Guardian

Nation faces economic holocaust, says Senate

Reps deplore tax evasion, tackle Obasanjo

CBN seeks stable exchange rate, healthy external reserves

IN both the Executive and Legislative arms of government, the concern over the alleged poor state of the Nigerian economy is growing.

Yesterday, lawmakers in the two chambers of the National Assembly declared that all was not well with the nation’s economy. While the Senate expressed concern on the decline in Nigeria’s Internally Generated Revenue (IGR), the House of Representatives deplored the persistence of tax evasion by most corporate bodies in the country.

The Central Bank of Nigeria (CBN) has also drawn attention to the negative changes in the economy. The apex bank governor, Sanusi Lamido Sanusi, said Nigeria must focus on rebuilding its reserves and stabilising the exchange rate to protect the economy against fresh threats from the uncertainty in the global economic.

Sanusi acknowledged that a drive to replenish the country’s Excess Crude Account, which remains depleted following the 2009 drop in oil prices, would require political will. He said that the country’s economic development would benefit from greater private sector involvement.

“The global economic outlook is still uncertain, and it is vital that we resume our savings so that we are prepared for the worst in case the situation deteriorates,” Sanusi stated in a statement issued yesterday by the Oxford Business Group (OBG) based in Dubai, United Arab Emirate (UAE).

To the Senate, if the Federal Government failed to take urgent steps to arrest the poor IGR situation, Nigeria might “face a disaster.”

The concern of the Upper Chamber was prompted by a motion moved by Senator Bassey Otu (Cross River South) to the effect that there was a an urgent need for Nigeria to urgently improve on its IGR through the implementation of Back Duty Investigation.

He said Nigeria could improve on its IGR by looking into issues relating to unpaid taxes, tax evasion and recommended modalities to be adopted by Federal Inland Revenue Service (FIRS) to block loopholes created in the system through backdoor duties.

He described tax evasion as unpatriotic, criminal and unconstitutional, which retards Nigeria’s development.

In his reaction, Senator Smart Adeyemi said it was “unpatriotic, criminal and unconstitutional for people to evade taxes. The collection of taxes dates back to thousands of years and it was supposed to be the most reliable source of revenue to govern people and a reliable source of improving the well being of the people.”

Senator Olubunmi Adetumbi (Ekiti South) noted that taxation is the strongest basis for public administration and forms moral ground for people to demand for their rights.

Senator Bukola Saraki (Kwara Central) said ‘‘unless something is done to address the issue immediately, danger looms ahead. Based on the fluctuating price of oil in the international market, we need to do something quickly.’’

The Deputy Senate President, Ike Ekweremadu, condemned tax evasion, stating that it was a criminal offence. He therefore tasked tax authorities on measures to achieve “absolute collection of taxes.”

Also yesterday, the Senate asked the Executive arm of government to implement free and compulsory basic education policy for the Nigerian child.

It mandated the committee on Women Affairs and Youth Development to look into the domestication and application of the Child Rights Act among states in the country and report back to it immediately.

This followed a motion moved by Senator Ita Enang (Akwa Ibom North East) and 45 others on Senate’s pledge to Nigerian children on the celebration of Children’s Day, which takes place Sunday next week.

Meanwhile, President Goodluck Jonathan has forwarded for consideration of the Senate, the nomination of Justice Clara Bata Ogunbiyi (North East) and Musa Dajo Mohammed, North Central as Justices of Supreme Court.

Sanusi said the steps taken to recapitalise Nigeria’s banks and put their balance sheets in order meant they were now better placed to play their part in boosting lending. “The question now lies with the counterparties,” he said. “Vital elements, like infrastructure, energy and agricultural transformation are what will bring about bankable companies and projects. The ball now lies in the government’s court.”

He said the ‘Cashlite’ programme, which forms a key component in Nigeria’s efforts to reduce the volume of cash in circulation, was scheduled to be rolled out across the country at the beginning of 2013 following its introduction this year in Lagos. “The roll-out over 2012 has been focused on Lagos as, given its proximity to the landing points of fibre-optic cables, it is ideally positioned for technological adoption,” he said. “Instant electronic transfers have been enabled, interconnectivity between ATMs is ensured and mobile banking licences have been issued.”

Meanwhile, the Lower House has ordered an investigation into alleged tax evasion by corporate entities in Nigeria.

It also directed FIRS to carry out back duty investigation of all corporate entities that were breaching the country’s tax laws. This is intended to recover unpaid taxes and improve on internally generated revenue by the government.

A special ad-hoc committee to be raised soon will investigate the alleged tax evasions and make appropriate recommendations to the House.

At media briefing on the motion, Deputy Chairman of the House Committee on Media and Public Affairs, Victor Ogene, said after successful investigation of the subsidy regime by the Farouk Lawan-led ad-hoc panel, the House’s focus was on the issue of tax administration in the country.

A member of the House, Babangida Ibrahim, had in a motion on the urgent need to improve IGR to the Federation Account, through the implementation of back duty investigation, argued that in spite of efforts by FIRS to check tax evasion, fresh findings had shown discrepancies and manipulations by corporate entities.

Chairman of the House Committee on Public Accounts, Adeola Olamilekan, who lamented the non-uniformity of figures regarding revenue proceeds to the Federation Account, said a lot of monies were being withheld by several corporations through tax evasion.

Similarly, Adam Jagaba, and Chairman of the Committee on Appropriations, John Enoh, in their separate submissions, urged the House to ensure tax compliance in the country. Enoh expressed worries that the country was over 70 per cent dependent on oil revenue, adding that much more must be done with a view to exploring other sources of revenue.

The House has also reaffirmed its support for embattled Chairman of the Capital Market Committee, Herman Hembe and his Deputy, Chris Azubogu, who were picked up by the Economic and Financial Crimes Commission (EFCC) over allegation of corruption levelled against them by the Director- General of the Securities and Exchange Commission (SEC), Arunma Oteh.

Ogene said the duo had not been sacked from their positions in the House.

He explained that the Chamber was awaiting the report of the Ibrahim Tukur-led ad-hoc committee, which concluded the investigation into the collapse of the capital market.

The panel faulted the Economic and Financial Crimes Commission (EFCC’s) handling of the matter, saying “it is an open knowledge that the DG of SEC is statutorily a member of the Board of the EFCC. So, if she is involved in a tango with any individual or organisations, the EFCC is the right body to probe the matter.”

On when would former President Olusegun Obasanjo be invited by the Committee on Ethic and Privileges to defend his allegation that the present crop of legislators were corrupt, Ogene said the decision was within the purview of the panel.

Obasanjo had on Tuesday accused the legislature, judiciary and the police were corrupt, and that “they have no hope for the country.”

Ogene claimed that Obasanjo was in search of relevance and “he thinks that the way to go about it is to take spot shots at the legislature. We won’t join issues but I think it is wrong for an elder to stand outside and pee into the house. The normal practice in Africa is to go outside and pee. But if you do that I am sure that children will be wondering the kind of elder you are.”