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Rachel Jantiku: Tax rights and obligations, two sides of a coin

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It is common knowledge that taxation plays a vital role in the economic development of every country whether developed, developing or under developed, and Nigeria is no exception. Government at all levels depends on the tax it collects to run the affairs of the State and it is the duty of every taxable citizen to contribute their quota to this effect. Without taxes, there can be no country.

According to the Constitution of the Federal Republic of Nigeria 1999: Section 24 (f) of 1999 Constitution (as amended) it states that “it shall be the duty of every citizen to declare his income honestly to appropriate and lawful agencies and pay his tax promptly”. This is a legal requirement and it is fundamental to the successful operations of the country. Mind you, it is not an option or a recommendation but an obligation of every Nigerian citizen.

Some Nigerian Tax laws and Regulations which require compliance to tax payment include: Federal Inland Revenue Service (Establishment) Act (FIRSEA), Cap F36 LFN 2007; Personal Income Tax (PITA ), Cap P8, LFN 2004 as amended; Petroleum Profit Tax Act (PPTA), Cap P13, LFN 2004 as amended; Companies Income Tax (CITA), Cap C21, LFN 2004 as amended; Value Added Tax Act (VATA), Cap V1,LFN 2004 as amended; Tertiary Education Trust Fund (Establishment, Etc) Act (TETFEA) 2011 as amended; Stamp Duties Act (SDA), Cap S8, LFN 2004 as amended; Capital Gains Tax Act (CGTA), Cap C1, LFN 2004 as amended; National Information Technology Development Agency Act and the provisions of the Finance Act 2019, 2020, 2021 and 2023. These laws have provided the legal framework containing various tax obligations of a taxpayer.

Every taxpayer has certain rights such as: right to non-discrimination, transparency and accountability, adequate notice and information, redress, compliance assistance amongst others. But with these rights come responsibilities and obligations that must be fulfilled in compliance with the country’s tax laws. Some taxpayers fall short in fulfilling their tax obligations not necessarily because they want to but for lack or poor understanding of these obligations. This piece aims at shedding light on the key tax obligations of taxpayers in Nigeria.

The obligations of Nigerian taxpayers include, but are not limited to the following: registration for tax: Taxpayers are obligated to register with the appropriate tax authorities, depending on the type of tax they are liable for. This includes obtaining a Taxpayer Identification Number (TIN) from the Federal Inland Revenue Service (FIRS) for companies and the Joint Tax Board (JTB) for individuals.

Another obligation expected of taxpayers is record keeping. Taxpayers are required to maintain accurate and up-to-date records of their financial transactions, including income, expenses, assets, and liabilities. These records are essential for filing tax returns, substantiating deductions, and complying with tax audits. Record keeping is not common practice among small businesses. Yet it is the foundation for fulfilling your tax obligations. If you do not keep your records, how would you know what taxes you are meant to pay?

It is also the obligation of a taxpayers to file tax returns within the prescribed timelines. Individuals are required to file their Personal Income Tax (PIT) returns annually, while companies must file their Corporate Income Tax (CIT) returns within six months after the end of their financial year. Other tax returns, such as VAT returns and WHT returns, may also be required depending on the taxpayer’s activities. All too often, taxpayers think that if they do not make profits, or do not have a turnover above N25 million, then they are not required to file. This is not true. Filing returns is to be made whether or not you made profits or losses. As long as you are a taxpayer, you ought to file returns with the relevant tax authority.

Flowing from this obligation is the obligation to pay taxes—the most commonly spoke about obligation. Taxpayers have an obligation to pay the taxes they owe to the relevant tax authorities. This includes the timely remittance of Personal Income Tax, Companies Income Tax, Value Added Tax, Withholding Tax, and other applicable taxes. They also owe it as an obligation to comply with tax deductions. Employers and businesses that make payments subject to withholding tax (WHT) must deduct the appropriate tax amount at source and remit it to the tax authorities. This includes deducting WHT from salaries, contracts, dividends, interest, and other relevant payments.

Furthermore, taxpayers are required to provide accurate information and documentation as requested by tax authorities. This includes providing supporting documents for deductions, exemptions, and claims made on tax returns as well as cooperating with tax audits and investigations, providing requested information and records, and responding to inquiries in a timely and accurate manner.

To crown it all, taxpayers must comply with all relevant tax laws and regulations which includes staying updated on changes in tax laws and fulfilling their obligations accordingly.

By understanding and diligently leaving up to tax obligations, individuals and businesses actively participate in the development and progress of the country, ensuring a more prosperous, greater and equitable society for all.

Rachel Jantiku, is a researcher and writes from Abuja.

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Opinion

The problem with EFCC

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By Michael Owhoko, Ph.D

In every government or institution, there is a corresponding invisible hand that remote-controls its affairs with immense influence over decision-making process, predominantly on matters of interest.  In most cases, while the head, and perhaps, the kitchen cabinet, may be aware of this imperceptible parallel, it is mostly unknown to other members of the team, who ignorantly believe that the administration’s decisions are without external interference.

The Economic and Financial Crime Commission (EFCC) is a victim of this invisible hand.  The head of the Commission, and possibly, his inner caucus, are not oblivious of its presence and interference, but may be unknown to other members of staff.  By conferring the power to appoint the Chairman of the Commission on the President of the Federal Republic of Nigeria, lawmakers have unwittingly created an invisible hand for the EFCC.

The invisible hand is the President, and by extension, the Presidency. Section 2 (3) of the Economic and Financial Crimes Commission (Establishment) Act, 2004, clearly states that “the Chairman and members of the Commission, other than ex-officio members, shall be appointed by the President,” and the appointment shall be subject to confirmation by the Senate.By this Act, the EFCC was delivered as a bondservant from inception, lacking autonomy and courage to function effectively outside the grip and body language rhythm of its master, the President.  And since the head of the Commission occupies the driver’s seat, obeying all traffic regulations as beamed by the President, liberty is replaced with dependency.

Under this circumstance, what courage can the Commission’s Chairman muster to prosecute the President’s loyalists without upsetting his ego and sensibilities?  This is the burden of the EFCC. Until the power to appoint the Chairman of the Commission is removed from the President, the head of EFCC will continue to operate under dominance and influence of the President, doing his bid and covertly yielding to his whims and caprices, without ethical courage to act otherwise.

No matter how committed and sincerely intentional the Chairman of EFCC may be, his drive for efficiency is weakened by presidential interference.  Even if angels are imported from heaven, or heads of Terrorism and Financial Intelligence (TFI), and Federal Bureau of Investigation (FBI) of the United States of America (USA) are redeployed to manage the EFCC, their competence would be undermined by effect of the President. This finds expression in the crux of allusions to EFCC’s selective war against financial crime and money laundry in the country.

The public must recognise that the President is first, and foremost, a politician, who came to power on the ticket of his political party. He has his loyalists and those who supported the process of his ascension to power. Besides political affiliates, some of these stalwarts permeate both the critical public and private sectors. As a politician who sets his eyes on consolidation and re-election, the President may want to stand with his loyalists during moments of travail, as part of a reciprocation gesture for sustained support.  By this action, he stifles the power of the Commission to effectively go after real and powerful perpetrators of financial crime and money laundering in the country, making the Commission’s Chairman helpless without courage to step on toes for fear of being removed from office.

 The President also has the power to suspend or remove the Chairman of the Commission. Evidently, circumstances that had led to the sack of all past chairmen of EFCC could be linked to the invisible hand of the President. To avoid this route, EFCC handles high profile cases deemed to have ties with the President with caution, classifying them as persons with blue blood in their veins.  This is the trouble with EFCC, and why it is unable to effectively wage war against financial crimes and money laundry. Most ex-governors, ministers and other political and business bigwigs that have been prosecuted and convicted till date are those with either weak link or fallen out of favour with the President.

An example were former governors of Delta State, James Ibori, and Bayelsa state, Diepreye Alamieyeseigha (now late), whose demand for resource control irked the then President, General Olusegun Obasanjo.  The former President believed that the ex-governors were a source of funding for the defunct Niger Delta agitation group, the Movement for Emancipation of Niger Delta (MEND), and consequently activated the invisible hand which compelled the EFCC to cut the former governors to size. EFCC now tread with caution without discretionary initiative, constraining itself mainly to petitions received from the public, as against initiating and executing investigations on suspected individuals, and organisations, particularly those that are prone to financial crimes and money laundering.

The ministries, agencies, departments of government (MDAs), legislature, judiciary and the organised private sector, are black spots. The Nigerian environment is fraught with financial crime and money laundry, particularly the political space, yet, EFCC pretends not to know. Politics is a big industry and quick source of unearned income where people become multi-millionaires or billionaires overnight just by participation in politics or serving in the Executive, Legislature or the Judiciary. For example, National Assembly members who carry out oversight functions in various MDAs and private sectors, also double as contractors to these same organisations, despite conflict of interest.

The Niger Delta Development Commission (NDDC) is replete with such unethical practices, yet, EFCC feigns ignorance.Why is EFCC not interrogating legislators on padding of budgets?  Why is EFCC not putting spotlight on MDAs’ budgets, matching line items against executed projects?   Why is EFCC not looking at state governors and how they abuse Federal Account Allocation Committee (FAAC) remittances, including security votes and derivation funds? Despite admitting that Nigerian banks perpetrate about 70 percent of financial crimes in the country, why is EFCC not quizzing banks’ chief executive officers (CEOs) over questionable funds’ inflow, foreign exchange manipulation, and round tripping?  According to the Financial Institutions Training Centre (FITC), financial institutions in Nigeria collectively lost about N159 billion to fraud since 2020, yet, EFCC has not deemed it necessary to initiate any probe. Why are key operators and players in the Nigerian capital market not being investigated over unlawful manipulation of stock prices?

Besides, since crude oil exports constitute about two-third earnings, and over 90 percent of foreign exchange revenue of the government, why is EFCC not extending its investigation into crude oil exports to determine possible mismatch between actual production and revenue receipts?  Also, why are suspected financiers of terrorism and kidnapping not being investigated and prosecuted for money laundering?  Sadly, since the formation of EFCC, corruption, including financial crimes and money laundry, have been on the upward swing. This is contrary to the intention of the originators, the Financial Action Task Force (FATF) on Money Laundering, an intergovernmental organisation created by the Group of Seven (G7).

The purpose of the FATF was to use the EFCC to reinforce global war against money laundering, particularly at a time Nigeria was listed among 23 countries that were not supportive of the war against money laundering.  Response to this challenge led to establishment of the Commission through the EFCC Act, which further expanded the scope to include terrorism financing and economic and financial crimes in Nigeria. With flourishing corruption menace, and by extension, financial crimes in the public and private sectors, the environment is fertile enough to keep EFCC fully engaged.  But, so far, its efforts are not commensurate with the current depth and density of financial fraud in the country.

Except those that are endorsed by the invisible hand for thorough investigation, high profile cases with real negative impact on the economy are either deliberately overlooked or mismanaged.  Prosecuting yahoo internet fraudsters with no powerful links to authorities together with persons involved in spraying of naira notes are inadequate to justify EFCC’s existence.

In the absence of any underpinning motive to use them as a defence mechanism to showcase the Commission’s efforts at fighting financial crimes, these categories of offenders should be left for the Nigeria Police Force to handle. To rid the country of illicit wealth and growing corruption, Nigeria must review the process leading to the appointment and removal of the Chairman of EFCC in order to insulate the office from the influence and covert control of the President. This is imperative given the country’s low political culture.

Dr. Mike Owhoko, Lagos-based public policy analyst, author, and journalist, can be reached at www.mikeowhoko.com, and followed on X {formerly Twitter} @michaelowhoko.

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Opinion

Babajide Sanwo-Olu: 59th edition of God’s gift to humanity

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By Gboyega Akosile

There is no gainsaying that God in His infinite wisdom does not make mistakes – I know that most of the widely accepted religions in the world, Islam and Christianity, hold strongly to this belief. He does as He pleases Himself in the affairs of man, with absolute precision.

This can be said of those that God has chosen and used to run the affairs of men in the world. From the days of prophets, Kings, Queens and rulers up to the present day leaders, we believe that there is a hand of God in their individual emergence as controllers of men’s affairs.

Babajide Sanwo-Olu, the 15th Governor of Lagos State is a good example of “Godsend” and a perfect description of God-does-not-mistakes.

Calm, humane, urbane, visionary and exemplary in many respects, Governor Sanwo-Olu personifies character, giving credence to what we describe as Omoluabi in Yorubaland.

I remember one of his election slogans, “When Lagos speaks, Sanwo-Olu listens”, which attracted some criticism from naysayers who believed at the time that no leader would fulfil such a promise. They dismissed it, concluding that it was a mere political talk. Five years after, I see a man who does not only listen to the yearning of his people but takes immediate action to address their concerns. Yes, Sanwo-Olu listens!

In a space of five years, Governor Sanwo-Olu has touched many lives in a million ways than one could have imagined. In fact, his THEMES+ development agenda was carefully and deliberately designed to help the course of humanity. And he has painstakingly worked on each of the pillars in ways that they directly impact the lives of Lagosians.

It is common for politicians to go to the market with bricks and mortar- after all that is what the people can see and physically feel. He has done more than enough of the physical infrastructure and millions of Lagos residents can attest to such projects as roads, hospitals, schools, museums etc that Governor Sanwo-Olu has constructed to make life abundantly easy for Lagosians. Other areas of his magic touch, which perhaps are more major in my estimation are those that are not necessarily bricks and mortar in nature but those that help to build the minds of our people.

In education, Governor Sanwo-Olu revamped the educational system in Lagos, and today, Lagos ranks among the top five in the West African Examinations Council performance index. He has created additional two State-owned universities and he is already proposing a university of medical foundation for what would give birth to sustainable water supply at the Lagos State International Water Conference as well as open talks for safety at the Lagos International Fire Safety Conference.

One would wonder why he would approve those very important assignments on his birthday, when others like him would prefer to stay at home to receive guests and probably party. It is because Governor Sanwo-Olu understands the enormity of the tasks of governance and the expectations of the people whose needs he must attend to at every hour of the day.

I want to wish my boss, mentor and benefactor a special birthday full of happiness, peace and great health. May God continue to direct every single of your steps as you work very hard to leave Lagos State better than you met it.

Congratulations, sir.

Gboyega Akosile is the Special Adviser to Governor Sanwo-Olu on Media and Publicity.

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Opinion

AKK Gas Pipeline Project: Boosting economic benefits for Nigeria

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By Abdullahi Musa

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The Ajaokuta-Kaduna-Kano (AKK) gas pipeline project is nearing completion, with significant economic benefits expected for Nigeria.

The AKK gas pipeline is a 40-inch, 614-kilometre linear pipeline system running from Ajaokuta to Kano. It includes associated intermediate and terminal gas facilities, as well as all other related equipment necessary for transporting natural gas to off-takers at Abuja, Kaduna, and Kano. The Nigerian National Petroleum Company Limited (NNPC Ltd) aims to expand the existing gas pipeline network within Nigeria in response to the increasing demand for power and the need for gas-based industries.

A site inspection tour was conducted by an inter-ministerial team, which included Mohammed Idris, the Minister of Information and National Orientation; Wale Edun, the Minister of Finance and Coordinating Minister of the Economy; Ekperikpe Ekpo, the Minister of State, Gas Resources; Dr. Hadiza Balarabe, the Deputy Governor of Kaduna State; and Malam Mele Kyari, the Group CEO of NNPC Ltd. The tour took place at the Horizontal Directional Drilling (HDD) River Kaduna crossing, segment 2 of the AKK Gas Pipeline, which is being handled by the Brentex CPP consortium in Kaduna State.

The increased gas supply is expected to revitalise industries in the northern parts of the country, creating jobs and stimulating economic activity, as well as reducing gas flaring.

The Minister of Information and National Orientation, Mohammed Idris, described the gigantic project as a noble one while speaking at the drilling site of the River Kaduna crossing of the project.

“This project is a marvel,” Minister Idris said. “We should all be incredibly proud of what is being accomplished here.” The Minister emphasised the progress of the project, which is aimed to be completed by the first quarter of 2025, or possibly even earlier. He praised the Nigerian National Petroleum Corporation Limited (NNPCL) for its efficiency, citing the recent early completion of three gas projects in southern Nigeria.

“This shows that it is possible to set ambitious timelines and surpass them in our country,” the Minister stated.

He mentioned that the AKK pipeline is anticipated to revive dormant industries along the corridor from Ajaokuta to Kano. Minister Idris highlighted that this economic revitalization is an integral part of President Bola Ahmed Tinubu’s vision for prosperity.

“These revived industries will enhance the economic situation for many Nigerians in the region,” he explained. “This, in turn, can contribute to a non-kinetic approach to addressing insecurity.”

The minister highlighted President Tinubu’s commitment to completing ongoing projects, particularly those with significant national benefits. This marks a departure from past practices of abandoning projects during leadership changes.

The Minister emphasised Nigeria’s potential as a significant gas producer, in addition to its established petroleum industry. He emphasised the importance of not only finishing projects but also promoting a culture of reorientation towards proper maintenance to ensure their long-term success.

The Minister for Finance and Coordinating Minister of the Economy reaffirmed President Bola Ahmed Tinubu’s unwavering commitment to the completion of the Ajaokuta-Kaduna-Kano (AKK) Gas Pipeline Project during the visit.

President Tinubu has directed that this project must be delivered unconditionally,” he declared. “The federal government will provide everything necessary to ensure its successful completion by the first quarter of 2025. This project aligns perfectly with the President’s strategy for economic growth.”

The Minister praised the “impressive skill, determination, and capability” of the Nigerian National Petroleum Corporation (NNPCL), in partnership with Chinese and Nigerian collaborators, for completing this crucial infrastructure project.

“The AKK pipeline is a gas-to-power project,” Minister Edun elaborated. “It will deliver gas for power generation, industries, and even agriculture. Ultimately, it will create significant employment opportunities for Nigerians.” The pipeline spans a massive 614 kilometres from Ajaokuta to Kano and embodies President Tinubu’s strategy to revitalise the Nigerian economy.

“I commend NNPC, the Brentex CPP LTD, and all stakeholders who have brought this project this far,” the Minister stated. “I am confident, as is the President, that the project will be delivered on time by the 1st quarter of 2025. The entire team deserves our praise for bringing this project so close to the finish line. Their success should inspire all Nigerians to have confidence in our abilities to undertake and complete major projects, attracting partners to propel economic growth and job creation,” the Minister said.

In his speech, the Minister of State for Gas Resources, Mr. Ekperikpe Ekpo, emphasised that the project is a crucial initiative for Nigeria’s economic development. This project is expected to create job opportunities, increase revenue generation, and further bolster the national economy.

Additionally, it will contribute to the reduction of gas flaring by providing essential gas infrastructure, promoting environmental protection, and enhancing energy security for Nigeria.

The Deputy Governor of Kaduna State, Dr. Hadiza Balarabe, expressed the eagerness of Kaduna State on the potential benefits of the project.

“We are thrilled to see this project extend through Kaduna State. A significant section of the pipeline crosses our borders, and its positive impact will be considerable.”

She pointed to the Kakuri Industrial Area in Kaduna metropolis, stating, “Look around these factories. The AKK pipeline will breathe new life into these crucial textile industries and countless others. We are confident that Kaduna will be revitalised by this project.”

The highly enthusiastic Group CEO of the NNPCL, Malam Mele Kyari, provided an update on the project, stating, “We have made significant progress on this project and are nearing completion. We aim to deliver up to 2.2 billion standard cubic feet of gas through the pipeline. We are aware that our current consumption capacity does not align with this volume, so we are expanding our capacity. We are also working on various connections related to this project. It’s important to note that a key aspect of the Ajaokuta Kaduna Kano Gas Pipeline (AKK) project is the completion of the River Niger crossing, which will ensure a reliable supply to this pipeline. Additionally, we anticipate that the project will be fully operational by the first quarter of 2025.”

The Chairman of Brentex CPP Ltd (BCL), Mr. Howard Wang, provided an update on the progress of the Ajaokuta-Kaduna-Kano (AKK) Gas Pipeline Project. He stated that the consortium has completed 98.54 percent (315km) of the linear construction works during the active three-year construction period.

The consortium has completed 100 percent  of the Horizontal Directional Drilling (HDD) crossings for both the Shika River in Kaduna State and the Hadejia River in Kano State. Furthermore, they have made over 51 percent progress on the Kaduna HDD River crossing.

The BCL has fostered significant participation from the local communities by engaging over 51 local subcontractors at all project levels. The project has also directly employed more than 1,925 skilled and semi-skilled Nigerian workers.

He emphasised that the BCL is dedicated to improving the skills of the Nigerian workforce. The consortium has hired, trained, certified, and employed 674 Nigerians in 29 various oil and gas pipeline construction disciplines.

Notably, 339 of these individuals are from the project’s local communities. In its communities, the BCL has maintained positive and collaborative relationships with over 240 local communities situated along the pipeline’s right of way.

In terms of safety, the project has achieved an exceptional safety record, accumulating a total of 11.2 million man-hours with only one Lost Time Incident (LTI) reported in March 2024.

Mr. Wang expressed gratitude for the unwavering support of the Federal Government of Nigeria, led by NNPC Ltd. He also emphasised the numerous challenges faced during construction, such as weather fluctuations, the COVID-19 pandemic, security concerns, and global price escalations. Mr. Wang commended the resilience and dedication of the BCL team for successfully navigating these obstacles and delivering the AKK Pipeline construction segment.

The near completion of the AKK gas pipeline project is a significant step toward economic growth and development, especially in AKK corridors and the country as a whole.

Abdullahi Musa writes from Abuja

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