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Nami: Road Infrastructure Tax Credit Scheme, one of the greatest innovations of FG

Published

2 years ago

September 15, 2022

NewsDirect

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 per cent 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 per cent 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 per cent of their revenue, spending from it, and paying government operating surplus.

The Committee recommended that these GOEs should keep only 5 to 15 per cent 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 per cent of their gross earnings as against the current practice of operating surplus where they spend between 70 and 90 per cent 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.

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FG set to sell DisCos to reputable operators in three months — Adelabu

Published

27 mins ago

April 26, 2024

NewsDirect

The Minister of Power, Chief Adebayo Adelabu, has said that the federal government would sell off the five electricity Distribution Companies (DisCos) now under the management of banks and Asset Management Company (AMCON) in the next three months to reputable technical power operators.

Adelabu disclosed this to the members of the Senate Committee on Power who were on an oversight visit to the ministry in Abuja.

The Minister added that the energy distribution assets are technical and as such, they should be under the management of technical experts.

As it stands, Abuja Electricity Distribution Company (AEDC) is currently under the management of the United Bank of Africa (UBA), Fidelity Bank manages Benin Electricity Distribution Company, Kaduna Electricity Distribution Company, and Kano Electricity Distribution Company while Ibadan Electricity Distribution Company is under the AMCON management.

They all found themselves under the new management arrangement owing to their inability to repay their loans.

He informed the committee that tough decisions on the DisCos have become necessary because the entire Nigerian Electricity Supply Industry (NESI) fails when they refuse to perform.

According to him, the ministry will prevail on the Nigerian Nigerian Electricity Regulatory Commission (NERC) to revoke underperforming licenses and also change the management board of the DisCos if it becomes the solution.

Adelabu said, “Lastly, on distribution. Very soon you will see that tough decisions will be taken on the DisCos. They are the last lap of the sector. If they don’t perform, the entire sector is not performing.

“The entire ministry is not performing. We have put pressure on NERC, which is their regulator to make sure they raise the bar on regulation activities.

“If they have to withdraw licenses for non-performance, why not? If they have to change the board of management, why not?

“And all the DisCos that are still under AMCON and Banks, within the next three months, they must be sold to technical power operators with good reputations in utility management.

“We can no longer afford AMCON to run our DisCos. We can no longer afford the banks to run our DisCos. This is a technical industry and it must be run by technical experts.”

The Minister also noted that it has become necessary to reorganise the DisCos for efficiency.

He stressed that Ibadan DisCo is too large for one company to manage.

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Five arrested for attacking, injuring four LASTMA officers

Published

28 mins ago

April 26, 2024

NewsDirect

…Operational vehicles damaged

…54 trucks impounded for illegal parking

Five miscreants have been arrested for assaulting and injuring LASTMA personnel during an enforcement operation in the Oba Akran Avenue area of Ikeja, Lagos and the state government has finalised preparations to prosecute them

Firector of Public Affairs and Enlightenment of LASTMA, Mr. Adebayo Taofiq, disclosed this in a press statement made available to journalists on Thursday.

According to him, April 23, LASTMA operatives conducted an operation to remove illegally parked Viju Milk trucks on Oba Akran Avenue in response to numerous complaints from the public about the trucks causing traffic congestion.

During the operation, four LASTMA officers sustained serious injuries from weapons wielded by Viju Milk truck drivers and local miscreants.

“While LASTMA operational vehicles were vandalised, 54 Viju Milk truck were evacuated by LASTMA during the enforcement operations.”

He said, “The police, working alongside LASTMA, arrested five of these individuals namely: Falomo Oluwafemi, Afeniyi Stephen, Olamide Adekunle, Chukwu Guaja Eze and Adeshina Sulaimon, seized various weapons including broken bottles, iron rods, charms, knives, and cutlasses.”

The injured LASTMA officers were promptly taken to the hospital for medical attention.

Hon. Sola Giwa, the Special Adviser to the Governor on Transportation, stated that the arrested individuals would be prosecuted by the government as a deterrent to others.

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Hardship: FG kicks off N100bn consumer credit scheme

Published

1 day ago

April 25, 2024

NewsDirect

…Civil servants to benefit in first phase

By Grace Olatundun

The Federal Government of Nigeria has kicked off the N100 billion Consumer Credit Scheme for Nigerians as a tool to alleviate the escalating economic hardship in the country.

In a press statement on Wednesday by the President’s spokesperson, Ajuri Ngelale, he disclosed that interested Nigerians are expected to visit the portal of Nigerian Consumer Credit Corporation before May 15, 2024.

The President noted that the “consumer credit serves as the lifeblood of modern economies, enabling citizens to enhance their quality of life by accessing goods and services upfront, paying responsibly over time. It facilitates crucial purchases, such as homes, vehicles, education, and healthcare, which are essential for ongoing stability and the pursuit of their aspirations.

“Individuals build credit histories through responsible repayment, unlocking more opportunities for a better life. The increased demand for goods and services also stimulates local industry and job creation.”

The President stated further that every hardworking Nigerian should have access to social mobility, with consumer credit playing a pivotal role in achieving this vision.

“The Nigerian Consumer Credit Corporation (CREDICORP) achieves its mandate through the following: Strengthening Nigeria’s credit reporting systems and ensuring every economically active citizen has a dependable credit score. This score becomes personal equity they build, facilitating access to consumer credit, Offering credit guarantees and wholesale lending to financial institutions dedicated to broadening consumer credit access today and Promoting responsible consumer credit as a pathway to an improved quality of life, fostering a cultural shift towards growth and financial responsibility.

“In line with the President’s directive to expand consumer credit access to Nigerians, the Nigerian Consumer Credit Corporation (CREDICORP) has launched a portal for Nigerians to express interest in receiving consumer credit.

“This initiative, in collaboration with financial institutions and cooperatives nationwide, aims to broaden consumer credit availability.

“Working Nigerians interested in receiving consumer credit can visit www.credicorp.ng to express interest. The deadline is May 15, 2024.

“The scheme will be rolled out in phases, starting with members of the civil service and cascading to members of the public,” the statement read.

Recall that two months ago, a presidential spokesman, Bayo Onanuga, announced that the Federal Executive Council had given the nod for the establishment of the Consumer Credit Scheme.

He said the President’s Chief of Staff, Femi Gbajabiamila, will lead a committee that includes the Budget Minister, Attorney-General, and Coordinating Minister of the Economy and Finance to make the scheme a reality.

In March, the Chairman of the Federal Inland Revenue Service Chairman, Zacch Adedeji, said the Nigerian government would unveil its proposed N100 billion consumer credit loan in a few days.