5,000 companies, MDAs owing N5.2 tn withholding tax – Reps

The House of Representatives has directed the Federal Inland Revenue Service (FIRS) to embark on the recovery of all taxes owed to the federal government by Ministries, Departments and Agencies (MDAs), oil companies, other corporate organisations and individuals. The directive followed the adoption of a motion moved by Esosa Iyawe at the plenary on Thursday […]

The House of Representatives has directed the Federal Inland Revenue Service (FIRS) to embark on the recovery of all taxes owed to the federal government by Ministries, Departments and Agencies (MDAs), oil companies, other corporate organisations and individuals.

The directive followed the adoption of a motion moved by Esosa Iyawe at the plenary on Thursday saying that the federal government is being owed billions in unremitted revenue and taxes by various entities including its agencies in the country.

He said, “Under-remittance and non-remittance of tax deprive the federal government of much-needed funds to drive its policies for national development, and if the situation is not urgently addressed, the effect could be crippling on the country’s already dwindling economy.

“In 2021, the Federal Inland Revenue Service (FIRS) revealed that the sum of (N17, 690,341,565) seventeen billion, six hundred and ninety million, three hundred and forty-one thousand, five hundred and sixty-five Naira, was owed in tax by some Companies, whose addresses were untraced till date, but no action was taken to locate or recover the funds.

• Tinubu suspends Salihijo, REA MD, orders probe
• Tinubu works so hard for Nigerians, he Sleeps At 2 am and wakes at 7am – Ngelale

“Audit reports from 2015 to 2019, which revealed government agencies owing hundreds of billions in FIRS taxes comprising underpayments and under-recoveries and over 5,000 Companies and Ministries, Departments and Agencies (MDAs) of the Federal Government owing (N5.2 trillion) (five trillion, two hundred billion, Naira in withholding taxes.

“While small-scale businesses in Nigeria are frustrated by multiple taxations by the Federal Inland Revenue Service, States and Local Government Authorities, multinational Companies and other corporate organisations are getting the kid-glove treatment”.

Rep. Iyawe noted that taxation is a tool used to regulate economic and commercial activities and ensure the availability of funds for sustainable national development.

He said the Federal Inland Revenue Service Act of 2004 established the Federal Inland Revenue Service (FIRS) to assess, collect, remit and account for the Federation’s taxes.

The House adopted the motion and mandated its Committees on Public Accounts and Finance to investigate the non-compliance on tax remittance by Ministries, Departments and Agencies (MDAs) of government, oil companies and other organisations and ensure that all debts in taxes owed the federal government are duly recovered.

The committees are to report back within four (4) weeks for further legislative action.

Meanwhile, the House of Representatives has commenced an investigation over delays in the implementation and utilisation of 3% ‘Host Community Funds’ to execute Corporate Social Responsibility (CSR) projects by oil exploration and services companies operating in Nigeria.

The House Committee on Corporate Social Responsibility is carrying out the investigation to ascertain the companies’ level of compliance with extant laws by the companies, before and after the enactment of the Petroleum Industry Act (PIA) 2021.

It would be recalled that Section 240(2) of the Act provides that companies should contribute 3% of their actual operating expenditures of the previous financial year in the upstream petroleum activities affecting the host communities through the host communities’ development trust fund.

It reads, “Funding of the Trust by virtue of Section 240, each settlor is required to contribute 3% of its actual operating expenditure in the preceding calendar year in respect of upstream petroleum operations affecting the host communities for which the applicable host community development trust was established”.

The committee, after a resolution at its investigative hearing on Thursday, demanded details of Corporate Social Responsibility (CSR) projects executed or ongoing by oil companies in host communities across the country.

Some oil exploration as well as service companies appeared before the committee and made submissions regarding their Corporate Social Responsibility (CSR) obligations to their host communities.