Economy
Tax Payment Not Mere Civic Obligation—LIRS Chairman
By Aduragbemi Omiyale
The Executive Chairman of the Lagos Inland Revenue Service (LIRS), Mr Ayodele Subair, has called for an increase in voluntary tax compliance, stressing that tax payment is not a mere civic obligation but a mandatory one.
Mr Subair made this submission at the 149th Joint Tax Board (JTB) meeting held at the Eko Hotels and Suites, Victoria Island, Lagos.
However, he pointed out that the tax models applied in major countries of the world with a high level of compliance have been difficult to replicate in Nigeria because all the phenomena that make it a success are not available in Nigeria.
According to him, the models include the existence of high levels of literacy of taxpayers and efficient data processing systems which would aid detection of fraud and high levels of trust between government and the people.
“However, an effort is being made by all tax authorities to improve on the ease of doing business and simplification of tax administrative processes which will in turn significantly advance the tax compliance levels within the country.
“In order for the government to provide the necessary infrastructures to aid growth and development, there has to be co-operation by all stakeholders which would in turn occasion a shift in the way and manner by which tax is administered and ultimately sustain or increase tax revenue for the state.
“Therefore, taxpayers must avail themselves of the quid-pro-quo of taxation. They must remember that paying tax is not a mere civic obligation as some misinformed commentators would have it but a mandatory legal one.
“As administrators, we must ensure that our mandate is carried out effectively and efficiently without fear or favour. We must ensure that all assessments are justifiable and guarantee that due process is followed in our statutory functions.
“The judiciary must ensure that justice is not only done but seen to be done. All parties involved in the revenue adjudicatory process, seeking justice must get justice.
“Cases before the courts and tribunals must be dispensed with timeously so that the much-needed revenue that accrues to the states are recovered. Statutory provisions must be interpreted appropriately without misinterpretations and favour to any party.
“Revenue laws, particularly income tax laws, must be straightforward and easy to understand and be complied with. Penalty for non-compliance on the other hand must be steep and commensurate with the offence in such a way that it deters non-compliance,” the LIRS chief said.
The Governor of Lagos State, Mr Babajide Sanwo-Olu, who was represented at the event by the Commissioner for Finance, Mr Rabiu Olowo, agreed with Mr Subair on the tax compliance issue in Nigeria.
He said between 1999 and 2021, the state has improved its Internally Generated Revenue (IGR) by 7,400 per cent to over N45 billion monthly.
Mr Sanwo-Olu noted that Lagos remains the largest contributor to national non-oil revenues, by way of corporate income taxes, VAT, customs duties, and port charges, among others.
However, he lamented that “in the subsequent re-distribution of resources, we do not see any reflection of the contribution of Lagos State. Our share in this redistribution fails to take into account the demographic and infrastructural burdens and pressures that accompany being the economic nerve-centre of the nation.”
“This state of affairs is what compelled the state, under the visionary leadership of Asiwaju Bola Ahmed Tinubu to commence a transformational reform of its internal revenue process, within the ambit of the law.
“The result is that since 1999 the LIRS has undergone the most extensive tax administration reforms of any sub-national government in Nigeria.
“I am pleased to let you know that Lagos State has grown its IGR from N600 million monthly in 1999 to over N45 billion monthly as of today, an astounding increase of 7,400 per cent. It all began with ensuring the foundational autonomy of the LIRS, which the Lagos State Revenue Administration Law, 34 2006 helped achieve.”
Also speaking at the event, the Executive Chairman of the Federal Inland Revenue Service (FIRS) and Chairman of JTB, Mr Muhamad Mamman Nami, who was represented by the Coordinating Director of JTB, Mr Mohammed Lawal Abubakar, stated that the fact that Nigeria still struggles with low tax to GDP ratio shows that revenue generation system needs a total overhaul.
By Adedapo Adesanya
Seplat Energy Plc will revive hundreds of Nigerian oil wells laying fallow after completing the acquisition of Mobil Producing Nigeria Unlimited (MPNU) from ExxonMobil.
The company said it aims to lift oil output to about 200,000 barrels a day, a move that will help boost Nigeria’s oil production levels, as it aims to reach 2 million barrels per day next year.
The transaction, according to Seplat, “is transformative for Seplat Energy, more than doubling production and positioning the company to drive growth and profitability, whilst contributing significantly to Nigeria’s future prosperity.”
The completion of the Seplat-ExxonMobil deal has created Nigeria’s leading independent energy company, with the enlarged company having equity in 11 blocks (onshore and shallow water Nigeria); 48 producing oil and gas fields; 5 gas processing facilities; and 3 export terminals.
Recall that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) in October approved the deal as part of a series of approvals, while it blocked Shell’s asset sale of up to $2.4 billion to the Renaissance consortium.
The acquisition of the entire issued share capital of MPNU adds the following assets to the Seplat Group: 40 per cent operated interest in OML 67, 68, 70 and 104; 40 per cent operated interest in the Qua Iboe export terminal and the Yoho FSO; 51 per cent operated interest in the Bonny River Terminal (‘BRT’) NGL recovery plant; 9.6 per cent participating interest in the Aneman-Kpono field; and approximately 1,000 staff and 500 contractors will transition to the Seplat Group.
MPNU adds substantial reserves and production to Seplat Energy; 409 million barrels of oil equivalent (MMboe) 2P reserves and 670 MMboe 2P + 2C reserves and resources as at 30 June 2024 and 6M 2024 average daily production of 71.4 kboepd (thousand barrels of oil equivalent).
Business Post reports that Seplat will be part of the payment this year, and will defer some to next year,
Speaking on the transaction, the Chairman of Seplat Energy, Mr Udoma Udo Udoma commended President Bola Tinubu for supporting this transaction and appreciated the support and diligence of the various ministries and regulators for all the work to reach a successful conclusion.
“We are delighted to welcome the MPNU employees to Seplat Energy. We are excited to begin our journey in a new region of the country, and we look forward to replicating the positive impacts we have achieved within our communities in our current areas of operations.
“Seplat’s mission is to deliver value to all our stakeholders, and we treasure the good relationships we have developed with the government, regulators, communities and our staff.”
On his part, the chief executive of Seplat Energy, Mr Roger Brown, described the acquisition as a major milestone, adding, “I extend my thanks to the entire Seplat team for their hard work and perseverance to complete this transaction.
“MPNU’s employees and contractors have a strong reputation for safety and operational excellence, and I welcome them to the Seplat Energy Group.
“We have acquired a company with one of the best portfolios of assets and related infrastructure in a world-class basin, providing enormous potential for the Seplat Group. Our commitment is to invest to increase oil and gas production while reducing costs and emissions, maximising value for all our stakeholders.
“MPNU is a perfect fit with our strategy to build a sustainable business that can deliver affordable, accessible and reliable energy for Nigeria alongside attractive returns to our shareholders”.
By Adedapo Adesanya
The National Pension Commission (PenCom) is projected to close the year with over N22 trillion in pension assets impacted by challenges like inflation and monetary policies.
This is according to PenCom Director-General, Mrs Omolola Oloworaran, at a press conference in Abuja on Thursday.
She said as of October 2024, the Contributory Pension Scheme (CPS) had 10.53 million registered contributors and pension fund assets worth N21.92 trillion.
Speaking at the conference-themed Tech-driven Transformation Shaping the Pension Landscape, which showcased PenCom’s strategic commitment to innovation, she said that the numbers reflected the agency’s unwavering commitment to fund safety, prudent management, and sustainable growth.
She explained that the pension environment was impacted by the wider economic challenges facing the country, noting that the sector battled multi-year high inflation, Naira devaluation, and the lingering effects of unorthodox monetary policies by the Central Bank of Nigeria (CBN).
Business Post reports that the apex bank hiked interest rates by 875 basis points this year alone to tackle persistent inflation which peaked at 33.8 per cent as of October.
She said that these challenges eroded the real value of pension funds and impacted contributors’ purchasing power.
“To address these issues, the commission has initiated a comprehensive review of its investment regulations.
“It is focusing on diversifying pension fund investments into inflation-protected instruments, alternative assets, and foreign currency-denominated investments.
“The goal is to safeguard contributor savings and ensure resilience against future economic volatility,” she said.
She restated the commission’s commitment to expanding pension coverage, particularly through the advanced micro-pension plan designed to encourage participation from the informal sector using technology.
“This initiative will make it easier for everyday Nigerians to save for retirement, aligning with our vision of inclusive growth and financial stability for all.
“The backlog in retirement benefits for retirees of the Federal Government’s Ministries, Departments, and Agencies (MDAs) will soon be settled.
“The federal government recently disbursed N44 billion under the 2024 budget to settle approved pension rights.
“We are collaborating with the Federal Government to institutionalise a sustainable solution to ensure retirees receive their benefits promptly, eliminating delays,” Mrs Oloworaran said.
She said that PenCom’s technology-driven transformation aimed to make the CPS more accessible, reliable, and sustainable.
“From data management to seamless contributions and regulatory supervision, we are paving the way for a future where the pension industry serves all Nigerians effectively,” she said,
Mrs Oloworaran also said that the e-application portal for pension clearance certificates has replaced the manual processes and enhanced the ease of doing business in the sector.
“Since its deployment, 38,528 pension clearance certificates have been issued. This initiative ensures compliance and secures the future of Nigerians working in organisations that interact with the government,” she said.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange closed flat on Thursday, December 12 after it ended the trading session with no single price gainer or loser.
As a result, the market capitalisation remained unchanged at N1.055 trillion as the NASD Unlisted Security Index (NSI) followed the same route, remaining at 3,012.50 points like the previous trading session.
However, the activity chart witnessed changes as the volume of securities traded at the bourse went down by 92.5 per cent to 447,905 units from the 5.9 million units transacted a day earlier.
In the same vein, the value of securities bought and sold by investors declined by 86.6 per cent to N3.02 million from the N22.5 million recorded in the preceding trading day.
But the number of deals carried out during the session remained unchanged at 21 deals, according to data obtained by Business Post.
When trading activities ended for the day, Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units sold for N3.9 billion, Okitipupa Plc came next with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc was in third place with 297.5 million units worth N5.3 million.
Also, Aradel Holdings Plc remained the most active stock by value (year-to-date) with 108.7 million units worth N89.2 billion, followed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units sold for N5.3 billion.
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