Jonathan woos investors, ready to okay refineries’ licences
N’Assembly upbraids DPR over N30b expenditure
IN a single year, the Federal Government lost N37.2 billion to indiscriminate granting of waivers to importers of raw materials, the Nigeria Customs Service (NSC) disclosed yesterday.
The NSC said this yesterday while reviewing its performance last year and presenting a budget of N1.24 billion as allocation for the purchase of generator fuel and refreshment for its men and officers in 2012 during a session with the Senate Committee on Finance .
Deputy Comptroller General of Customs (Human Resources,) Mr. Garuba Makarfi, said: “We lost 7 percent of our collection to export expansion grant which is non-negotiable, this amounted to about N37.2 billion. The grant was given to export oriented companies and local manufacturers, to export raw materials, but instead, these local manufacturers sell their certificates to dealers who then use it to import cars into the country.”
Also yesterday, the National Assembly’s Joint Committee on Petroleum Resources (Upstream and Downstream) and Gas Resources queried the Department of Petroleum Resources’ (DPR) proposed recurrent expenditure of over N30 billion for 2012. The DPR has only 1,100 workers.
The development came when the Ministry of Petroleum Resources, led by the Minister, Diezani Allison-Madueke, appeared before the committee to defend the 2012 budget of the Ministry. The Minister had presented a budget of N51 billion for recurrent expenditure for the Ministry, out of which N30.399 billion was earmarked for recurrent expenditure of the DPR.
Besides, as part of efforts to raise the nation’s petroleum refining capacity and reduce the importation of refined products, President Goodluck Jonathan is willing to give licences to those interested in setting up refineries in the country.
Jonathan dropped the hint yesterday, when he received a delegation of investors from Brazil at the Presidential Villa, Abuja. He told the visitors: “Nigeria has four refineries, but their combined capacity does not meet the country’s needs, so we are willing to approve applications for refining licences.”
The President stated that the government has opened up previously restricted areas of the economy to private sector investment opportunities, assuring the delegation of diverse opportunities since “Nigeria s still a green area in terms of investments.”
He directed the Minister of Finance, Dr. Ngozi Okonjo-Iweala, to hold further discussions with the Brazilian Voigt Group, to explore areas of mutual cooperation. The Ministers of Housing, Trade and Investment, Power and the Federal Capital Territory (State), the President directed, should also be part of the discussions.
Earlier, the Voigt Group had said it was willing to invest in construction, housing, power plants, petroleum refining and oil spillage clearing. The group also announced its willingness to donate 120, 000 housing units to Nigeria, over a period of three years. Mrs. Ngozi Olajeme of the Nigeria Social Insurance Trust Fund led the delegation to the State House.
Senator Emmanuel Paulker, Chairman of the Committee, was the first to raise the matter. He declared that the lawmakers were uncomfortable with such a provision in the budget, particularly at a period when the government was trying to cut down on the cost of governance.
Out of the N35, 997, 149, 841 budget, capital expenditure was allocated only N4, 786, 302, 790 while N31, 210, 847, 051 would cover personnel costs and other items under overheads. Further details of the budget show that, personnel costs for the DPR in 2012 is N30, 399, 182, 331 while N811, 664, 720 is for overhead costs.
Director of the DPR, Mr. Austin Olorunshola, explained that the DPR included the additional cost for the workers expected to be recruited within the next two weeks.
The Committee on Foreign Affairs expressed concern over government’s move to establish additional missions abroad, when the existing ones have not been properly managed.
The Mathew Nwagwu-led Committee on Foreign Affairs also condemned government’s inability to acquire property of its own abroad, to serve as offices and residents for foreign missions, frowning at the exorbitant annual rent, that had led to accumulated debts abroad.
Earlier on Wednesday, the House of Representatives’ Committee investigating the management of subsidy on petroleum products subjected the leadership of the Federal Inland Revenue Service (FIRS) to a questioning, over the non-payment of tax and import duties by companies involved in the importation of refined petroleum products into the country.
Also on Wednesday, the Federal Roads Maintenance Agency (FERMA) took its complaints to the House of Representatives regarding the non-payment of the road maintenance petroleum tax to it by the Petroleum Products Pricing Regulatory Agency (PPPRA).
At a resumed session of the committee’s public sitting, the Chairman of the FIRS, Mrs. Ifueko Omogui-Okauro said that although, taxation and import duties could attract huge revenue to the country, the Federal Government had placed an order exempting the importers of refined petroleum products from paying any form of tax.
This revelation triggered off several rounds of interrogation by members of the committee, who sought to know who approved the exemptions. The Chairman of the Committee, Farouk Lawal, asked the FIRS boss to present to the committee, within one week, records of the approval that exempted firms from paying duties and taxes.
On why they were exempted, Omogui-Okauro said government had always been sympathetic to Nigerians, who she said were the ultimate beneficiaries of the tax exemption. She explained that the main concern of government had been how to take the burden off the consumers of the products.
However, the FIRS boss said that a discussion that would lead to imposition of tax and duties on imported petroleum products would serve as a booster to government’s revenue base.
She was also asked to submit to the committee, records of tax registration by all oil companies involved in the importation of petroleum products. Omogui-Okauro had informed the committee that some of those companies had not done their tax registrations.
When asked whether she did not see anything wrong with the template of the PPPRA template that disallows tax and import duties on petroleum products, the FIRS boss said the whole problem of fuel import tax or non-registration of all companies involved in the importation of petroleum products would be over when the sector is deregulated.
“I do not believe that in a deregulated environment, PPPRA template would not include tax,” she said.
FERMA asked the House of Representatives to prevail on the PPPRA to release the statutory five per cent of the pump price on petroleum products in order to augment the agency’s revenue.
FERMA’s Chief Executive Officer, Gabriel Amuchi told the Ofor Chukwuegbo-led House Committee on FERMA at a budget defence session at the National Assembly, that the major challenge preventing the agency from delivering on its mandate was paucity of funds. According to him, the Road Maintenance Tax was to be deducted from both diesel and petrol.