Govt seeks tougher sanctions for tax evaders
ACTING President Goodluck Jonathan yesterday sent a bill to the National Assembly, seeking far-reaching tax reforms.
In the meantime, the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, has promised that henceforth, transparency and due process would be observed in the next oil licensing rounds expected to take off soon. In the bill, which was read on the floor of the upper legislative chamber by the Deputy Senate President Ike Ekweremadu, who presided yesterday, Jonathan sought 31 amendments to the existing tax law.
One area where the Acting President seeks amendment is a new clause in section 33 of the Principal Act. According to him, the new clause should read: “There shall be allowed a consolidation relief allowance of N200,000 plus 20 per cent of the gross emolument subject to a minimum of one per cent of gross income which ever is higher and the balance shall be taxable in accordance with the income table in the sixth Schedule to this Act”.
The proposed amendment further states: “For the purpose of this section, gross emoluments mean wages, salaries, allowances (including benefits in kind), gratuities, superannuation and any other incomes derived solely by reasons of employment”.
In section 38 of the Principal Act, the amendment proposed by the Executive says: “Where the government of the Federal Republic of Nigeria has entered into agreement with the government of any country outside Nigeria with a view to affording relief from double taxation in relation to tax imposed under the provisions of this Act , any tax of similar character imposed by the laws of that country, and that it is expedient that the agreement should have effect, the agreement shall have effect notwithstanding any thing in any enactment.”
In the proposed amendment, copious provisions are made for punishment for those who violate the law. For instance, the new provision in section 52 says: “If a taxable person fails or refuses to keep books of accounts which, in the opinion of relevant tax authority are adequate for the purpose of the tax- (a) such a taxable person other than those in salary employment shall be liable to a penalty of N50,000; and (b) the relevant tax authority may by notice in writing direct the person to keep such records, books and accounts, in such form and in such language as may be specified in the notice.”
Proposed section 74 reads: “Any person or body corporate who, being obliged to deduct tax under sections 69, 70, 71 or 72 of this Act, fails to deduct, or having deducted, fails to remit such deductions to the relevant tax authority within 30 days from the day the amount was deducted or the time the duty to deduct arose, shall be liable to a penalty of an amount of the tax not deducted or remitted in addition to the amount of tax not remitted or deducted plus interest at the prevailing minimum re-discount rate of the Central Bank of Nigeria”.
The proposed section 81 of the Act says: “Every employer shall be required to file a return with the relevant tax authority of all emoluments paid to his or its employees, not later than 31st January of every year in respect of all employees in his or its employment.
“Any employer who contravenes the provisions of this section shall be liable to a penalty of N500,000 in the case of a body corporate and N50,000 in the case of an individual.
The proposed amendment to section 106 of the law gives the National Assembly the power to cancel or reduce any rate, tax, duty or fee chargeable.
Speaking in Houston, Texas, United States at the 41st Offshore Technology Conference (OTC), Alison-Madueke said she would put a high premium on streamlining the contracting processes and procedures in the oil and gas industry with the overall intention of eliminating time wastage.
The OTC is the world’s largest offshore oil industry event with exhibitors bringing their latest technologies and equipment to the fore for the benefit of the industry. Over 3,000 companies and 70,000 representatives/delegates from more than 120 countries are attending the event which kicked off on Monday.
A statement by the Group General Manager, Group Public Affairs Division of the Nigerian National Petroleum Corporation (NNPC), Dr. Levi Ajuonuma in Abuja yesterday said the country is putting up an impressive showing at the event with more than 20 indigenous companies with visible presence in the local oil and gas industry in attendance.
Ajuonuma explained that with the NNPC as the major anchor, the Nigerian stand at the OTC which was opened by Alison-Madueke has been a beehive of activity with potential investors trooping in to avail themselves of available business opportunities in one of the world’s biggest oil producing nation.
According to him, the search for investment opportunities in Nigeria is helped by the installation of modern Info-Pots in customised information kiosks by the NNPC to provide essential information about the corporation and the country’s oil and gas industry to prospective investors.
Under the arrangement, a visitor to the NNPC/Nigerian stand can avail himself of information about the industry in Nigeria by punching at the Info-Pot which has “touch screen” features.
Commenting on the overwhelming presence of the NNPC and Nigerian operators at the event, the minister thanked the Petroleum Technology Association of Nigeria (PETAN), for ensuring that the oil and gas industry in the country is maximizing the benefit of cross-fertilization of ideas garnered through exposure to the OTC through the years.
The minister said: “The cutting edge technologies that we have been exposed to here within this sector are obvious to all our operators. It is also very heartening to see many of our indigenous service companies who as you know form the crucial underbelly that carries the industry in Nigeria.”
She further noted that coming on the heels of the signing of the Nigerian Content Development law and the anticipated coming of the Petroleum Industry Bill, Nigeria’s participation at OTC 2010 was undoubtedly a pertinent and rewarding experience for the sector.