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Nigeria Loses N571bn Annually to Tax Waivers – Report

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Internal revenue

About $2.9bn (N571bn) is being lost annually by the Federal Government to tax incentives given to some companies operating in the oil and gas sector under the Nigerian Liquefied Natural Gas consortium.

The figure was released by ActionAid Nigeria on Tuesday in Abuja during the launch of its report entitled: ‘Leaking revenue: How a big tax break to European gas companies has cost Nigeria billions’.

ActionAid Nigeria listed the companies to include Shell, Total and ENI, adding that the tax exemptions were for their investments in the NLNG Limited.

The NLNG is a joint venture between the Nigerian National Petroleum Corporation, Royal Dutch Shell, Total and Eni to exploit Nigeria’s huge reserves of gas.

It is the country’s major company in the liquefied gas sector and the three European companies hold 51 per cent stake in it, leaving the balance of 49 per cent to the NNPC.

The Country Director, ActionAid Nigeria, Ojobo Atuluku, said the amount being lost to tax incentives to the companies was capable of funding some key programmes in the country’s budget such as provision of health centres and schools, among others.

She said, “ActionAid researches from 2013 show that the tax incentives cost developing countries at least $138bn every year, part of which is an estimated amount of $2.9bn, or a whopping N577bn that Nigeria forfeits every year as a result of tax incentives.

“That amount is the equivalent of twice our national education budget and thrice the health care budget for 2015. This calls for serious concern in a country where over 20 million children do not go to school and almost 15 out of 100 children die before their fifth birthday.”

“There are incontrovertible evidence from researches conducted in many developing nations that corporate profits are soaring and corporate investments in low income countries had tripled since the 1980s. Yet, the corporate tax revenues of the countries where these profits are generated have flat-lined as a percentage of their Gross Domestic Product.”

She said there was a need for the Federal Government to review the tax incentives offered to companies operating in the country.

“ActionAid and their partners on the Tax Justice Platform want Nigeria and other resource rich developing countries to begin to review their tax incentive policies,” Atuluku added.

In his address, a member of the House of Representatives, Herman Hembe, said there was a need for the National Assembly to exercise caution in considering the proposed amendments to the Corporate Income Tax Act.

The amendment seeks to extend the granting of pioneer status to companies from five to 10 years.

This, according to him, may not be in the best interest of the country at a time when it was in need of more revenue owing to the decline in oil prices.

The NLNG, however, in a statement refuted the claims that the tax breaks were free, stressing that it was something that was obtainable in other countries.

It said, “The NLNG wishes to state that this claim is false and misleading. It is most instructive to note also that ActionAid itself admits in its report that its figure is a ‘hypothetical’ one.

“Contrary to ActionAid’s claim, the reality is that the Federal Government’s initial investment of $2.5bn, bolstered by the associated tax incentives, has so far yielded over $33bn in the form of dividends, taxes and feed gas purchases for the country over the past 16 years, with an additional $5bn accruing through corporate spend on local goods and services during the same period.

“The company paid $3.6bn in Company Income Tax and Education Tax between 2014 and 2015. This is in line with the NLNG’s corporate vision to help build a better Nigeria.”

It, however, admitted that it was granted a 10-year tax holiday, stressing that this was also obtainable in other countries.

The firm stated, “Considering the pioneering nature of such a company in Nigeria as well as the huge investments required, running to several billions of dollars in foreign investments, the NLNG was granted a 10-year tax holiday by the government of the Federal Republic of Nigeria under the provisions of the Nigeria LNG (Fiscal Incentives, Guarantees and Assurances) Act, CAP. N87, Laws of the Federation of Nigeria, 2004 (‘NLNG Act’).

“The concept of tax holidays is not an unusual practice in the global business community. Indeed, Angola has notably offered as much as 12 years’ tax holidays to encourage investments in their LNG industry, while other countries like Oman, Malaysia, Qatar and Trinidad have offered up to 10-year tax holiday to attract LNG investments.”

Punch

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Government

2023 Voter’s Registration Will Be Online, Biometric To Be Captured Physically- INEC

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INEC-PVC

The Independent National Electoral Commission (INEC) yesterday unfolded plans to allow online filing during the continuous voter registration for the 2023 general election.

The National Commissioner and Chairman, Information and Voter Education Committee of INEC, Mr. Festus Okoye, however, said only the biometric would be captured physically by INEC officials.

But the commission suffered another setback yesterday as arsonists torched its office in Ohafia Local Government Area of Abia State.

Okoye, during a stakeholders’ meeting on expanding voter access to polling units in Kano yesterday, said: “On June 28, the voter registration exercise for those above 18 years and those who have not registered before will commence with two new innovations. Those versatile with computer can register online and only visit a registration centre to capture their biometrics.”

Okoye stated that the online registration would be introduced to reduce crowd at registration centres in line with COVID-19 protocols.

The commission called on citizens, especially those willing to contest elections, whose voter cards have been defaced, whose names were wrongly spelt or addresses and locations wrongly captured to present themselves for authentication or correction.

INEC also called for valid data of all those with disabilities or physical challenges to be captured during the continuous registration for proper projections ahead of the 2023 general election.

INEC also warned political parties and politicians who have started campaigning to desist from doing so.

Okoye said: “There is a ban on political campaigns which has not been lifted yet. And I find it necessary to draw your attention for you to understand the legal implication of violating this ban.

“I have listened to comments on radio stations, which are capable of heating the polity. Media organisations should avoid providing platforms for such comments. The media should try to curtail such tensions.

“Political parties, politicians and their supporters should understand there is a legal framework for campaigns and it has not commenced yet.”

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No Plans To Relocate AFRICOM HQ To Nigeria Or Any Part Of Africa- U.S. Replies Buhari

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AFRICOM HQ

The United States has said there is no plan to relocate its Africa Command from its current base in Germany to Nigeria or any other part of Africa despite the worsening state of insecurity in the region.

The US gave the response barely two weeks after President Muhammadu Buhari appealed to the US government to consider relocating AFRICOM to Africa to assist Nigeria and other adjoining countries to combat worsening terrorism, banditry and other security crises.

The President made the plea in a virtual meeting with the US Secretary of State, Antony Blinken, on April 27.

Germany-based Africa Command (AFRICOM) is the US military headquarters that oversees its operations in Africa.

Buhari’s request followed a series of recent military casualties in Nigeria’s decade-long fight against Boko Haram terrorists, fresh expansion of the insurgents’ bases to Niger and Nasarawa States, and heavy waves of abductions and killings by bandits in the North.

Buhari said, “The security challenges in Nigeria remain of great concern to us and impacted more negatively, by existing complex negative pressures in the Sahel, Central and West Africa, as well as the Lake Chad Region.

“Compounded as the situation remains, Nigeria and her security forces remain resolutely committed to containing them and addressing their root causes.

“The support of important and strategic partners like the United States cannot be overstated as the consequences of insecurity will affect all nations, hence the imperative for concerted cooperation and collaboration of all nations to overcome these challenges.

“In this connection, and considering the growing security challenges in West and Central Africa, Gulf of Guinea, Lake Chad region and the Sahel, weighing heavily on Africa, it underscores the need for the United States to consider relocating AFRICOM headquarters from Stuttgart, Germany to Africa and near the Theatre of Operation.”

However, the US government on Thursday ruled out any plan to relocate AFRICOM from its current base in Germany to Nigeria or any part of Africa.

According to the United States Department of Defence’ Pentagon, previous studies have shown that the cost of relocating AFRICOM from Germany to Africa is very huge.

In an emailed response to The PUNCH, the Pentagon said although it would continue to value Nigeria and other countries in Africa as important partners, the American government would not consider relocating AFRICOM to any part of the African continent at the moment.

This newspaper had asked if the US would consider Nigeria’s request to relocate AFRICOM to the continent.

“It would be inappropriate to speculate on any future actions. However, at this time, moving this headquarters (AFRICOM HQ) to Africa is not part of any plans, but USAFRICOM’s commitment to their mission, our African and other partners, remains as strong today as when we launched this command more than a decade ago,” US Pentagon spokesperson, Ms. Cindi King, said.

King also ruled out any plan to consider Buhari’s request in an ongoing global US defence review.

She said, “Although there is an ongoing Global Posture Review, the relocation of Combatant Command headquarters is outside the scope of its assessment. In the case of AFRICOM, previous studies have concluded that the cost associated with the relocation of this headquarters is significant and likely to incur the expense of other engagement opportunities and activities that more directly benefit our valued African partners.

“We greatly value the partnership with Nigeria and appreciate President Buhari’s recognition of the United States’ positive contribution to African peace and security, as well as other regional partners that have made similar past pronouncements. The United States remains committed to continuing our close partnership with African countries and organisations to promote security and stability.”

It’s ‘near impossible’ for America to accept Buhari’s invitation –Campbell, ex-US ambassador

Meanwhile, a former United States Ambassador to Nigeria, John Campbell, has listed reasons why it is “unlikely or near impossible” for the US government to relocate AFRICOM from Stuttgart in Germany to Nigeria or any part of the continent.

He said aside from the fact that the cost of doing so is very huge, the Nigerian military had proved to be a difficult partner for the US over the years.

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China Urges U.N. States Not to Attend Xinjiang Event Next Week

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China - Investors King

China has urged United Nations member states not to attend an event planned next week by Germany, the United States and Britain on the repression of Uyghur Muslims and other minorities in Xinjiang, according to a note seen by Reuters on Friday.

“It is a politically-motivated event,” China’s U.N. mission wrote in the note, dated Thursday. “We request your mission NOT to participate in this anti-China event.”

China charged that the organizers of the event, which also include several other European states along with Australia and Canada, use “human rights issues as a political tool to interfere in China’s internal affairs like Xinjiang, to create division and turbulence and disrupt China’s development.”

“They are obsessed with provoking confrontation with China,” the note said, adding that “the provocative event can only lead to more confrontation.”

The Chinese mission to the United Nations did not immediately respond to a request for comment.

The ambassadors of the United States, Germany and Britain are due to address the virtual U.N. event on Wednesday, along with Human Rights Watch Executive Director Ken Roth and Amnesty International Secretary General Agnes Callamard.

The aim of the event is to “discuss how the U.N. system, member states and civil society can support and advocate for the human rights of members of ethnic Turkic communities in Xinjiang,” according to an invitation.

Western states and rights groups have accused authorities in Xinjiang of detaining and torturing Uyghurs in camps, which the United States has described as genocide. In January, Washington banned the import of cotton and tomato products from Xinjiang over allegations of forced labor.

Beijing denies the accusations and describes the camps as vocational training centers to combat religious extremism.

“Beijing has been trying for years to bully governments into silence but that strategy has failed miserably, as more and states step forward to voice horror and revulsion at China’s crimes against Uyghurs and other Turkic Muslims,” Human Rights Watch U.N. director Louis Charbonneau said on Friday.

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