revenue, spending from it, and paying government operating surplus.
The Committee recommended that these GOEs should keep only 5 to 15 percent as their cost of collection from the revenue generated to cater for their salaries, operational expenses and capital expenditure as is currently done by the Nigerian Customs and FIRS, while remitting the difference of 85 to 95 percent of their gross earnings as against the current practice of operating surplus where they spend between 70 and 90 percent of their gross earnings.
The Committee noted that this also has the capacity to make them put in more effort to improve their revenue when compared to the FIRS and Customs.
The Committee further urged the Federal Government to apply the same logic to the running of government owned universities by providing funding for only research and infrastructure needs through the Education Tax already being administered by the FIRS, while allowing the Vice Chancellors to use the revenue from school fees and other innovative revenue sources to run the Universities.
FG Approves N24.2bn For Free Internet At Airports, Schools, Markets
THE Federal Government has approved free internet services worth N24.2 billion naira at 20 selected airports, 43 universities and six markets across the country.
The Minister of Communications and Digital Economy Isa Pantami, disclosed this after the Federal Executive Council (FEC) meeting chaired by President Muhammadu Buhari yesterday
Pantami said that the airports were selected from the six geo-political zones.
“Certain intervention projects are going to be implemented by the Federal Government of Nigeria through the Nigerian Communications Commission of providing Internet in 20 selected airports in Nigeria and higher institutions of learning and also some markets to support micro small and medium enterprises.
“In each geopolitical zone, you have around three airports. In the South-West, we have Lagos and Ondo. For the South-East, we have Anambra and Enugu.
“For the South-South, we have Port Harcourt and Akwa Ibom. For the North-Central we have Abuja and Ilorin. In the North-West, we have Kano, Sokoto and Kebbi. For the North-East we have Yola, Maiduguri and Gombe.”
The minister said the markets and 43 institutions which include universities and polytechnics were also drawn from the six geopolitical zones, adding that it will ease e-learning in schools and also enhance the transition to a cashless economy.
Group urges NASS against budget padding
BudgiT Foundation Nigeria, a Non-Governmental Organisation (NGO) says it is pertinent for the National Assembly to guard against padding of the 2023 budget in view of current economic reality.
Mr Gabriel Okeowo, the Country Director of the foundation, said this in a telephone interview with NAN on Tuesday, in Abuja.
He said increasing the size of the 2023 budget proposal above the N20.5 trillion presented by President Muhammadu Buhari would weigh so much on the economy.
According to him, the economy is already battling inflation, high interest rate among other economic challenges and should not be further burdened with a budget that will prompt more borrowing.
“The National Assembly should make sure that they streamline the 2023 budget proposal to make it as implementable as possible.
“From what we have seen over the years, no matter the size of the budget proposal presented to the national assembly, when it is coming out, there would be insertions that would blow it up.
“For instance, the President while assenting to the 2022 budget, said the National Assembly inserted several new projects.
“So, we have to start now to let the lawmakers know we are following up on the ongoing budget defence by Ministries, Departments and Agencies (MDAs),” he said.
He said the legislature should be able to stand its ground to ensure that it cuts down on frivolous items presented by MDAs.
He said if it would be difficult to reduce borrowing to fund the budget, the National Assembly should then be stringent on items that would form it.
He, however, said if the National Assembly refused to take to advice to streamline the budget proposal, the executive should reject it.
“On the side of the executive, it also needs to sit up because democracy is a system that checkmates itself.
“If the National Assembly ends up not doing what it is supposed to do, the Executive should be able to stand its grounds to return the budget for amendment.
“We should not for the sake of wanting to sign the budget into law by December, to keep to January-December Calender, mess up the credibility of the budget itself,” he said.
VIN reduces false information on imported vehicles – Customs says
The Nigeria Customs Service (NCS) says the Vehicle Identification Number (VIN) valuation system has recorded huge success since its introduction.
The Deputy Comptroller Timi Bomodi, National Public Relations Officer of the service, said this in an interview with NAN in Abuja on Tuesday.
Bomodi said the system had been able to drastically reduce false information on imported vehicles.
He said, “the VIN valuation has been successful because it is no longer easy to play around with information.
“Before the introduction of the system, it was easy for people to manipulate the process because they were making manual declaration about vehicles.
“For instance, if they were bringing in 2020 model of vehicles, they might be able to manoeuvre and say they were bringing in 2010 model because they knew they would pay less’’.
He said with the system currently in place, every information about a vehicle gets revealed once entered into the system.
The customs spokesperson said the process had made it possible for the service to get appropriate duties for imported vehicles.
On whether the value fixed for vehicles was fair enough to allow for ease of doing business, Bomodi said necessary steps were followed before arriving at the current value.
He said customs arrived at a fair value for different models of vehicles after due consultation with import brokers and other stakeholders.
NAN reports that the VIN valuation policy was introduced in February for allocation of automated standard values to all vehicles being imported.
The VIN valuation system determines the value of import duty payable on a vehicle as soon as the vehicle goes through a dedicated scanning machine.
The automated scanning system was introduced to check corrupt practices and ensure trade facilitation among others.
News1 week ago
Ramadan : Church Donates Food, Cash To Muslims
News3 days ago
Of Araraume’s Conundrums And Staying Power
News2 days ago
Ayu Is An Evil That Befell PDP…….. Sen Nnamani
News6 days ago
Breaking: It’s Victory For Ademola At Appeal Court
News1 week ago
Ramadan: Prince Agba Greets Muslim Faithful, Sues For Peace, Religious Tolerance
News3 days ago
Shaibu Mourns Oladipo Diya
….recounts their meeting in detention camp.
News1 week ago
Edo State HoA Election Results : Angry Protesters Storm INEC Office in Benin*
News6 days ago
Just In:CBN Confirms Evacuation of Banknotes to Commercial Banks Nationwide