Abuja blames them for avoiding VAT and Withholding Tax for 10 years
By Jeph Ajobaju, Chief Copy Editor
Abuja has shifted blame for the ballooning national debt on local and foreign firms that failed to remit N7 trillion in Value Added Tax (VAT) and Withholding TAX between 2010 and 2020.
Nigerian Financial Intelligence Unit (NFIU) Director Modibbo Tukur said the companies – which he did not name – are partly responsible for the high debt.
He stressed that tax avoidance limits government’s revenue and helps fuel massive borrowing.
But what Tukur did not say, and a fact Muhammadu Buhari himself also ignores, is that
- Buhari encourages tax evasion by willingly neglecting to prosecute big or influential tax dodgers – rooted in the culture of criminals bribing public officials to escape punishment.
- Buhari willingly fails to prosecute public officials, including his ministers, who steal public funds indirectly by inflating contracts, collecting bribe; or directly by grabbing hard cash from the treasury.
To cite just one example. The office of the federal Auditor General confirmed in its 2018 annual audited report that N105,662,350,077.46 of public funds is missing, misappropriated or unaccounted for across 149 ministries, departments, and agencies (MDAs).
Buhari has deliberately failed to probe the fraud, arrest and prosecute those responsible, and recover the missing funds to reduce the pressure to take more loans that impoverish Nigerians.
__________________________________________________________________
Related articles:
Nigeria’s debt now N35.46tr. Minus Buhari’s latest gambit for $4b and €710m loans
Abuja reiterates debt will rise as revenue falls
__________________________________________________________________
Nigeria’s rising debt
Nigeria’s debt rose to N35.465 trillion in half year ended June 30 (H1 2021), according to the Debt Management Office (DMO), a jump from $87.24 billion in the first quarter of 2021 (Q1 2021) and $86.39 billion (Q4 2020).
This excludes $4 billion and €710 million for which President Muhammadu Buhari requested approval from the National Assembly (NASS) on September 13 to borrow from bilateral and multilateral organisations to fund the 2021 budget deficit.
Finance Minister Zainab Ahmed has announced that Nigeria’s debt will rise to N38.68 trillion by 2022.
Tukur said the NFIU arrived at the N7 trillion tax dodge based on analysis of firms operating in Nigeria, per PREMIUM TIMES.
The amount is about half the 2021 federal budget which has a deficit of over N5 trillion. The budget for 2022 has a revenue shortfall of more than N6 trillion and the government said it will borrow to close the gap as it has done over the years.
Tukur told the Senate Anti-Corruption Committee during defence of NFIU’s 2022 budget that the tax analysis covered the period between 2010 and 2020.
He said the companies, mostly in oil and gas and telecoms, had a total inflow of over N76 trillion in the period, with a projected payment of over N3.9 trillion VAT.
Their total outflow was more than N72 trillion with a projected Withholding Tax of over N3.7 trillion, he added.
Tukur said the analysis, which was done for the Federal Inland Revenue Service (FIRS), will also be submitted to the Finance Ministry for further action.
He expressed the hope that all firms involved in the tax evasion will be compelled to reconcile their accounts and pay all taxes.
“If compliance is still weak, this will be escalated to the Presidency, the National Assembly, EFCC, ICPC and even the Corporate Affairs Commission,” he warned.
Legal tussle with Multichoice
The FIRS is in a legal battle over unpaid tax by Multichoice, the satellite television provider in Nigeria which is based in South Africa.
It accuses Multichoice of failing to pay N1.2 trillion Company Income Tax and $342 million VAT.
Multichoice lost an appeal at the Tax Appeal Tribunal last month but has filed another appeal at the Federal High Court.