Minister bars agency heads from foreign trips
From Mathias Okwe and Emeka Anuforo, Abuja
WITH the nation's cash cow, crude oil, reeling under low prices wrought by a stifling global economic meltdown, reality, it seems, is now flashing in Nigeria's government circle.
Reason: To shore up its dwindling fortunes, the Federal Government has decided to turn to a source many had argued it thumped its nose at in the past for easy money from oil - taxation.
Consequently, as part of measures to block leakage in its revenue drive, the Federal Government is to inaugurate special tribunals to try tax evaders and address complaints from tax payers, Finance Minister, Mansur Muhktar, has declared.
In a related move, Minister of Science and Technology, Alhassan Zaku, has warned top officials of the ministry and heads of parastatals under it against making frivolous foreign trips in the face of the current global cash crunch.
According to a statement yesterday from the ministry, Zaku read the riot act to the officials at a meeting where he told them to shun ostentatious lifestyle.
And, the oil price outlook turned gloomier as United States (U.S.) oil futures fell to a three-week low below $35 a barrel yesterday, dragged down by an overhang of crude oil stocks in the U.S. and concerns over the health of the global economy.
The U.S. crude for March delivery also dropped $1.30 to $34.64 a barrel while Brent crude fell 18 cents to $44.10 a barrel. U.S. crude has been running at a big discount to Brent due to a supply glut at the main U.S. storage hub in Oklahoma.
The losses came after the U.S. government reported on Wednesday a seventh straight weekly increase in nationwide crude inventories as the economic crisis crushes business and consumer fuel demand.
Crude oil stockpiles at Cushing, Oklahoma - the world's biggest storage hub and the delivery point for U.S. crude futures - rose last week to record levels around 35 million barrels, near operational capacity.
Already, The Guardian learnt that appointments of key officials of the tribunals were underway, preparatory to their inauguration.
The development comes on the heels of President Umaru Musa Yar'Adua's declaration that the 2009 Budget would be funded with tax revenue against the backdrop of sliding crude oil prices. Tax revenues for 2008 averaged N3 trillion, with its greater chunk coming from petroleum profit tax.
Muhktar, who spoke at the start of the Federal Inland Revenue Service (FIRS) Enlarged Management Meeting (EMM) in Abuja yesterday, said: "I am taking steps to ensure the early take-off of the Tax Appeal Tribunals, which is one of the priority assignments I inherited from my predecessors.
"With the assistance of staff of my ministry, I want to assure you that the tribunals will be constituted in no distant time."
The meeting is discussing the optimisation of tax collection in the face of declining economic activities in Nigeria, which the minister said had become imperative because "tax evasion has undertaken a dangerous dimension, which is inimical to the growth of the nation."
Muhktar said: "There must be a collective drive to eliminate tax evasion from our tax system, as tax evasion constitutes one of the most serious leakages in the attainment of government's fiscal objectives.''
However, the minister added that tax evasion could be eliminated if governments and their agencies operate transparently and are held accountable.
The FIRS has the Federal Government's mandate to evolve strategies to grow the non-oil tax revenue, with a target of N1.167 trillion from the latter this year, as against government's expectation of N639 billion from oil tax.
Muhktar said: "As you are aware, the government has resolved in the current year to lay emphasis on diversifying its sources of revenue from oil to non-oil sources. This is coming on the heels of a wonderful performance by FIRS in the non-oil sector in 2008, which Mr. President has confirmed was as a result of increased efficiency in the tax collection machinery.
"The government is looking to the FIRS for a better performance in terms of revenue generation, as government would rely on the non-oil revenue to help cushion the effect of the changing international oil market, which poses a big challenge to the nation's fiscal outlook.
" The government budgetary spending in the extractive industry, solid minerals and mines has not been reciprocated by sufficient revenue from the sector. This is another area the revenue authorities need to look at in days to come. Government spending in some sectors must be matched with adequate revenue to encourage the authorities to do more.
"The FIRS and the Nigerian Customs Service have been assured of maximum support by this administration and I have no doubt that you will live up to expectations. On my own part, I will endeavour to give the FIRS all the support it requires in the discharge of its duties to assess, collect and account for tax revenue. In this regard, I am currently pushing for the passage of some outstanding bills before the National Assembly because I know the importance of these bills and I have been assured of maximum cooperation by the Legislature."
Executive Chairman, FIRS, Mrs. Ifueko Omogui-Okaru charged the tax agency's staff to be alive to their duties in the light of the government mandate to the FIRS.
She said: "This is a call for action for everyone at the FIRS and particularly for persons present here. We must realise that we have a daunting challenge ahead and commit to surmounting this challenge, which I am sure we would since we do not lack the personnel, the tools and the environment to achieve the task. And I believe everyone here is committed to contributing his quota to the development of our country, Nigeria.
"We must therefore resolve to improve efficiency in service delivery to the taxpayers in the implementation of existing tax laws, and in the ways we collaborate with other agencies in the area of information sharing.
"Let us all note that once again, the FIRS has been firmly placed in the spotlight in the current year and we cannot shy away from the task ahead, which is to generate revenue for the federal, states and local governments to meet their developmental challenges."
The Science and Technology Ministry' statement read: "Dr. Zaku who gave the warning while addressing the Directors-General and Directors in the Ministry, said the order became necessary to save cost in this era of economic meltdown, stressing that they should learn to make sacrifice in the interest of the nation.
"Dr. Zaku also directed them to stop forthwith patronage of training institutions abroad for capacity building, saying that the Ibadan-based National Centre for Technology Management (NACETEM) of the Ministry should instead be patronised by all parastatals."
In the statement, the ministry's Chief Press Secretary, Andulganiyu Aminu noted that Zaku also urged them to speed up work on their capital projects, saying the ministry could not afford delays in capital project execution this year.
He also told the agencies' heads to come up with detailed project proposals for the year for prompt Federal Executive Council approval, stressing that all contracts must be advertised.
