Following the sack of the Executive Secretary of the Nigerian Investment Promotion Commission (NIPC), Saratu Umar, The Cable is reporting that the NIPC boss was removed because she leaked information of alleged fraudulent tax waivers worth about $20 billion.
According to the reports, Umar was sacked eight days after a letter on the controversial waivers was leaked to the media and six days after the NIPC staff union petitioned President Goodluck Jonathan requesting her sack.The report further claims that at least $20 billion was lost between 2010 and 2014 as a result of tax holidays granted to ‘undeserving companies’ on the recommendation of NIPC.
The said letter, written by Minister of Finance, Ngozi Okonjo-Iweala, was written in August 2014 and addressed to Umar complaining about the indiscriminate granting of waivers.
The letter was published by Thisday on Sunday, May 10, 2015, with The Cable claiming Umar leaked the letter in order to embarrass President Jonathan and court the favour of the President-elect General Muhammadu Buhari.
Following the leak of the letter NIPC staff petition President Jonathan calling for the Umar’s sack of
Parts of the petition signed by Ahmad Ghondi, the Chairman of NIPC union read: “It appears the current Executive Secretary has taken the staff agitation for her removal to a desperate point of dragging the outgoing administration of President Goodluck Jonathan to the mud by whipping up sentiments in the media at this critical time when the Nation is undergoing transition. The leakage of the letter by the Minister of Finance sent directly to the Executive Secretary of NIPC on August 12, 2014 and which has been in her custody, smacks of an act of irresponsibility and immaturity.”
The Cable reports:
NIPC is saddled with promoting investment opportunities in Nigeria, and part of the incentives for investors is tax holiday for which the commission has to issue “pioneer status” certificates.
However, the waivers are to be applied within certain criteria, such as a company investing in a virgin area that needs incentives.
Although Okonjo-Iweala did not give the actual figures of revenue lost through the tax holidays, she said while oil companies were supposed to be taxed 65 per cent under the Petroleum Profit Tax Act, certain officials of NIPC listed such companies under the Industrial Development (Tax Relief) Act, thereby making them qualify for pioneer status.
She said the tax holidays were granted to companies “whose products do not meet the requirements of the list of industries or products specified in the schedule to the Act”.
Unfair advantage The officials of NIPC further breached the rule by backdating the pioneer certificates, forcing the federal government to refund taxes that had already been paid into its coffers by these companies, she said.
A beneficiary of this, according to Okonjo-Iweala, is Seplat, an operator of one of the fields belonging to NNPC. “While SDPC (Shell) disposed of its interest to Seplat, NNPC disposed of its interest to NPDC (Nigerian Petroleum Development Company, being the exploration arm of NNPC).
Seplat, thereafter, was granted a tax holiday whereas NPDC continued to pay taxes from the operation of the same field. This confers an unfair advantage on Seplat,” she wrote.
As many as 15 oil companies are believed to have benefit from the tax holidays despite not being eligible but for the connivance of NIPC officials.
The union staged a protest that led to the paralysis of activities at the headquarters of the agency in Abuja on April 22.
During the protest, its members carried placards with inscriptions such as: ‘NIPC without management/Council’, ‘Saratu Umar must go today’, ‘Self-styled one-man management’, ‘No imprest to zonal office for eight months’.
But Umar denied the allegations, saying some directors of the agency who were indicted for misappropriating NIPC’s funds were behind the protest.
Chairman of RMFAC, Elias Mbam, recently commended Umar for “taking bold steps” that had sanitised the granting of the pioneer status incentives which had hitherto witnessed challenges in its administration that led to huge revenue loss to the federation.
Mbam said import duty waivers, concessions and exemptions “have direct bearing on the quantum of revenue accruals into the Federation Account which gets depleted and consequently affects the share of every tier of government”.
