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FG quietly removed electricity subsidy, fuel subsidy to follow – Zainab Ahmed

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The Minister of Finance, Mrs Zainab Ahmed, has revealed how the Federal Government quietly removed the subsidy on electricity tariff. She said the government had to carefully adjust the prices incrementally at some levels.

Speaking on Thursday at a virtual meeting of African Finance Ministers and the International Monetary Fund, Ahmed also said the amendment of the budget was ongoing to accommodate the incremental removal of fuel subsidy. The theme of the meeting was ‘The political economy of fiscal reforms’.

Ahmed said, “We are cleaning up our subsidies. We had a setback; we were to remove fuel subsidy by July this year but there was a lot of pushback from the polity. We have elections coming and because of the hardship that companies and citizens went through during the COVID-19 pandemic, we just felt that the time was not right, so we pulled back on that.

“But we have been able to quietly implement subsidy removal in the electricity sector and as we speak, we don’t have subsidies in the electricity sector. We did that incrementally over time by carefully adjusting the prices at some levels while holding the lower levels down.”

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She said fuel subsidy remained a huge problem for the government as it had thrown up deficits more than what was planned. She noted that the rise in global oil prices would worsen the issue “but the current review that we are doing is to hold the subsidy at the level in which it is planned,” she said.

Ahmed added, “We are currently doing a budget amendment to accommodate incremental subsidy (removal) as a result of the reversal of the decision and we want to cap it at that. Hopefully, the parliament will agree with us and we are able to continue with our plan for subsidy (removal) otherwise the way things are going we will not be able to predict where the deficit will be as a result of the fluctuation in the global market.”

She stated further that the government was improving tax administration and compliance by adopting technology so as to increase revenue.

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Fuel price: NNPC denies adjusting pump prices of petrol, diesel

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The Nigerian National Petroleum Company (NNPC) Limited says it has not adjusted the pump price of premium motor spirit (PMS), known as petrol, across its retail outlets.

There have been speculations that NNPC had reduced the price of petrol to N560 per litre — from N568.

 

The national oil company was also quoted as increasing the price of diesel to N920 per litre.

In a statement on Wednesday, signed by Femi Soneye, NNPC’s spokesperson, the firm denied the claims.

 

“NNPC Limited wishes to clarify rumours suggesting a price adjustment for Premium Motor Spirit (PMS) and Automotive Gas Oil (Diesel) at its retail stations nationwide,” the statement reads.

 

“The company asserts that these reports are false and urges Nigerians to disregard them entirely.

 

“NNPC Ltd reaffirms its commitment to sustaining the current sufficiency in petroleum products supply across all its retail stations in the country.

On February 9, the NNPC had said there would not be any increase in the cost of petrol.

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Law enforcement agencies investigating $2.4bn unverified FX claims – Cardoso

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The governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, says law enforcement agencies are investigating $2.4 billion unverified foreign exchange (FX) claims.

 

Cardoso spoke during a press conference on Tuesday after the 294th meeting of the monetary policy committee (MPC) in Abuja.

 

On February 5, Olayemi Cardoso, CBN governor, said he inherited a $7 billion FX backlog when he became the head of the apex bank in September 2023, however, it was discovered that $2.4 billion of the sum was invalid following an inquiry into the transactions.

 

Subsequently, the apex bank said all outstanding FX obligations had successfully been settled.

 

While providing clarification on the unverified claims, the CBN governor highlighted various irregularities, such as the disbursement of large sums of FX for requests that were never submitted and allocations made without the necessary naira backing. 

 

He said there was an absence of legal validity and adequate documentation in these transactions.

 

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Cardoso also stressed the gravity of these irregularities, labelling numerous transactions under investigation as “clearly unlawful”.

 

“We brought in Deloitte management consultants who took time and this really did take months. This is not something that happened overnight and a lot of this work was going on and people didn’t know but they took months painstakingly to go through all the documents, all the documents and to ensure that you know, they would have a report, which we could rely on,” he said.

 

“In the course of that, of course, we determined that a number of these transactions did not qualify. In some cases, you had some allocations that were made in millions of dollars, which were never requested for.

 

“We also had somewhere they had no naira and they were also allocated, you know, huge sums of foreign exchange and the list goes on. It was for that reason that we refused to validate those particular transactions.

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“We refused to validate them because apart from the fact that documentation was not satisfactory, in many cases, they were outright illegal. And the law enforcement agencies, of course, are now looking into those transactions that are, as far as we’re concerned, not valid to be paid. 

 

“I would emphasise that if there’s any information to the contrary, we would in due course consider that but as of today, that is exactly where it stands and the law enforcement agencies are taking a very, very hard look at those transactions.

 

“Other transactions, we have settled and as of today, as I have said before, I will say it again, that the valid transactions as far as the Central Bank of Nigeria is concerned, have been taken care of.”

 

‘FX MARKET IS AS OPEN, TRANSPARENT AS POSSIBLE’

Speaking further, Cardoso addressed the issue of stakeholders who may not be satisfied with the FX official market.

 

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According to Cardoso, all verified claims have been settled, adding that anyone is free to access the market.

 

“We are also not mindful of the fact that there may be some stakeholders who over a period of time may have had backlogs in one form or the other,” he said.

 

“We are not unmindful that that could be the case. That some of those may go back, you know, years, a long period of time.

 

“We have done what we can to make the market as open and transparent and liquid as possible. So those particular stakeholders are free to access those markets and take care of the backlogs. We have met the verified backlogs of contractual obligations as we deem them forward transactions.”

 

Meanwhile, on March 21, foreign airlines in Nigeria said they do not support patronising the investors and exporters (I&E) window  for foreign exchange (FX) transactions.

 

 

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UPDATED: FG files tax evasion charges against Binance

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The Federal Government has filed a criminal charge against Binance, a popular cryptocurrency platform, for “tax evasion”.

The charge was filed before the federal high court in Abuja on March 25 by the Federal Inland Revenue Service (FIRS), according to a statement on Monday.

 

The FIRS said the move is aimed at upholding fiscal responsibility and safeguarding the economic integrity of the country.

 

The lawsuit, designated as suit number FHC/ABJ/CR/115/2024, “implicates Binance with a four-count tax evasion accusation.”

 

“Joined with the crypto company as second and third defendants in the suit are Tigran Gambaryan and Nadeem Anjarwalla, both senior executives of Binance currently under the custody of the Economic and Financial Crimes Commission (EFCC),” the statement reads.

 

The FIRS said the charges levied against Binance include non-payment of value-added tax (VAT), company income tax, failure to file tax returns, and complicity in aiding customers to evade taxes through its platform.

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‘BINANCE FAILED TO REGISTER WITH FIRS’

More so, in the suit, the federal government also accused Binance of failing to register with the FIRS for tax purposes and contravening existing tax regulations within the country.

“One of the counts in the lawsuit pertains to Binance’s alleged failure to collect and remit various categories of taxes to the federation as stipulated by Section 40 of the FIRS Establishment Act 2007 as amended,” the agency said.

 

“Section 40 of the Act explicitly addresses the non-deduction and non-remittance of taxes, prescribing penalties and potential imprisonment for defaulting entities.”

 

The FIRS also detailed specific instances where Binance purportedly violated tax laws, such as failing to issue invoices for VAT purposes, thus obstructing the determination and payment of taxes by subscribers.

 

Citing the Act, the tax body said “any company that transacts business in excess of N25 million annually is deemed by the Finance Act to be present in Nigeria”.

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“According to this rule, Binance falls into that category. So, it has to pay taxes like Company Income Tax (CIT) and also collect and pay Value Added Tax (VAT),” the statement further reads.

 

“But Binance did not do this properly. So, the company broke Nigerian laws and could be investigated and taken to court for this infraction.”

 

The agency said it remains resolute in its commitment to ensuring compliance with tax regulations and combating financial impropriety within the cryptocurrency sector.

The federal government had recently accused the cryptocurrency platform of manipulating foreign exchange (FX) rates, leading to a clampdown on crypto trading platforms.

On February 28, two of Binance’s top executives — Nadeem Anjarwalla, a 37-year-old British-Kenyan and Binance’s regional manager for Africa; and Tigran Gambaryan, a 39-year-old US citizen and Binance’s head of financial crime compliance, were detained by the Nigerian authorities for weeks.

 

Subsequently, a federal high court in Abuja ordered Binance Holdings Limited to provide the Economic and Financial Crimes Commission (EFCC) with the comprehensive data or information of all persons from Nigeria trading on its platform.

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