Govt disowns alleged $20b loss from tax waivers

THE Federal Government has distanced itself from a publication in Thisday Newspaper of May 10, 2015, which alleged that the Nigerian Import Promotion Council (NIPC), between 2010-2014, wrongfully granted Pioneer Status Incentive to undeserving companies, and which resulted in loss of $20 billion revenue.

In a joint statement, the Ministry of Industry, Trade and Investment (MITI), the Nigerian Investment Promotion Commission (NIPC), Federal Inland Revenue Service (FIRS), and Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) said the Co-ordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, who was said to have made the claim, has since refuted the allegation.

The statement noted that Okonjo-Iweala clarified that she only made some observations on the impact of the Pioneer Status Incentive on government revenue some nine months ago and that the issues have since been streamlined in line with the ongoing reforms in the Tax Administration System and Fiscal Policy Reforms.

This, it said, entailed the review of the Pioneer Status Incentive administration by an inter-ministerial committee.

It read in part: “The motive behind the above mentioned publication is difficult to understand, yet it remains very disturbing when one considers its negative impact on the reputation and integrity of the highly reputable Nigerian company, Seplat Petroleum Development Company Plc, which has attained the enviable feats of being listed and successfully trading in the Nigerian and London Stock Exchanges.”

It stated that there is no established case of fraud in granting pioneer status incentive to companies by NIPC as alleged, because the approval to grant so to Nigeria-owned oil companies was duly approved by the Federal Government.

Going forward, the inter-ministerial committee agreed that certain sectors considered matured should be delisted from pioneer schedule, while new priority sectors be enlisted based on the ongoing impact assessment exercise being undertaken by Akintola Williams Deloitte.

More so, the pioneer status incentives granted to Marginal Oil Field Operators/Nigeria-owned oil companies is in line with government’s Local Content Policy to promote Nigerian content development, local capacity and capabilities, just as it was designed to enhance the positioning of Nigerian oil firms to take control of the industry in the wake of divestment by the International Oil Companies (IOCs).

It maintained that there was nothing as “revenue loss of $20 billion” resultant from the grant, as alleged in the publication, as the figure unrealistic, speculative and lacks any material basis.