Human rights activist and renowned lawyer, Femi Falana (SAN), has said that Nigeria is the only oil producing country in the world that does not know how much oil she produces.
He also said that the problem of Nigeria is not corruption but that Nigeria is being ruled by ignorant leaders and those characterized by impunity.
Mr. Falana who said that ignorance is part of corruption, however opined that it must be tamed as part of solution to the country’s problems.
Mr. Falana gave the statement at the Socio-Economic Rights and Accountability Project, SERAP’s launch of a roundtable on “How failure of companies to pay tax is fueling povery, underdevelopment and inequality in Nigeria” held in Lagos today.
According to him, although the anti-graft agency- the Economic and Financial Crimes Commission, EFCC, has been recovering pockets of stolen funds here and there, that the federal government should, however, beam her searchlight on Capital Gains Tax to recover the actual lost funds of the country.
According to him, billions of dollars will be recovered if the government directs her anti-graft war to DPR.
He said “Nigeria has lost 60billion dollars by non-implementation of the DPR law.”
He said “Nigeria is the only oil producing country in the world that does not know how much oil she produces.”
He said, this is because the “federal government has refused to acquire the metre to know how much oil the country produces.”
Mr. Falana said part of the problem plaguing the country is poverty of ideas.
He however said that as a way forward, “We must get DPR under FIO act to make available information to recover lost funds.”
“We must try and collect all monies lost and pay to the federation account.
He said “countries are run on tax and we must go back to era of running the country on the basis of tax.”
Earlier, the report presenters, Azeez Alatoye and Bimpe Balogun delivered a report on “The impact of laws and practice on the taxation of capital gains: oil and gas asset sales in Nigeria, 2005 to 2015.”
According to them, the clamour for increase in the Capital Gains Tax (CGT) rate in Nigeria, especially in the oil and gas sector, has become more pronounced as a result of the realization that most international oil companies have divested their seets without commensurate increase in revenue for Nigeria through tax.
They said that no Capital gains Tax was returned from the sale of ConocoPhillipOil Company Nigeria Limited to Oando Hydrocarbon, now Oando Oil Limited, through the acquisition of ConocoPhillips in Canada by Energy Resources Canada in 2014 for 1.5 billion US dollars.
The said that the statutory exemption of sale of shares from the capital gains tax Act Cap C1 Laws of Nigeria, 2004, has made it impossible to collect tax from ConocoPhillips and Addax divestments even though the sale and purchase agreement of Addax transaction is yet finalised.
They said such development leads to loss of revenue from CGT.
They also said that there is little or no communication between the DPR and the Federal Inland Revenue Service, FIRS in ensuring that no revenue is lost through divestment.
They however recommend that the DPR which is the agency that approves the divestments should interact with FIRS on the divesting companies’ tax status before allowing the transaction to be completed and payments made.
The argued that vendor companies that realize the gains from the divestment should be made to bear the tax rather than passing the burden on buyer companies.
The said the Federal Ministry of
Finance should play key role in the whole process of divestment by computing the appropriate CGT to determine its adequacy, and recommend appropriate amendments for legislative changes.
They also recommend that the 30% rate on capital gains realised on disposal being proposed under the National Petroleum Fiscal Policy Proposal (NPFP) as documented should be amended as a rate change in CGT Act for oil and gas sectors.
They said this rate change should be strictly for oil and gas companies alone.
They also said that the CGT Act should be amended and not the 2018 Petroleum Industry Fiscal Bill (PIFB) to achieve the rate change.
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