Economy
Reps to Probe FG Over MTN N2.6trn Tax Evasion Claims
By Adedapo Adesanya
The House of Representatives has said it would probe further claims of the N2.6 trillion capital allowances granted to MTN by the federal government through the Ministry of Trade and Industry.
This was disclosed by the Chairman of the House Committee on Public Accounts, Mr Oluwole Oke, at the resumed investigative hearing into the audit queries on tax evasion issued by the office of the Auditor-General for the Federation (oAuGF) on Tuesday.
He disclosed that the oAuGF report indicated that the documents relating to the N2.6 trillion capital allowances were allegedly forged.
While stressing that the committee invited MTN over tax evasion, Mr Oke explained that the oAuGF, in its report, observed that the Federal Inland Revenue Service (FIRS) accorded value to the telecoms company while in some cases without certificates and evidence of capital allowance issued by Federal Ministry of Trade and Industry, reflecting the whole assets procured by the company.
“We have issues in this country where funds are not adequate for government to carry out policies and programmes, which is why we had to borrow even though there are massive revenue leakages,” he said.
“MTN has also made appearances where N2.6 trillion was seen as the taxable value for assets of the company and we asked as to where they exist and who verified them because they had already claimed value for them with the FIRS,” he added.
The lawmaker maintained that Nigerians have the right to know the implications of MTN taking a certificate of N2.6 trillion to FIRS for tax waivers on the economy.
“The parliament simply wants to know whether it should sustain the query raised by the Auditor General or absolve the company of the allegations of tax evasion, as it would be wrong to accuse it of such if these records tally with the company’s submission,” he explained.
“The issue says that we should speak to facts and law. You’re here when we asked the Industry Ministry and they said both the local and foreign contents were the certificates they issued to you. However, the Auditor-General says such issuance appears to have been falsified which was the basis of its query to you,” the lawmaker further stated.
In her response, MTN’s General Manager, Mrs Yemisi Adeleye, explained that the company has submitted all relevant documents issued by the Federal Ministry of Trade and Industry reflecting the value of N2.6 trillion given to it.
While responding to questions on the 2016 inspection relating to the capital allowances granted to the company, Mrs Adebayo observed that the company made claims to the Federal Ministry of Trade and Industry at the end of the year prompting them to choose a location and inspect, as it was physically impossible for them to inspect thousands of assets across the country.
Hence, the Ministry, based on their selection using supporting documents granted the allowances.
She said what the company had in 2016 was the automated card record bearing Ins and Outs of the team leader, one Mr Ike.
When asked how many people were on the team with Ike who had the access card and inspected assets from March 29 to April 4, she said she couldn’t remember the identities of the Ministry officials as the team members were not captured individually in the record.
She said what they presented to the FIRS was what their security team gave to them.
When asked again if the Ministry wrote the company informing it of the inspection date and the list of team members or just by words of mouth, Mrs Adebayo said that the Ministry formally communicated to that effect.
Also asked how many assets they inspected within the five days, she said she could not recall.
She argued that the most expensive of the company’s infrastructure were warehoused in their switches located in Ojota in Lagos, Port Harcourt, among other places.
While giving details on the claims made by the company for capital allowance, she disclosed that the sum of N18,967,410,769 was claimed in 2016, adding that in 2017, a logbook was brought back, reading Abuja switch with Ike and three others as inspection team members.
According to her, a total of N148 billion capital allowance was granted to the company, while N210 billion was approved in 2018 after the visit to the Ojota switch, as well as N190,629,586,000 in 2019 following a visit to the Port Harcourt switch.
When asked if all the assets procured by the company in 2019 were all located at the Port Harcourt switch, she responded in the negative, adding that in 2020, the Ministry officials visited the Abuja switch, another team visited the Ojota switch, while another visited Port Harcourt and granted capital allowance worth N219,540,623,545.
When asked if she would agree to give out a value of N219 billion based on one inspection that visited just three locations out of over a thousand locations, she said the company only filed what was approved by the inspection team with the FIRS for consideration.
Mr Oke, in his remarks, reiterated the lawmakers’ resolve to ascertain the patriotic and professional involvement of the Ministry officials, saying that they cannot fold their arms and watch when people whose salaries and allowances were appropriated to do a job failed to carry out their duties under the law.
To this end, the committee resolved that all the officials involved in the inspection from the Federal Ministry of Trade and Industry should be made to appear before it.
It also requested the tax records covering the periods under review from both MTN and FIRS for further legislative scrutiny.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.69 per cent appreciation on Monday, January 13, as investors showed renewed interests in unlisted securities.
During the trading session, the NASD Unlisted Security Index (NSI) increased by 21.07 points to wrap the session at 3,095.00 points compared with the 3,073.93 points recorded in the previous session.
In the same vein, the value of the local alternative stock exchange went up by N7.22 billion to close at N1.061 trillion compared with last Friday’s N1.051 trillion.
Yesterday, FrieslandCampina Wamco Nigeria Plc recorded a growth of N3.78 to close at N42.00 per share versus N38.22 per share, Mixta Real Estate Plc improved by 20 Kobo to end at N2.35 per unit versus the preceding closing rate of N2.15 per unit, and Industrial and General Insurance (IGI) Plc gained 1 Kobo to finish at 25 Kobo per share compared with the previous session’s 24 Kobo per share.
Conversely, Geo-Fluids Plc lost 29 Kobo to quote at N4.56 per unit compared with the preceding day’s N4.85 per unit, and Afriland Properties Plc slid by 75 kobo to end the session at N15.50 per share versus the preceding closing rate of N16.25 per share.
During the session, the volume of securities traded decreased by 27.2 per cent to 3.1 million units from 4.3 million units, the value of securities slumped by 81.5 per cent to N3.2 million from N17.2 million, and the number of deals expanded by 57.9 per cent to 30 deals from 19 deals.
At the close of trades, FrieslandCampina Wamco Nigeria Plc remained the most active stock by value (year-to-date) with 1.9 million units worth N74.2 million, followed by 11 Plc with 12,963 units valued at N3.2 million, and IGI Plc with 10.7 million units sold for N2.1 million.
Also, IGI Plc remained the most traded stock by volume (year-to-date) with 10.6 million units sold for N2.1 million, trailed by FrieslandCampina Wamco Nigeria Plc with 1.9 million units valued at N74.2 million, and Acorn Petroleum Plc with 1.2 million units worth N1.9 million.
By Adedapo Adesanya
The Naira recorded a 0.38 per cent or N5.86 depreciation on the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Monday, January 13 to close at N1,548.89/$1, in contrast to the preceding session’s N1,543.03/$1.
The local currency weakened further in the official market yesterday as the deadline to cut off Bureaux De Change (BDC) operators from the Electronic Foreign Exchange Matching System (EFEMS) built to enhance transparency in the FX system looms.
Recall that the Central Bank of Nigeria (CBN) in December opened a 42-day window to allow BDCs to buy FX worth $25,000 per week from the spot market.
However, the domestic currency appreciated against the Pound Sterling in the official market on Monday by N11.87 to trade at N1,877.43/£1 compared with last Friday’s N1,889.29/£1 and against the Euro, it improved its value by N4.94 to close at N1,578.87/€1, in contrast to the previous trading day’s N1,583.81/€1.
A look at the parallel market indicated that the Nigerian Naira slumped against the greenback yesterday by N5 to sell at N1,655/$1 compared with the preceding session’s N1,650/$1.
In the cryptocurrency market, large positive outcomes came even as risk assets weighed the possibility of US Federal Reserve rate cuts in the wake of Friday’s hotter-than-expected US jobs report.
The biggest gainer was recorded by Dogecoin (DOGE) as it rose by 3.9 per cent to sell at $0.3422, Bitcoin (BTC) grew by 0.9 per cent to trade at $94,843.98, Binance Coin (BNB) appreciated by 0.8 per cent to sell for $687.84, and Solana (SOL) recorded a 0.8 per cent growth to quote at $185.24.
Further, Ripple (XRP) increased its value by 0.7 per cent to close at $2.53, and Cardano jumped by 0.3 per cent to settle at $0.9469.
On the flip side, Ethereum (ETH) depreciated by 1.9 per cent to finish at $3,159.52, and Litecoin (LTC) went down by 0.9 per cent to close at $98.68, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
By Adedapo Adesanya
Oil prices rose on Monday as Chinese and Indian buyers sought new suppliers after the administration of President Joe Biden of the United States imposed toughest sanctions yet on Russian energy.
Last Friday, the US Treasury Department imposed sanctions on Gazprom Neft and Surgutneftegas, as well as 183 vessels that traded oil as part of Russia’s so-called “shadow fleet” of tankers. The move is expected to cost Russia billions of Dollars per month.
This pushed the price of Brent higher by $1.25 or 1.6 per cent yesterday to $81.01 per barrel and raised the US West Texas Intermediate (WTI) crude by $2.25 or 2.9 per cent to $78.82 a barrel.
As a result, Chinese and Indian refiners are seeking alternative fuel supplies as they adapt to the severe sanctions on Russian producers and tankers that are designed to curb the revenues of the world’s second-largest oil exporter.
The large sanction gives Ukraine and the US President-elect, Mr Donald Trump, leverage to reach a deal for peace in the almost three years war.
Market analysts note that these sanctions have the potential to take as much as 700,000 barrels per day of supply off the market, which would erase the surplus that we are expecting for this year.
On its part, Goldman Sachs estimated that vessels targeted by the new sanctions transported 1.7 million barrels per day of oil in 2024, or 25 per cent of Russia’s exports. The bank is increasingly expecting its projection for a Brent range of $70-$85 to trade.
The Vladimir Putin-led government said the sanctions risked destabilising global markets, and Russia would seek to counter them.
Many of the tankers named have been used to ship oil to India and China after previous Western sanctions. A price cap imposed by the Group of Seven countries in 2022 shifted trade in Russian oil from Europe to Asia. Some of the ships have also moved oil from Iran, which is also under sanctions.
Also, six European Union countries called on the European Commission to lower the price cap put on Russian oil by G7 countries, arguing it would reduce Russia’s revenue to continue the war while not causing a market shock.
However, weaker demand from major oil buyers, China, could have an impact on the tighter supply as data showed that China’s crude oil imports fell in 2024 for the first time in two decades outside of the COVID-19 pandemic.
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