• Wednesday, July 24, 2024
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FEC Approves Tax Waivers Automation Platform to Cut Revenue Loss

Fuel subsidy to gulp N450bn in 2020 – finance minister

The Federal Executive Council (FEC) presided over by Vice-President Yemi Osinbajo, on Wednesday  approved the automated platform for the issuance of Import Duty Exemption Certificate (IDEC)  as well as vehicle identification and registration number.

The platform is for the government to effectively track and manages all revenue accruable from import duties and other charges.

Speaking to State House correspondents after the cabinet meeting, the Minister of Finance, Budget and National Planning, Zainab Ahmed, said that the automated process would enhance efficiency, block leakages and reduce the amount of time it takes to review exemption request and provide the necessary approvals.

The Federal Government had announced early in the year that it lost N4.6 trillion from waivers granted to importers in 2017 and 2018.

The loss came as a result of the ministry not implementing the IDEC project.

It had said it hoped to cut the huge revenue losses to the tune of over N2 trillion due to manual processes.

She said: “Today the ministry of finance sought the approval on a project which is designed to manage an automated gateway platform for the issuance of import duty exemption certificates as well as vehicle identification and registration number. The federal ministry of finance, Budget, and National Planning is responsible for the ministry and the country’s National finance and one of our responsibilities is implementing fiscal incentives that are used to attract investors to promote non-oil exports as well as encourage industrialization programme and stimulate growth in the economy.

“So, what we do is to handle applications for exemptions that come to the ministry. Various categories of import duty payments and other tax incentives and some of these exemptions cover a number of sectors including the downstream gas utilization projects, the Agro-Allied processing projects, Aviation- commercial aircraft engines and spare parts, automobile assembly, iron and steel production, power including thermal hydro, solar and wind, textiles- plants, machinery and equipment that are imported for use for mining operations.

“In the process of these exemptions, a couple of years, we realize that government was actually ceding quite a significant amount of revenue through this process. Because the process was largely paper-based, we got approval today to automate this process, to enhance efficiency, to block possible leakage and also to reduce the amount of time that the ministry takes to review this exemption request and provide the necessary approvals.

“This portal will be managed by both the ministry as well as the Nigeria customs service.”

On the vehicle identification and registration number, Ahmed said it would be available to any user to access and find out information on vehicles.

According to her, “On our part, on the IDEC component, we will be able to see how much waivers have been granted to which sectors and also track the performance of those waivers and reduce the cost subsequently.

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“The portal is undertaken in the form of a Public-Private Partnership (PPP) arrangement with Forecore Technology Solution Limited, as the preferred partner to Develop, Deploy, Manage and Transfer for a 10-year concession period before transferring back to the ministry.


“They are to earn revenue which is coming from IDEC application fee. We are going to share the revenue in the promotion of 90 percent to the government and 10 percent to Messers Forecore Technology Solution Limited. They are earning this 10 percent to enable them recover the cost of deployment as well as the management because they will also be the ones managing the project over this 10 year period.”

Asked to reaction to the alarm raised by the Senate that over N20 trillion revenue collected as stamp duties has not been remitted, Ahmed said: “The stamp duties up till now has been a subject of litigation between the Nigerian Postal Service and Federal Inland Revenue Service. So, while the banks when you make any transfer charge you N50, these revenues were not accruing to government. They were pulled at the central bank and we also feel and I don’t have the facts, that there will be some funds being held by the commercial banks as well.

“The Central Bank has itself said that they are holding about N43 billion now but in the new finance Act that the two houses of the National Assembly just passed, there is an amendment that is made to the stamp duties Act that relates to the mode of collection.

“The finance bill has made the FIRS as the collecting agency so, that addresses the issue of the litigation.

“So, going forward, the revenue should be remitted as they are being collected unlike what has happened in the past that the funds were kept in a special account because of the litigation that is going on.”

Meanwhile, the Minister of Works and Housing, Babatunde Fashola, said the Cabinet approved the sum of N40.451 billion for road contracts in Ogun- Oyo and Kano states.

According to him, the first memorandum was to resolve conflicts between existing contracts and to re-scope those contracts so that the roads can be completed. There are two of our contractors working in contiguous locations on the Ijebu-Igbo – Onomi road toward the Oyo State border which is in Ogun State and also the Ijebu-Igbo Ita-Igba – Owonowe to Ibadan connecting Oyo and Ogun State. So council approved the revision the re-scope of work between the two contractors at the existing contract price. So it’s just a revision of the rescope of works because the government was not changing the contract price, but was assigning responsibilities because it was an existing council approval, which could not be varie it in the ministry so they had to come back.

He said the other was the approval of two roads the Tagwai- Kansa road to Doguwa in Kano for N8.436 billion and Alkaleri to Situk Road in Bauch state for N32.015 billion these are roads that the ministry was working in the 2019 budget.

He said this was part of the implementation of the 2019 budget before the end of the year, adding that the  Council also approved the variation.

Also, the Minister of State, Health, Senator Adeleke Olurunnimbe Mamora, said that the council gave approval for contract under the ministry of health for the purchase of 15 operational vehicles by NAFDAC at the cost of N307.562 million which essentially are meant to improve mobility.