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Despite Revenue Shortfall, Federal Government Waives Over N16 Trillion as Tax Relief For Dangote, Honeywell and Others

The Federal Government granted tax relief to a tune of N16 trillion between 2019 and 2021

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Naira Exchange Rates - Investors King

Amid the overwhelming revenue challenges, the Federal Government granted tax relief to a tune of N16 trillion between 2019 and 2021. 

Investors King learnt that at the end of 2022, up to 46 companies had benefitted from various tax incentives and duty waiver schemes while the requests of 186 companies were still pending.

Information about the tax relief was contained in the Tax Expenditure Statement (TES) released by the Budget Office of the Federation.

Most of these tax incentives were administered via Company Income Tax (CIT), Value Added Tax (VAT), Petroleum Production Tax (PPT) and Customs Duty. 

It could be noted that five countries accounted for about 86 percent of the custom relief. 

It is not surprising that China accounted for nearly two third of the total relief that was granted. Both Nigeria and China have good trade relations. Investors King earlier reported that trade volume between both countries has increased by 157 percent to N1.49 trillion in the first half (H1) of 2022.

In 2019, the Federal Government waived N4.2 trillion in Company Income Tax and Value Added Tax. While N3.1 trillion was granted as tax relief on VAT in 2019, N1.1 trillion was granted on CIT. 

By 2020, the figure rose to N5.8tn, with the majority of it coming from revenue forgone under VAT. A breakdown showed that N4.3tn was forgone under VAT; N457bn under CIT; N307bn under PPT, and N780bn under customs duty.

The figure rose to N6.7 trillion in 2021 with VAT accounting for most of the relief. By and large, a culmination of the tax relief granted between 2019 to 2021 was N16.79 trillion. 

Meanwhile, the Federal Government has also proposed a tax exemption to the ton of N6.0 trillion in the 2023 budget despite about N12.43 trillion deficit. 

 

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Economy

Nigerians Pay N210 Billion For Electricity in Three Months

Nigerian electricity consumers pay N210 billion to power distributors in three months

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Nigerian electricity consumers pay N210 billion to power distributors in three months.

Nigeria Electricity Regulatory Commission (NERC) disclosed that Nigerians used N210 billion to buy electricity from distribution companies (Disco) between October and December of 2021. 

According to the 2021 fourth quarter (Q4) report of the commission which was released yesterday, electricity distribution companies otherwise known as “Discos” released a bill of N303.11 billion to consumers in Q4 2021 while a sum of N210.17 billion was retrieved. This means that N92.94 billion were left uncollected within the period under review.

NERC further stated that total billing by Disco increased by N30.12 billion if Q4 2021 is compared with Q3 2021. This represents an increase of 11.03 percent. Similarly, revenue collected in Q4 2021 increased by N16.64 billion when compared with Q3 2021. 

Although there was a slight increase of N16.64 billion in the revenue collected in Q4 2021, the increase in revenue did not however match up with the increase in electricity billing which was N30.12 billion, leaving a difference of N13.48 billion. 

Meanwhile, Nigeria Electricity Regulatory Commission (NERC) conceded that there is a huge metering gap for end-user customers. The commission acknowledged that metering deficiency is a perennial challenge that has critically hampered revenue generation in the industry.

The commission, therefore, disclosed a decrease in the number of meters installed in Q4 2021. 

“A total of 81,084 meters were installed in 2021/Q4 as compared to the 288,154 meters installed in 2021/Q3. The reduction in the number of meter installations in 2021/Q4 was largely driven by the winding down of the NMMP phase zero (0). The Commission’s records indicate that, of the 10,514,582 registered energy customers as at December 2021, only 4,773,217 (45.40%) have been metered compared to 42.93% metering as at September 2021” the report stated.

On electricity generation capacity, NERC noted that the average generation capacity for Q4 2022 was 5,465.72MW, with 4,294.02MWh/h generated per hour while the total power generated in Q4 2021 from 25 generating plants across the country was 9,480.21GWh.

 

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Economy

Severe Flood Ravage Farmlands in Nigeria, Experts Raise Concerns of Looming Food Shortage

The persistent rain being recorded in Nigeria lately has resulted in severe flooding that has ravaged farmlands as experts warn about food shortage in the coming months.

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The persistent rain being recorded in Nigeria lately has resulted in severe flooding that has ravaged farmlands as experts warn about food shortage in the coming months.

Due to torrential rainfall in recent weeks, with no sign of slowing down, almost all 36 states of the federation have experienced one form of flooding or the other.

The Nigeria Hydrological Services Agency (NIHSA) had recently warned that flooding will persist till the last quarter of 2022, which will take a great toll on farming.

In the North-Eastern part of the country, more than 150,000 hectares of land have been destroyed. Farmers in the region have expressed concerns over the large-scale destruction of produce, stating that the damage caused by the rainfall could be estimated at N30 billion.

They have therefore called for urgent interventions to mitigate the effects of the flooding, so as to reduce hunger and enhance food security.

Kenechukwu Onuorah, an expert at Global Rights, an international human rights capacity-building non-governmental organization, stated that one major consequence of persistent flooding is the huge impact it will have on agricultural output.

According to him, persistent flooding will make basic foodstuff scarce and expensive if nothing is done urgently to mitigate it.

His words, “The persistent rain may be good because it creates swampy lands that are good for the plants but flooding is a disaster.

“It comes with erosion, especially in the South, and washes away the plants. It destroyed the crops and even livestock will have nothing to feed on.

“There is so much we could do that we are not doing. We must ensure appropriate urban planning and drainage systems.

“Government at all levels must work to set Nigeria on the path towards greener renewable energy in order to reverse the effects of climate change. Unfortunately, the government is not working in that direction yet”.

Also speaking on the issue, The  Nigeria Hydrological Services Agency (NIHSA), an agency that provides services required for the assessment of Nigeria’s surface and groundwater resources, disclosed that flooding would persist, noting that the River Niger and Benue system had started building up.

The agency said, “As we are aware, Nigeria is located within the River Niger Basin, which is occupied by nine countries, namely: Benin, Burkina Faso, Cameroun, Chad, Cote D’Ivoire, Guinea, Mali, Niger, and Nigeria. Our country is at the lowest portion of the Basin.

“This means that once the upper catchment of the Basin gets flooded, Nigeria should be prepared to experience flooding”.

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Economy

Nigerian Lawmakers Express Concerns As Crude Oil Theft Increases Nation’s Debt

Lawmakers in Nigeria have expressed concerns over the incessant crude oil theft witnessed in the country as Nigeria’s debt reaches an all-time high of N42.84trn.

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Oil prices - Investors King

Lawmakers in Nigeria have expressed concerns over the incessant crude oil theft witnessed in the country as Nigeria’s debt reaches an all-time high of N42.84trn.

The Speaker, of the House of Representatives, Hon. Femi Gbajabiamila, while delivering his welcome remarks after the house resumed from a recess, stated that the continuous oil theft witnessed in the country has so far sabotaged Nigeria’s economy as there is a massive decline in the volume of crude oil exports.

He further stated that this act carried out by unscrupulous people is nothing but treason against the country, for which they must be severely dealt with.

He described those who carry out such dastardly acts as not being different from terrorists and insurgents.

In his words: “Due to theft and various acts of economic sabotage, we are experiencing a massive decline in the volume of crude oil exports.

“Our crude oil export of 972,394 BPD for August is the lowest we have recorded in the last two decades. 

“At a time when we are already experiencing severe financial constraints, there are mechanisms in place to prevent these sorts of bad actors, and the government spends significant amounts of money each year to protect oil and gas resources in the country. 

“Evidently, these existing arrangements do not suffice. As such, there is an urgent need to review them and make the necessary improvements. 

“It is also of particular importance that the perpetrators of these crimes against the state are identified, prosecuted, and subjected to the stiffest penalties the law allows. 

“Those who seek to impoverish our country in this manner have declared war against the Nigerian people. The government’s response must be sufficient to convince them of the error of their ways and deter others who might be tempted to join in their treason.   

“I met with the Finance Minister and the DG Budget and made it clear to them that enough of crude oil theft. Nigerians don’t want to hear that again. What do you intend to do about it? That’s the important question.” 

According to the managing director of the Nigerian National Petroleum Corp. (NNPC) Mele Kyari, he had disclosed that thieves from all levels in the country steal 200,000 barrels of crude oil per day.

It should be recalled that in 2021, Investors King reported that Nigeria lost $3.5 billion to crude oil theft.

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