News
FG Flies the Flag for Corporate Tax Self-Harm- Report
In Nigeria, only one of death and taxes is certain, according to Reuters.
Growing international pressure to fight climate change means Africa’s biggest economy needs to wean itself off its unhealthy reliance on oil receipts.
Ad hoc targeting of foreign companies is a ham-fisted way of tapping alternative sources of revenue.
The latest victim of Abuja’s scattergun approach to corporate taxation is South Africa’s MultiChoice (MCGJ.J).
Federal Inland Revenue Service (FIRS), Nigeria’s tax collection office said the pay-TV business owes $4.4 billion in unpaid dues, nearly a third more than the company’s value on the Johannesburg Stock Exchange.
Fortunately for MultiChoice shareholders, only a fraction of the initial demand will probably have to be paid.
Judging from the company’s 7% share price drop, investors are braced for a penalty in the region of $260 million, 94% less than Nigeria is demanding.
Even that might be an overestimate. A $2 billion tax bill levelled against South African mobile phone giant MTN (MTNJ.J) in 2019 came to literally nothing a year later.
And the $8 billion that the central bank demanded from the same telecommunications company for supposedly illegally repatriated dividends became a $53 million wrist slap.
Such missteps hurt the credibility of the Nigerian authorities. Companies and individuals will naturally assume tax bills are either negotiable or avoidable.
Nor does it enhance the credentials of Africa’s most populous nation as an investment destination.
At the height of its dispute, MTN even threatened to pack up and go home. Fear of being randomly targeted may deter foreign companies from setting up shop there in the first place.
That would undermine President Muhammadu Buhari’s efforts to wean the $500 billion economy off oil, historically the source of 90% of foreign exchange and two-thirds of government receipts.
Such bounties mean Nigeria’s leaders never bothered to build an alternative revenue base. Tax receipts, at around 6% of GDP, are among the lowest in the world, with companies bearing an unusually large 50% of that burden. The average in the rest of Africa is 19%.
With global oil demand set to plummet by 2050, Nigeria will have a big gap in its coffers to plug. But randomly targeting companies is short-sighted.
Boosting VAT receipts or adding consumer levies on things like mobile phone airtime may be politically unpopular but will both raise more revenue and be less damaging to Nigeria’s economy.
Recall that Federal Inland Revenue Service said on July 8 it had instructed banks to freeze the accounts of South African pay-television group MultiChoice to recover $4.4 billion in unpaid taxes.
MultiChoice said it had not been formally notified of the freeze and said the case appeared to be based on unfounded allegations about its subscriber base.
The company said it had engaged with the authorities in a constructive manner and hoped to resolve the issue amicably.
Nigeria has launched an emergency response centre after recording 190 deaths from Lassa fever, a viral hemorrhagic illness, according to Nigerian Center for Disease Control (NCDC).
The disease, mainly transmitted to humans via contact with food or household items contaminated with rodent urine or excrement, has infected 1,154 people in six Nigerian states.
Jide Idris, head, Nigerian Center for Disease Control, said the agency’s risk assessment has categorized it as high, prompting the activation of the emergency Operations Centre to manage the outbreak.
“While the disease occurs throughout the year, peak transmission typically happens between October and May, coinciding with the dry season when human exposure to rodents increases,” he said at a press briefing in Abuja.
The centre will ensure seamless coordination of the control and management of the outbreak.
Symptoms of the virus – which can also be passed between people through bodily fluids of those infected – include fever, headaches and, in the most severe cases, death.
The World Health Organization classifies Lassa fever as a priority disease due to its epidemic potential and lack of approved vaccines.
Federal government has proposed to spend N1.5bn for internet services for passengers at five international airports in the country.
The project, “Provision/Upgrade of WiFi Services for Passengers in Five International Airports and some Domestic Airports” was listed as a new project in the 2025 appropriation.
In some parts of the world, access to the internet via Wi-Fi at airports is regarded to be a basic human right.
Such amenities are lacking in Nigeria.
But the 2025 budget presented to the National Assembly last week by President Bola Tinubu saw the sum of N105.953,496,365 being allocated to the Ministry of Aviation.
Apart from internet access at the airports, some other capital allocations were reinstated for the Nigerian Airspace Management Agency (NAMA).
In previous budgets, three agencies of the ministry including the apex regulatory agency, the Nigeria Civil Aviation Authority (NCAA); the Federal Airports Authority of Nigeria (FAAN) and NAMA were exempted from the annual budgetary allocation.
In addition, the federal government deducts 50 per cent of the Internally Generated Revenue (IGR), which is against the standard and recommended practices of the International Civil Aviation Organisation (ICAO), which recommends that the funds generated by the agencies should be reinvested into improving infrastructure and boosting aviation safety.
Fidelis Egueke, former bank manager, , has been convicted and sentenced to six months in prison by an Asaba, Delta State Chief Magistrate’s Court for defrauding a victim of $46,900.
Chief Magistrate Callistus Isioma Moeteke found Egueke guilty of a single charge brought against him by the police under case number CMA/295c/2024.
Raphael Eze, prosecutor, of the State Criminal Investigation Department (SCID), Asaba, said Egueke, a former Asaba branch manager of a tier-one bank, fraudulently obtained $46,900 by using two Certificates of Occupancy (CofOs) as collateral.
One of the land titles, however, was not his, and the other was fake.
After receiving the money, Egueke used it for personal expenses and failed to repay the victim as promised.
The prosecution argued that Egueke’s actions violated Section 419 of the Criminal Code Law, Cap C21, Vol.1 Laws of Delta State, Nigeria, 2006.
Despite denying the offence, Egueke failed to present evidence of repayment during the trial.
Chief Magistrate Moeteke determined that the prosecution had proven its case beyond a reasonable doubt.
Egueke was convicted and sentenced to six months imprisonment.
However, the court also gave him the option to pay a fine of N350,000 in lieu of serving the prison term.
The court ordered Egueke to pay N30 million in restitution to the victim within six months of his conviction.
The charge against Egueke stated that, in 2016, he fraudulently obtained a credit facility worth $46,900 (approximately N60 million) from Chief Jude Ndudi by presenting false documents, including land titles that did not belong to him, in violation of Section 419 of the Criminal Code Law.
Egueke is also facing trial before a Lagos Federal High Court on charges related to a separate fraud case involving N179.498 million.
He is being prosecuted by the Force Criminal Investigation Department (ForceCID), Annex Alagbon-Ikoyi, Lagos.
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