Tax Corruption!

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Senate may reverse FEC over N60b tax default
From Alifa Daniel, Asst Political Editor, Abuja

A DECISION of the Federal Executive Council (FEC) six days to the close of President Olusegun Obasanjo administration on the penalties charged Ministries, Departments, and Agencies (MDAs) by the Federal Inland Revenue Service (FIRS) for defaulting in tax payments was yesterday rejected by the Senate Committee on Public Accounts because it negated tax laws.

MDAs, including the Central Bank of Nigeria (CBN), are believed to be in payment of N60 billion tax. In the figures before the Senate from the FIRS, the CBN is owing the tax authority N327, 919,645.90 between 2002 and 2005.

A breakdown shows that on Withholding Tax (WHT), the CBN has a default of N251,321,780 and on Value Added Tax (VAT), N26, 576,255 was recorded against the apex bank. Interests on WHT were put at N45,237,920.40, and interest on VAT for the period was N4,783,720.50.

Angered by the preference of the CBN Governor, Prof. Chukwuma Soludo, to head for an appointment in the Aso Rock Presidential Villa, members of the Senate Public Accounts Committee, including its Chairman, Senator Ahmed Lawal, and Bukar Abba Ibrahim, Heineken Lokpobiri, Caleb Zagi, Andrew Babalola sent back a deputy Governor of the CBN and his other officials.

The CBN delegation apologised and promised that Soludo would appear in person on a new date to be communicated to the bank.

But this was not before Senator Babalola criticised the governor of the bank for having a hangover of the years of military dictatorship when they preferred to run to the Villa, even when there was an outstanding appointment with the National Assembly.

Also sent back yesterday were the officials of the Ministries of Education, and Culture and Tourism because their permanent Secretaries did not deem it fit to come to the Senate to explain their tax defaults.

Senator Lawal lashed out at one of the permanent secretaries, who he said was more concerned with attending an event with the First Lady of Kaduna State rather than showing up at the Senate.

"It is unfortunate that the National Assembly is not shown its deserved honour by government officials, and this has got to stop forthwith," he said.

Other agencies that were invited yesterday to show evidence of tax payment were the Federal Ministry of Culture and Tourism (between 1999-2004), N110,153,494.33; Federal Ministry of Education N445,821.42 (1999-2004); Federal Housing Authority (1999-2004), N807,072,370.72; Federal Roads Maintenance Agency (FERMA 2000-2004), N242,621,791.84; Federal Radio Corporation of Nigeria (1999-2004), N21,313,476.13; and Federal Airports Authority of Nigeria, N544,872,183.84.

But for FERMA, represented by its Chief Executive, Olubunmi Peters, it was reserved commendation for paying all the tax default and penalties by last Monday.

The Federal Housing Authority (FHA) Managing Director, Felix Koyenikan, argued that the agency had paid N662 million of its indebtedness to the tax office.

But when it emerged from the FIRS officials that the tax default of the FHA and other MDAs was higher than what was presented to the Senate, but was slashed based on a memo from the Federal Executive Council (FEC), the Senate Committee members said it was inappropriate, adding that it was not the business of government to do so since the taxes were on contracts and staff salaries and were kept by the agencies.

Senator Lawal, Committee Chairman, said: "The forgiven taxes remain unforgiven as far as we are concerned."

He directed the FIRS to forward to the Senate the liabilities of the MDAs before they were forgiven so that the Upper House could ensure that the right thing was done.

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Did anyone note the lastest corruption method just discovered by the Senate as shown above?

It goes like this. Ministry budgets salary, taxes are witheld from salaries, the taxes evaporate to Oga's private account, Oga settles El Rufai who in turn forgives the taxes and Ribadu looks away! Nigeria we hail thee!

P.S: The Senate must be commended for the thorough job that is being done on this year's budget. Those secrets account being discovered is enough. The FG is such a mess and EFCC says no one was corrupt. Either Ribadu is blind, or our senators are senile.