Officials confirm recovery of over N17 billion in missing revenue hoarded by private company

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The House of Representatives on Thursday confirmed the recovery of more than N17 billion in missing revenue generated by certain companies operating in the free trade zone and currently domiciled with the Central Bank of Nigeria (CBN).

The Chairman of the House Public Accounts Committee, Hon. Nigeria Export Processing Zones Authority (NEPZA) and other companies involved in collecting statutory and operational fees on behalf of the Nigerian Ports Authority (NPA), including Dangote.

Speaking to Acting General Manager of Dangote Industries Free Zone, Mr. Olayinka Akande, Hon Oke frowned at the wave of non-return of revenues collected on behalf of NPA to government coffers, despite the numerous incentives granted to free zone operators.

He alleged that Dangote Industries Free Zone, as a licensee of NEPZA, also licensed 17 other private zone operators.

He said: “The Auditor General of the Federation, in accordance with Section 85 of the Constitution of the Federal Republic of Nigeria, has laid his report before Parliament, both before the House and the Senate Public Accounts Committee, and in that report, the Auditor General raised questions about the activities of NEPZA.

“And in the process, this committee ordered the status of investigation based on the disclosure of NEPZA and of course, huge sums of money of over 17 billion naira allegedly transferred to a company and we tried to lift the veil of the constitution.

“Initially we were told that the business did not exist, but after a while the business surfaced. We got the details of the business, but we are happy to say that the 17 billion of naira in question are safe and that is with the CBN.

“But in the process, we ordered the progress of the investigation of NEPZA. NEPZA is one of the windows through which we seem to promote investment, develop our economy, attract foreign investors because of the advantages But we have found that our projected gains are not being realized, thus leading to loss of revenue, which the Honorable Minister of Finance also testified to.

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“That the reasons why we continue to borrow to finance our budget deficit is because we have a revenue deficit in the country. The Auditor General in 2016, 2017, 2018 had observed that five major bodies responsible for collecting funds on the Federation account are not doing well, they are not collecting what they are deemed to have collected.

“Specifically, the Auditor General listed Customs, listed FIRS, listed DPR, listed NNPC, listed Mining Cadastre Office; that Parliament should have looked at the annual projections of these agencies, because over the years they have gone down.

“So the essence of this engagement, sir, is to confirm if we really have leaks if they exist, how do we block them and if there are culprits who have undermined Nigeria, how do we approve the sanctions recommended by the auditor general? This is the essence of this commitment.

According to the Hon. Oke, other NEPZA licensees alleged that the registration fee and annual renewal fee payments paid in dollars were made to Dangote Industries Development Company, which is one of the licensees.

Upon requesting proof of payments to NEPZA, the companies disclosed that: “No, we did not pay NEPZA, we paid to Dangote Industries Free Zone Development Authority, so we are concerned that, c is what the government is counting on, heaven by giving you tax holiday, some benefits How come you are now paying another licensee But because we don’t have proprietary knowledge, we have to invite Dangote Industry Free Zone to tell us their own side of the story,” Hon Oke noted.

He added that it was discovered that some of the companies registered under the free zone were subsidiaries of some companies operating in the customs territory and also registered under another system – the petroleum free zone and of gas in Onne. Is it legal for a company to duplicate? Is it legal for a company to benefit from certain provisions in the NEPZA zone and at the same time in the oil and gas free zone? Is it legal for a company to leave one scheme and enter another scheme and not perpetually pay a penny in taxes to the government, as we found out in the case of ASCON, a company recorded in 1989 and from 1989 to 2021, it failed to pay N1 o the coffers of the Federal Government and the Orom Aluminum Smelter in Akwa Ibom State. They appeared and told us that they were leaving one program and entering another.

In his presentation, Mr. Akande, who maintained that the Dangote Group throughout its years of existence in Nigeria and elsewhere, has never been known for unethical conduct.

He disclosed that the company had submitted a 237-page document including the audited account of the Dangote Refinery Petrochemical Free Zone Enterprise since its inception (2017-2020).

According to him, the free zone company Dangote Industries in the document submitted to the Committee revealed that it has 96 FZD registered companies operating in the region, playing one role or the other in the refinery.

According to him, “in summarizing the views on this page, we found that our spending was in line with our projections. You will recall that this national asset is slated for commissioning (mechanical completion) this year. All of our expenses have been in line with this and I am delighted to say so.

He, however, noted that the company has so far been exempt from paying tax as it operates under the NEPZA law, adding that the company has not applied for pioneer status nor obtained the same.

Mr. Akande, who argued that the company had no dealings with the Bureau of Public Enterprises (BPE) or the Federal Inland Revenue Service (FIRS), however observed that the company will comply with the 2020 budget law as soon as that it will begin its activities.

While answering a question about the company given permission to operate the pier, Mr. Akande revealed that Dangote Quays is licensed by the NPA.

In a quick response to his submission, Hon Oke observed that the NPA had authorized Dangote Oil Refining Limited, pointing out that “if you have a business and a shareholder owns 99% of the capital, it should be considered a subsidiary.

“That is why Dangote Industries Free Zone company is owned by Dangote Oil Refining Company Limited, therefore both have to file a transfer pricing statement. Look what is happening here, ordinarily, the pier you operate, one would think that it was given to Dangote Free Zone Development company as FT zone. But according to the records here, the licensed company is Dangote Oil Refining Company Limited. Sir, these are evasive schemes, nothing more. These are avoidance stratagems. And the line between avoidance and escape is so thin. You can see it here.

“Similarly, sir, give us proof of payment to the Nigerian Ports Authority. What is the relationship between these companies and its implications for our economy? They are all sole proprietorship, sole shareholder, sole director.

He also alleged that Dangote’s Oil Company was also “registered with the Free Zone Company under its own baby. What I mean is that Dangote Oil Refining Company Limited has registered a free zone company called Dangote Oil Free Zone Development Company.

“The company that acquired the majority of shares, which acquired almost 99% of the shares on the registered capital of 1 million USD. It was acquired by Dangote Oil Refinery Company Limited, which means that this company owns the NEPZA license area. Even though it has the power to register other companies as well. The same company has now come to register again in the area.

But in his response, Dangote Group consultant, Mr. Agboluaje argued that the companies are not the same. One is oil refinery, another is petrochemical, they are different nomenclatures.

He added that Dangote Refinery Limited Liability Company is registered under CAMA (Companies and Allied Matters Act), while Dangote Petrochemical Free Zone Enterprise is a different entity, under NEPZA.

Concerned about the disparity in the documents submitted by the companies concerned, the Committee ordered the authorities of NEPZA to provide details of the revenues paid into the consolidated account of the Federation during the period under review.

In making his decision, Hon Oke demanded records of all statutory fees collected from the 96 companies registered in NEPZA’s name and proof of restitution.

While frowning at the series of irregularities in the presentation of stakeholders and the outcome of the investigation into NEPZA activities, he insisted on the need for further investigation to determine the actual amount handed over.

“Parliament, in the course of verifying the revenue accruing to NEMZA, payment of operating surplus to the consolidated fund, Parliament has discovered that a licensee of NEPZA, by the name of Dangote Free Zone Development Company, also authorized 96 other companies.

“Rather than giving feedback directly to NEPZA, give feedback through Dangote Free Zone Development Company. To determine the actual amount paid and remitted to the government, this committee decided that Dangote Free Zone Development Company should provide this committee with records of payments made to government coffers through NEPZA.

“The committee further invites the 96 sub-licensees of the payments they have made which are authenticated in government coffers,” he said.

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Officials confirm recovery of over N17 billion in missing revenue hoarded by private company


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