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Reps confirm recovery of missing N17bn free trade zone revenue

Reps uncover N300 billion unclaimed funds in commercial banks

The House of Representatives has confirmed the recovery of missing N17 billion revenue generated by some companies operating within the Free Trade Zone and presently domiciled with the Central Bank of Nigeria (CBN).

Oluwole Oke, chairman of the House committee on public accounts disclosed this during an investigative hearing into the audit queries issued by the office of the Auditor General of the Federation (oAuGF) against the Nigeria Export Processing Zones Authority (NEPZA) and other companies involved in the collection of statutory and operational fees on behalf of Nigerian Ports Authority (NPA).

Oke frowned at the spate of non-rendition of revenue collected on behalf of NPA into the government’s coffers, despite numerous incentives accorded operators at the free zone.

While addressing Olayinka Akande, acting managing director of Dangote Industries Free Zone, he alleged that the organisation as a licensee of NEPZA also went ahead and licensed 17 other private zone operators.

The chairman said “the Auditor General of the Federation pursuant to section 85 of the constitution of the Federal Republic of Nigeria laid its report before the parliament both the House and the Senate committee on public accounts and in that report, the Auditor General raised queries on the activities of NEPZA.

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“In the process, this committee ordered status of inquiry based on the disclosure from NEPZA and, of course, a huge sum of money – N17 billion plus that was allegedly transferred to a company and we tried to lift the veil of incorporation.

“Initially we were told the company does not exist, but after some time the company surfaced. We got the details of the company, but we are happy to say that the N17 billion in question is safe and it is with the CBN.

“But in the process, we ordered status of inquiry on NEPZA. NEPZA is one of the windows through which we seem to promote investments, grow our economy, and attract foreign investors because of the benefits in the zone.

“But we observed that our projected gains are not being met, thus leading to loss of revenue, which the minister of finance also attested to. That the reasons why we keep borrowing to finance our budget deficit is because we have revenue gap in the country.”

Oke said the auditor general had in 2016, 2017, and 2018 observed that five major bodies that are saddled with the responsibility of collecting funds into the federation account are not doing well by not collecting what they are deemed to collect.

He said the auditor-general specifically listed the Nigerian Customs Service, Federal Inland Revenue Service, the erstwhile Department of Petroleum Resources, Nigerian National Petroleum Company, Mining Cadastral Office as the culprits.

“So the essence of this engagement is to confirm whether truly we have leakages. If they exist, how do we block them, and if there are culprits that have undermined Nigeria, how do we approve the sanctions recommended by the auditor general? That is the essence of this engagement,” the lawmaker said.

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

On request for the evidence of payment to NEPZA, the companies said “we didn’t pay NEPZA, we paid to Dangote Industries Free Zone Development Authority, and so we are worried that, that is what government relies on.

“How come you are now paying another licensee? But because we do not have exclusive knowledge, we have to invite Dangote Industry Free Zone to tell us their own side of the story,” Oke noted.

He added that some of the companies registered under the free zone were discovered to be subsidiaries of some companies operating within the Customs territory and also registered under another scheme – the Oil and Gas Free Zone in Onne.

Oke said: “Is it lawful for a company to double-deal? Is it lawful for a company to enjoy some provisions within the NEPZA zone and at the same time under the Oil and Gas Free Zone? Is it lawful for a company to exit one scheme and enter another scheme and perpetually not pay a dime in form of taxes to the government as we discovered in the case of ASCON, a company registered in 1989.

“And from 1989 to 2021 they have not paid any money into the coffers of Federal Government, and Aluminum Smelter Company in Akwa Ibom State. They appeared and told us they were exiting one scheme and entering another scheme.”

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

He disclosed that the company submitted a 237-page document including the Dangote Refinery Petrochemical Free Zone Enterprise’s audited account from inception (2017-2020).

According to him, the Dangote Industries Free Zone Enterprise in the document submitted to the committee disclosed that it has 96 companies registered FZDs operating in the area, playing one role or the other in the refinery.

He said: “Summarising the views from that page, we found out that our expenditure has been in line with our projections. You will remember that this national asset is meant for commissioning (mechanical completion) this year. All our expenditures have been in line with that and I’m delighted to state that.

Akande, however, noted that the company up till now is exempted from payment of tax because it operates under the NEPZA Act, adding that the company did not apply for pioneer status nor obtain the same.

Responding, Oke observed that NPA licensed Dangote Oil Refining Limited, stressing that “if you have a company and a shareholder has 99 percent of the equity, it should be considered as subsidiary.