N’Delta Crisis: FG Plans New Taxes
From Michael Olugbode in Maiduguri, 08.29.2007
To make up for the shortfall in oil revenue as a result of the crisis in the Niger Delta, the federal government is planning to introduce a new tax regime.
Speaking at the opening ceremony of the 117th edition of the Joint Tax Board meeting in Maiduguri, Borno State, yesterday, Ms. Ifueko Omoigui, the Executive Chairman, Federal Inland Revenue Service (FIRS) and Chairman, Joint Tax Force, said Nigerians would have to carry an “extra burden” to meet the shortfall in the nation’s revenue profile.
It is estimated that Nigeria loses 600,000 barrels of oil daily owing to the crisis which has led to the closure of 25 percent of the oil fields in the country.
Last year alone, Nigeria lost about $4.5 billion in revenue as a result of the shut-downs.
Ms Omoigui said “events in the Niger Delta, which the President is resolute in addressing, bring home the urgent need to diversify our revenue base away from dependence on oil revenues.”
She lamented that the hostilities in the oil rich Niger Delta region “immensely” affected the 2007 budget, which was based on $40 benchmark oil price.
The actual oil price as a result of the withdrawals from the domestic excess crude oil account to augment budget shortfalls hovered at about $63.80 oil price mark as at July this year, she disclosed.
She expressed worries that “there have been little or no accruals to the domestic crude account this year, which in prior years was used as a saving buffer,” and asked: “What if we did not have oil prices that high? Can we continue to depend on high oil prices? How do we achieve sustainable development without a serious look at how to raise tax revenues?”
She therefore said the nation has to grow tax collections in non-oil sectors to arrest this ugly situation before it gets out of hand.
“Apart from the fight against corruption which must be deepened and sustained, as it eats into the funding that could otherwise have been available for development through such scheme as over-pricing and diversion of monies met for the state to private pockets, another source of sustainable development funding is to deepen our focus on making taxation the pivot of national development,” she said.
This, she said, could be achieved through a relentless focus on making tax authorities at federal and state levels institutions of excellence, stressing that taxation provides a reliable option which is not exhaustible as it is derived from the individual and corporate citizens and, if well managed, guarantees an ever increasing yield.
She, however, decried the situation where tax consultants take over the primary responsibilities of tax officers by assessing, collecting and accounting of taxes. She described their activities as not only illegal but “a leakage to tax funds which normally should have accrued to the government”.
The federal chief tax officer appealed to all tiers of government to resist the temptation of double taxation, stressing that it is a major disincentive to investment and also inimical to the growth of the economy.
Governor Ali Modu Sheriff of Borno State, while declaring the occasion open, said most of his colleagues employed the services of tax consultants due to inefficiency of the tax administration, which has contributed immensely to depletion of revenue of states.
Though he admitted that he has not employed the service of tax consultants, Sheriff said “most of my colleagues do not want to employ the services of tax consultants in tax matters but would like to depend on their staff, but because of the ineffectiveness in the discharge of their duties they were compelled give the job out to tax consultants.”
The governor, however, urged the chairmen of all the State Internal Revenue Boards to come out with proposals on how to effectively collect revenues, stressing that “I am sure that they can do it if they are given necessary support and machinery to work with.”
