Economy

NERC Faults Power Distributors’ Estimated Billing

Published

5 years ago

March 18, 2019

NERC Faults Power Distributors’ Estimated Billing

Electricity distribution companies have not effectively implemented the methodology for estimated billing issued by the Nigerian Electricity Regulatory Commission, the regulator has said.

The Chairman/Chief Executive Officer, NERC, Prof James Momoh, who described the methodology as a scientific method to estimate electricity consumption, said it was aimed at bringing fairness to customers who had no meters.

According to him, the provisions of the methodology require that all distribution transformers are metered so as to have a scientific means of deducting the consumption of customers who have meters from the distribution transformer meter and then share what is left appropriately to customers who have no meters.

“The Discos failed to do distribution transformer metering, which the methodology was heavily dependent on for fairness, hence the source of inaccuracy in estimated billing,” Momoh said in the January edition of NERC’s newsletter obtained by our correspondent on Sunday.

He, however, said the commission had maintained the implementation of the methodology of estimated billing and had, in some instances, sanctioned some Discos for overbilling.

According to Momoh, the Regulation on Meter Reading, Cash Collections and Credit Management (2007) states that estimated billing shall only occur where a distribution company is unable to obtain a meter reading at a customer’s premises.

He said, “It is expected that where a consumer is billed an unrealistic amount or crazy bill, he/she should pay the last estimated bill that he/she is comfortable with and then make a formal complaint to the consumer complaints office of the Disco.

“This complaint is expected to be resolved within 15 days. Where this is not done or the customer is unsatisfied with the resolution by the Disco, they may escalate the matter to the NERC forum office.”

Momoh said since the privatisation of the power sector, there had been a constant decline in the provision of meters to existing customers by the Discos while new customers had been added steadily to their networks, contributing to a significant metering gap.

He said investigations by the commission revealed that a total number of 5,172,979 electricity customers were registered as of May 2012, but only 2,893,701 had meters.

He noted that the Discos signed performance agreements with the Bureau for Public Enterprises in 2013, with the provision of 1,640,000 meters expected annually over the next five years.

The NERC boss, however, said the Discos failed to abide by the performance agreement terms and also failed to effectively meter customers under the Credit Advance Payment for Metering Initiative.

“This setback meant that by December 2018, the number of customers had risen to 8,342,880 with 3,558,692 metered and a total of 4,784,188 unmetered and billed on estimates,” Momoh added.

He noted that the Discos had lamented at various times that the tariff granted by virtue of the MYTO 2015 Order remained insufficient for them to carry out the required investments in electricity infrastructure, comprising metering, network clean-up, customer enumeration and improvement to network assets.

Commenting on the metering scheme introduced by the regulator last year, he said, “The commission is currently reviewing the procurement process in the Discos, having appointed tender auditors to audit the Discos and ensure that the Meter Asset Providers appointed are the outcome of a transparent, cost-effective process that will guarantee Nigerians best price of qualitative meters.

“The commission is presently reviewing all submissions by Discos on the procurement of their MAPs. The MAPs will work with the Discos to ensure that the metering gap is closed.”

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Samed Olukoya

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

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Economy

FIRS VAT Revenue Surges to N1.56 Trillion in Q2 2024 Amid Economic Struggles

Published

2 days ago

September 10, 2024

Samed Olukoya

The Federal Inland Revenue Service (FIRS) generated N1.56 trillion in Value Added Tax (VAT) in the second quarter (Q2) of 2024, according to the latest report from the National Bureau of Statistics (NBS).

This represents an increase of 9.11% compared to the N1.43 trillion reported in the first quarter of 2024.

A breakdown of the report showed that local VAT payments accounted for N792.58 billion of the total amount generated, while foreign VAT payments stood at N395.74 billion, and import VAT contributed N372.95 billion.

A quarterly analysis of the report revealed that human health and social work activities recorded the highest growth rate with 98.44%. This was followed by agriculture, forestry, and fishing with 70.26%, and water supply, sewerage, waste management, and remediation activities with 59.75%.

On the other hand, activities of households as employers and undifferentiated goods- and services-producing activities of households for own use had the lowest growth rate with –46.84%, followed by real estate activities with –42.59%.

Sectoral analysis showed that the manufacturing sector contributed the most at 11.78%. Information and communication and mining and quarrying contributed 9.02% and 8.79%, respectively.

Nevertheless, activities of households as employers and undifferentiated goods- and services-producing activities of households for own use recorded the least share with 0.00%, followed by activities of extraterritorial organizations and bodies with 0.01%, and water supply, sewerage, waste management, and remediation activities and real estate services with 0.04% each.

On a year-on-year basis, VAT collections grew by 99.82% from Q2 2023 despite ongoing economic challenges.

Nigeria’s inflation rate remains well above 30 percent, while new job creation is almost nonexistent.

Other key economic factors, such as investor sentiment, the purchasing managers’ index, and consumer spending, remain weak amid intermittent protests by citizens demanding improvements in quality of life.

Economy

Nigeria Sees 9.11% Increase in VAT Revenue, Generating N1.56 Trillion in Q2 2024

Published

3 days ago

September 9, 2024

Investors King

The federal government in the second quarter of 2024 generated a total of N1.56 trillion from Value Added Tax. This is a 9.11 percent increase from the N1.43 trillion in Q1 2024.

According to the National Bureau of Statistics report, local payments recorded were N792.58 billion, foreign VAT payments were N395.74 billion, while import VAT contributed N372.95 billion in Q2 2024.

“On a quarter-on-quarter basis, human health and social work activities recorded the highest growth rate with 98.44%, followed by agriculture, forestry and fishing with 70.26%, and water supply, sewerage, waste management and remediation activities with 59.75%,” NBS reported.

“On the other hand, activities of households as employers, undifferentiated goods and services producing activities of households for own use had the lowest growth rate with 46.84%, followed by Real estate activities with 42.59%.

“In terms of sectoral contributions, the top three largest shares in Q2 2024 were
manufacturing with 11.78%; information and communication with 9.02%; and Mining and quarrying with 8.79%.

“Nevertheless, activities of households as employers, undifferentiated goods- and services-producing activities of households for own use recorded the least share with 0.00%, followed by activities of extraterritorial organisations and bodies with 0.01%; and Water supply, sewerage, waste management and remediation activities with and real estate services 0.04% each.

“However, on a year-on-year basis, VAT collections in Q2 2024 increased by 99.82% from Q2 2023.”

Economy

Finance Minister Denies VAT Hike, Confirms Rate Remains at 7.5%

Published

3 days ago

September 9, 2024

Investors King

Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, on Monday, debunked reports doing the rounds that the rate for Value-Added Tax (VAT) has been upwardly adjusted to 10% from 7.5%.

The Minister, in a statement signed by him, affirmed that VAT rate as contained in relevant tax laws and chargeable on goods and services remains 7.5%.

“The current VAT rate is 7.5% and this is what government is charging on a spectrum of goods and services to which the tax is applicable. Therefore, neither the Federal Government nor any of its agencies will act contrary to what our laws stipulate.

“The tax system stands on a tripod, namely tax policy, tax laws and tax administration. All the three must combine well to give us a sound system that gives vitality to the fiscal position of government.

“Our focus as a government is to use fiscal policy in a manner that promotes and enhances strong and sustainable economic growth, reduces poverty as well as makes businesses to flourish.

“The imputation in some media reports on the issue of VAT and the opinion articles that have sprouted from them seem to wrongly convey the impression that government is out to make life difficult for Nigerians. That is not correct. If anything, the Federal Government has, through its policies, demonstrated that it is committed to creating a congenial environment for businesses to thrive.

“In fact, it is on record that the Federal Government, as part of efforts to bring relief to Nigerians and businesses, recently ordered the stoppage of import duties, tariffs and taxes on rice, wheat, beans and other food items.

“For emphasis, as of today, VAT remains 7.5% and that is what will be charged on all the goods and services that are VAT-able,” Edun said