.NNPC borrowed from Petroleum Profit Tax to pay subsidy -Reps C’ttee.
.Demands records of taxes collected by FIRS.
.’Our role in tax enforcement, collection of funds’
Minister of Finance, Budget and Nation’al Planning Mrs Zainab Ahmed has said that the subsidy payment is undisrable situation that is affecting the nation’s fiscal policies leading to frequency of borrowing of funds by government.
The Minister made the remark on Thursday while appearing at House of Representatives to explain the role of government in payment of subsidy to oil marketing companies in Nigeria.
She said that despite the provisions of the fiscal policies of government on the MTEF the government cannot meet its obligations with existing subsidy debt.
The top government officials also hinted that subsidy is the difference between the pump price and the landing cost of petroleum product imported into the country.
She informed the Committee that subsidy payment stood at N1.33 trillion in 2020 budget and N1.5 trillion in 2021 fiscal year.
She added that the federal government’s annual subsidy budget is computed at N6.71 trillion in 2023 and the payment is calculated at N15.00 per litre.
This happened as the Special Ad-hoc Committee on Petroleum Product Subsidy Regime in the House has said that the Nigeria National Petroleum Corporation NNPC is involved in series of deduction of petroleum profit tax from its payment of tax into the Consolidated Revenue Fund of the Federation CRF.
The House Committee at an investigative hearing also uncovered that many government agencies are involved in self assessment of their income tax as against the express provisions of the nation’s tax laws.
Chairman of the House Committee Hon.Almustapha Aliyu and other committee members made the discovery when the Chairman of the Federal Inland Revenue Service FIRS Mr Mohammed Nami appeared before the probe panel
Meanwhile, the Federal Inland Revenue Service has responded to queries by the Special Adhoc Committee on Petroleum Subsidy Regime in the House of Representatives tasked to investig
The agency has said that its role is purely the collection of revenue for government and not keeping records of how the monies are expended.
Speaking at the Committee sitting at the House wing, the Executive Chairman, FIRS, Muhammad Nami, who was represented by the FIRS Coordinating Director, Compliance Support Group, Dr. Dick Irri, explained the role of the Service as provided by its Establishment Act was confined to the assessment of taxpayers, collection of taxes, accounting for and enforcement of taxes that were due to the government of the Federation.
“The Service’s statutory functions remains that of assessment, collection, accounting, and enforcement of payment of taxes that are due to the Government of the Federation and any of its agencies;” he explained, “taxes collected by the FIRS are usually shared amongst the three tiers of the government in line with the constitution of the country; and FIRS does not maintain records of what the funds are used for by the three tiers of government. The Service also does not have the power to ask for such records.”
Explaining earlier, the Executive Chairman had stated that the request by the Committee for information on subsidy payments and releases were not tax related, and thus were not within the statutory powers of the Service to respond to.
The Special Adhoc Committee had written to the FIRS requesting information on Subsidy Payment releases from the Consolidated Revenue Account, Subsidy claims, lodgment of FOREX into the Consolidated Revenue Account by the NNPC, among others.
“The Service holds the Adhoc Committee on Petroleum Products subsidy Regime and other Committees of the National Assembly in high esteem and will always give necessary support to ensure the success of their oversight functions;
“All the tax related information requested on your letter dated 1st July, 2022 has been duly submitted;
“All the 16 items listed on your letter dated 5th August 2022 are not tax related and also are not part of the responsibilities of the Service,” the FIRS Executive Chairman explained.
Apologising for his inability to appear in person, the Executive Chairman stated that his absence was due to other official national engagements outside the Federal Capital Territory.
The Special Ad-Hoc Committee on Petroleum Products Subsidy Regime, chaired by Hon. (Arc) Ibrahim Al-Mustpaha Aliyu was constituted in June 2022 with a mandate to investigate the Petroleum Products Subsidy Regime covering the periods from 2013-2021.
The petroleum products subsidy in Nigeria saying that its role is purely the collection of revenue for government and not keeping records of how the monies are expended.
Speaking at the Committee sitting at the House wing, the Executive Chairman, FIRS, Muhammad Nami, who was represented by the FIRS Coordinating Director, Compliance Support Group, Dr. Dick Irri, explained the role of the Service as provided by its Establishment Act was confined to the assessment of taxpayers, collection of taxes, accounting for and enforcement of taxes that were due to the government of the Federation.
“The Service’s statutory functions remains that of assessment, collection, accounting, and enforcement of payment of taxes that are due to the Government of the Federation and any of its agencies;” he explained, “taxes collected by the FIRS are usually shared amongst the three tiers of the government in line with the constitution of the country; and FIRS does not maintain records of what the funds are used for by the three tiers of government. The Service also does not have the power to ask for such records.”
Explaining earlier, the Executive Chairman had stated that the request by the Committee for information on subsidy payments and releases were not tax related, and thus were not within the statutory powers of the Service to respond to.
But most of the Committee members said that the FIRS should further investigate companies and agencies involved in deduction of tax payment to the government
A member of the Committee Hon.Benjamin Kalu (Abia, APC) while querrying the deductions as contained in a document provided said that some government agencies may have been involved in racketeering.
On the subsidy payment, most of the lawmkers said that the figure is outrageous and the government should abolish the subsidy regime and channel the funds to other productive sectors.
Another member of the probe panel Hon.Sergius Ogun(Edo,PDP) said that from the records it is obvious that the government is paying for what the citizens are not consuming in Nigeria.
Ruling on the presentation by the tax authorities, Chairman of the House Ad-hoc Committee Hon.Aliyu demanded the record of taxes so far collected by the nation’s tax authorities from 2013 to date.
