Nigerian lawmakers query N5bn import duty waiver to Chinese company

Nigerian House of Representatives Committee on Public Accounts has queried the duty waiver granted a Chinese company, China Harbour, valued at N5bn, to import construction materials.

The committee specifically expressed dissatisfaction that a Chinese firm was given such an opportunity despite the fact that Nigeria had multi-billion dollar loans to repay China.

Chairman of the committee, Wole Oke, spoke at an investigative hearing on Wednesday based on an audit query issued against the Nigeria Customs Service by the Office of the Auditor General of the Federation.

Oke condemned the complacency of the various regulatory agencies that approved such waivers allegedly in breach of due process and extant financial regulations, which he said had caused the country a huge loss of revenue.

The lawmaker further condemned what he called flagrant breach of various policies and regulations guiding the waivers and capital allowances granted to some multinational companies and public quoted companies between 2014 and 2020.

The committee consequently directed the Minister of Industry, Trade and Investment, Niyi Adebayo, to provide evidence of the capital allowance certificates granted to over 600,000 companies and other relevant documents during the period under review.

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Oke quoted the query by the auditor-general as expressing concern over the depletion of revenue accruing to the Federation Account, which he said was “nose-diving.”

He added, “And they (OAuGF) asked us why we not filing the revenue profile of Customs. They said it should be audited. That is what they said. And so, we called Customs and Customs came and presented the list.

“There are a lot of things like tax avoidance. Tax avoidance is lawful but we are only checking the abuses. That is what we are doing. In a situation where you are based in Nigeria, import from France for example and the documents emanate from Mauritius.

“Some multinational companies indulge in the abuse of tax avoidance and transfer service schemes, and they use that to undermine revenue generation in Nigeria. Some of these companies float subsidiaries in tax haven countries and some of these companies are 100 per cent owned by them; so, they operate through their subsidiaries.

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“The prices at which they buy from the manufacturers are not what is contained in the shipping documents. By so doing, they can even cut down 50 per cent of duty that they ought to have paid to Nigeria.

“That is the issue the auditor-general is raising; that collections by Nigeria Customs (Service), collections by FIRS (Federal Inland Revenue Service), remittance by DPR (Department of Petroleum Resources) and NNPC (Nigerian National Petroleum Corporation) is nose-diving and that we should check it.

‌“They are even particular about Customs, that we should audit it and that is why we invited Nigeria Customs; and Nigeria Customs availed us – in response to the committee’s invitation – a list of over 600,000 companies.
“There is no how we can invite over 600,000 companies; we don’t even have the budget because it will cost us N1.2bn to write them. So, we have to do sampling to conform to the fiat in the issues raised by auditor-general.”

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Oke emphasised the need for relevant committees of the House, including Finance and Customs and Excise, to escalate their oversight mandates in the bid to block leakages and level of impunity being perpetuated by the MDAs, noting that the exercise being carried out by the Committee on Public Accounts is a post-mortem.

In his ruling, Oke directed the Chairman of the FIRS to furnish the committee with records of A-Z Petroleum and its subsidiary companies, copies of audited accounts, capital allowances claims and tax certificates issued.

He also asked the clerk to the committee to write the Registrar-General of the Corporate Affairs Commission to “unveil the veil of A-Z Petroleum and the affiliate companies, particulars of the directors and shareholders vis-à-vis annual returns.”

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