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Only 40 Super-rich Nigerians Pay Correct tax — Govt Report



Nigeria tax revenue
  • Only 40 Super-rich Nigerians Pay Correct Tax

Only 40 super -rich Nigerians pay correct tax on their income, a government report commissioned by the Federal Inland Revenue Service and the Joint Tax Board has found.

A very reliable source in government said during the week that the report was prepared from tax data collected from the 36 states of the federation and Abuja.

The source, a senior public servant, said the findings of the FIRS would influence the fashioning of a new tax amnesty programme to be launched by the Federal Government later this year. Additional findings also revealed that government would soon go after super-rich tax defaulters whose lavish lifestyles do not correlate with the small taxes that they pay annually.

A senior government official told our correspondent during the week that “in the process of tracing stolen funds, it has become apparent that a significant number of Nigerians have assets and fund lifestyles that are not consistent with their income as declared on their tax returns.

“With the assistance of international asset tracing professionals, the government has already identified that the number of potential tax defaulters is significant.”

The tax report entitled, ‘List of individual taxpayers that paid N10m and above in 2016’, was prepared on January 24, 2017. The document, which was commissioned to examine the tax compliance of Nigerians who are “High Net-Worth Individuals,” was obtained during the week.

For the purpose of the exercise, HNIs were defined as Nigerians who must have paid direct assessment tax of at least N10m in 2016 and, thus, were assumed to have made at least N40m and above in income in the same year.

The source said the main implication of the report was that most of the country’s rich and super-rich do not pay correct tax.

“Of course, there are more than 40 people who earn more than N40m in Nigeria in 2016. The rich are not paying. It is the reason tax is just six per cent of our GDP,” the source said.

The report shows that the 40 individuals, who paid at least N10m tax in 2016, paid a total of N1,028,715,362.45 (one billion, twenty-eight million, seven hundred and fifteen thousand, three hundred and sixty-two naira and forty-five kobo). According to the report, all the 40 individuals paid tax in Lagos, an indication that the other 35 states and Abuja have no individuals who had an income of N40m and above in 2016.

“Most HNIs are playing games with the system. They pay tax only on their salaries, which is just a fraction of their income and hide the rest. Where are all the big names that make hundreds of millions and billions every year?” the source asked.

The document was silent on the total number of Nigerians paying tax. It also did not project the number of super rich Nigerians who are expected to pay tax.

The chairman of the JTB, Mr. Tunde Fowler, recently gave the total number of Nigerians paying tax as 13.4million. Fowler spoke at the 136th meeting of the JTB in Abuja where he also revealed that 3,414,496 million new taxpayers were added to the national tax register under six months. The JTB has said that it plans to increase the number of individual taxpayers to 20 million by December 2016.

Also, the tax authorities have always said that the consumption pattern of Nigeria’s super rich and the volume of trade in luxury show that there are thousands of high-income earners who understate their income. For example, an exclusive report published by The PUNCH says the number of private jets in the country rose from 20 to over 150. The report further says that each of the private jet acquired within the period was bought for about $50 million on the average.

A senior tax official, who spoke on condition of anonymity, expressed concerns about the implication of the report. The official said, “Nigeria’s low tax revenues are at variance with the lifestyles of a large number of its people and with the value of assets known to be owned by Nigerian residents around the world. There has been a systemic breakdown of compliance with the tax system with various strategies used to evade tax obligations.

“These HNIs transfer assets overseas. They use offshore companies in tax havens to secure assets and they register assets in nominee’s names. The information obtained on some citizens suggests clearly that the funds they used to purchase overseas assets far exceeded the income declared in the tax returns, rendering such returns false and creating a tax liability.”

Figures from the Federal Inland Revenue Service show that the total number of taxpayers in Nigeria is just 12.5million. Of these, 96 per cent have their taxes deducted at source under PAYE and just 4 per cent comply with Direct Assessment. Nigeria’s tax to GDP ratio is 6 per cent and one of the lowest in the world. South Africa’s tax to GDP ratio is 27 per cent while Ghana’s is 15.9 per cent. Most developed nations have between 32 per cent to 35 per cent tax to GDP ratio.

Meanwhile, the Federal Government is poised to launch a major tax drive to compel super-rich Nigerians to pay correct tax. Multiple sources in government told our correspondent that the new initiative would include a tax amnesty and a revitalised enforcement drive.

A government document sighted by our reporter described the new initiative tentatively as “The Nigerian National Tax Amnesty Programme.’

The source said, “This would reduce the amount that government would have had to borrow for essential projects and would enable Nigeria to make a concerted effort to upgrade essential infrastructure and spur development.

“It is a time-limited opportunity for taxpayers who are in default with their Nigerian tax liabilities to pay the tax due from them relating to previous tax periods. This enables them to regularise their transactions and get Nigerian tax clearance for all the relevant years without fear of criminal prosecution and with the benefit of forgiveness of interest and penalties.”

The Buhari administration had entered into Automatic Exchange of Information agreements with some countries where rich Nigerians have assets in cash, property and other items of value. Some of the countries are United States of America, Canada, United Arab Emirates, United Kingdom, Switzerland and others. The governments of these countries are expected to supply information on the holdings of Nigerians in these countries so that these Nigerians would be properly taxed.

A source privy to the details of this new initiative said, “These agreements will come into force in 2018 and mean that Nigeria will have access to information about the ownership of overseas assets by Nigerians. This information, together with local information, can be compared to tax payment records to identify underpayment of taxes and to support the criminal prosecution of tax evaders.”

When the source was told that Nigerians might view the amnesty as a means of escape for highly connected and rich Nigerians, the source said this was not the case.

The source said, “Even though ignorance of the law is not an excuse, government has decided to take the pragmatic approach of offering an amnesty window to allow Nigerians, who may have evaded tax, whether ignorantly or deliberately, the opportunity to do their civic duty and pay the correct taxes whilst providing much needed revenue for Nigeria’s infrastructure.

“Upon expiration of the amnesty programme, government will concentrate criminal prosecution efforts on those who have evaded taxes and yet failed to take advantage of the amnesty.

“A number of countries, including Indonesia, Italy and Argentina, who have seen their tax revenues illegally, moved to other nations have undertaken similar programmes to fund their national development.”

It was further gathered that the grace period allowed by an FIRS tax amnesty for waiver of interest and penalties would have lapsed by the time the amnesty programme commences.

“The Amnesty Programme is more comprehensive in terms of taxes and time frame. The commitments made by the FIRS during the programme will be respected save for discovery of new facts, non-disclosure and partial disclosure,” the source said.

The amnesty, according to sources, will last for a year and will not be renewed or extended.

“Once the amnesty period has expired, all the remaining tax defaulters who have not taken advantage of it will face the full force of the law,” the source said.

When contacted, The Head , Communications and Liaisons Department, Federal Inland Revenue Service, Mr. Wahab Gbadamosi, denied knowledge of the report. He said, “I am not in a position to respond to this because it is not plausible. We have more than 300 millionaires in Nigeria and it is not possible that it is only 40 of them (that are) paying correct tax.”

A tax expert, Mr. Dennis Afuberoh, told our correspondent that the poor pay more taxes than the rich because the latter evaded taxes with the aid of their highly-placed friends.

“That was one of the findings I made when I did a research. This is why President Muhammadu Buhari’s government has come out with a policy that places special tax on luxury cars. This is to ensure that even when the big men evade tax in other areas , they can’t do the same when they buy luxury cars which they like to ride.”

An activist, Debo Adeniran, also said the rich had perfected ways of evading taxes. According to him, the poor deserve tax rebates more than the wealthy.

“The poor do not have an escape route. Most of them are the civil servants, lowly-placed workers whose taxes are deducted from the source. Even traders who eke out a living hawking on the streets pay taxes to the local governments on a daily basis.

“The government is simply reluctant to correct this anomaly because they know how to assess taxes of these big industrialists and businessmen. They also have the capacity to audit their books and records.

“Low-income earners, whose salaries cannot shoulder their responsibilities should be given tax holidays or rebate. The poor are not being encouraged to survive within their means because the government is not giving them the necessary support.”

Another activist, Amitolu Shittu, said if tax criminals were allowed to go scot free, the economy would continue to bleed because money from tax is meant to be used to develop the nation.

He said, “My annual tax is N39,800 when ordinarily I should not pay more than N4,000. I don’t think anyone has been convicted for withholding tax. There are lots of multinationals, footballers and the rich who don’t pay tax. Only government workers and a few others pay tax monthly because that is where you get tax in bulk.”

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


Econet Group and Mastercard To Collaborate on Fintech Solutions For Covid-19 Response in Africa




The Econet Group through its subsidiary Cassava Fintech International (Cassava Fintech) and Mastercard have entered into a strategic partnership to advance digital inclusion across Africa and collaborate on a range of initiatives including expansion of the Africa CDC TravelPass.

TravelPass is a digital health pass developed by Cassava Fintech and offered in conjunction with the Africa Centres for Disease Control and Prevention (Africa CDC). It is accessible to users of Cassava Fintech’s Sasai SuperApp and is recognised as one of the leading initiatives in the fight against the cross-border spread of Covid-19 in Africa. Mastercard is partnering with Cassava Fintech to enhance the security of TravelPass through Mastercard’s Community Pass platform. Mastercard Community Pass is an interoperable digital platform facilitating service delivery for marginalised individuals and communities, including access to critical health services like patient care plan tracking for Covid-19.

The joint initiative between Mastercard and Cassava Fintech seeks to offer a unified solution with greater convenience and enhanced security, that is expected to promote safe cross border travel in Africa in response to the Covid-19 pandemic.

The partnership will also allow the two organizations to explore collaboration such as the further integration of the Community Pass with Cassava Fintech’s mobile and financial services, acquiring and processing of card payments across the continent, along with the introduction of a virtual or physical card on the Sasai SuperApp.

Cassava Fintech’s CEO, Darlington Mandivenga said the partnership with Mastercard would pave the way for both companies to jointly tackle the challenges facing African economies as they re-open post the COVID-19 pandemic.

“We are excited to work with Mastercard to explore solutions that will, among other things, mitigate the risk of falsified presentation of a third party’s Travel Pass at access and transit points,” Mandivenga said, adding that the same technology could also be used in payment solutions.

Cassava Fintech uses an integrated model to provide financial and digital services to ensure a “financially inclusive future that leaves no African behind”.

“We look forward to joining hands with Cassava Fintech in exploring new solutions that will make a difference and benefit the continent. In addition to digital innovation for future travel, Cassava will also leverage our secure payments network to advance access to financial services,” said Mark Elliott, Divisional President, Southern Africa, Mastercard.

Mastercard is a leading global technology company focused on building an inclusive, sustainable digital economy that benefits everyone, everywhere, by making transactions safe, simple, smart and accessible.

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Nestlé Health Science to Acquire Nuun




Nestlé Health Science and Nuun, a leader in functional hydration, have entered into an agreement in which Nestlé Health Science will acquire Nuun.

The acquisition complements Nestlé Health Science’s existing broad portfolio of active lifestyle nutrition brands with Nuun’s range of clean, low-sugar, effervescent tablets and powders.

“Every day, health-conscious consumers are becoming more aware of how functional hydration products can add to their overall well-being as well as support them during exercise by replacing the minerals that the body loses. That growing awareness is reflected in the steady growth of the category,” said Greg Behar, CEO of Nestlé Health Science. “Nuun is a leader in the fast-growing functional hydration category with its high-quality, clean, plant-based products. We look forward to combining our companies’ expertise to bring Nuun to more people around the world.”

Nuun was founded in Seattle, Washington in 2004, pioneering the separation of electrolyte replacement from carbohydrates. Its low-sugar electrolyte tablet revolutionized the sports beverage market. It now has a broad range of effervescent tablets and powders containing additional minerals and vitamins for energy, relaxation and overall well-being.

“Nestlé Health Science and Nuun share the same philosophy: nothing is more important than health and well-being,” said Kevin Rutherford, CEO of Nuun. “In joining Nestlé Health Science, Nuun will further its mission of ‘hydration that empowers the world to move more.’ The Nuun team has built an incredible business and now with the reach, expertise and capabilities of Nestlé, I’m confident that together we will grow, even more, making people and the planet healthier.”

The transaction is expected to close in Q3 2021. Financial details are not being disclosed.

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itel Partners Amatem and Drug-Aid Distributes Relief Materials In Fight Against Malaria



itel Malaria Day

To commemorate this year’s World Malaria Day, itel recently partnered with Amatem Softgel, an anti-malaria drug in Nigeria, and Drug-Aid Africa, a non-governmental organisation (NGO) that provides medical drug supplies and support to low-income patients in Nigeria and across Africa.

A statement by itel explained that in tandem with the theme of this year’s World Malaria Day, ‘Zero Malaria Starts with Me’, the three brands joined the global fight against malaria by donating treated mosquito nets, free medical tests, mosquito repellent cream and free anti-malaria drugs to over 1,500 households in Isale-Akoka Community, Bariga, Lagos state.

It explained that malaria is a prevalent disease in sub-Saharan Africa, and was responsible for thousands of deaths yearly, adding that as socially responsible organisations, itel, Amatem Softgel, and Drug-Aid Africa, “believe that they have a quota to contribute in ensuring a relatively healthier society.”

The Marketing Manager for West Africa and Nigeria, itel, Oke Umurhohwo, expressed commitment in bridging the gap in low-income communities through its ‘Love Always On CSR initiative.’

He added that the brand was partnering with Amatem Softgel and Drug Aid Africa to provide these communities, “with an even greater fighting chance against malaria is a part of our commitment to them.”

The General Manager, Elbe Pharma, Shivakumar, said: “Malaria is a life-threatening disease, but it is preventable and curable. We at Elbe continue to find a better way to combat this disease, support the vulnerable ones especially the young children. Hence, the introduction of this innovative anti-malaria brand AMATEM SOFTGEL and this CSR partnership.”

The Programme Officer, Drug-Aid Africa, Oluseyi Sanyaolu, said malaria has been ravaging the vulnerable in the society for years, saying, “it is the reasons why Drug-Aid Africa is dedicated to supporting those in indigent communities with medicines and medical supplies. Together, we can end this menace.”

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