Saratu Umar was fired as the executive secretary of the Nigerian Investment Promotion Commission (NIPC) on the suspicion that she leaked information on the granting of questionable tax waivers estimated to be worth $20 billion, TheCable can report. Umar, who was appointed only last year, was sacked on Monday by President Goodluck Jonathan exactly eight days after a nine-month-old letter on the controversial waivers was leaked to the media — and six days after the NIPC staff union petitioned the president to ask for her removal. No reason was given for her sack.
Nigeria is believed to have lost at least $20 billion to tax holidays granted to undeserving companies between 2010 and 2014, mostly on the recommendation of NIPC. But this was before Umar became its chief executive and embarked on a tax holiday reform for which she was recently commended by the Revenue Mobilisation Allocation and Fiscal Commission (RMFAC). Ngozi Okonjo-Iweala, the finance minister, had written to Umar in August 2014 to complain about the indiscriminate granting of waivers.
The letter, which was published in THISDAY on May 10, 2015, alleged that the federal government lost huge revenue to questionable tax holidays granted companies by NIPC. TheCable learnt that Umar was accused of leaking Okonjo-Iweala’s letter to the media in order to embarrass Jonathan and curry the favour of President-elect Muhammadu Buhari. The prolonged media war against Umar by NIPC senior staff was believed to have been instigated “from outside” in order to prepare grounds for the removal of the woman The biggest beneficiaries of the waivers are thought to be oil companies linked to top government officials. ‘Irresponsibility and immaturity’ After the leak of Okonjo-Iweala’s letter, NIPC staff petitioned Jonathan, asking for Umar’s removal. “It appears the current Executive Secretary has taken the staff agitation for her removal to a desperate point of dragging the outgoing administration of President Goodluck Jonathan to the mud by whipping up sentiments in the media at this critical time when the Nation is undergoing transition.
The leakage of the letter by the Minister of Finance sent directly to the Executive Secretary of NIPC on August 12, 2014 and which has been in her custody, smacks of an act of irresponsibility and immaturity,” Ahmad Ghondi, chairman of NIPC union, wrote in the petition. Jonathan promptly fired Umar in a move reminiscent of the removal of Sanusi Lamido Sanusi as central bank governor in February 2014 after his letter on “missing” oil money leaked. Umar had been having a running battle with the senior staff of NIPC who went public with their opposition to her. At a stage, they declared that 98% of the staff were against her “dictatorial” style of leadership and “incompetence”. NIPC is saddled with promoting investment opportunities in Nigeria, and part of the incentives for investors is tax holiday for which the commission has to issue “pioneer status” certificates.
However, the waivers are to be applied within certain criteria, such as a company investing in a virgin area that needs incentives. Although Okonjo-Iweala did not give the actual figures of revenue lost through the tax holidays, she said while oil companies were supposed to be taxed 65 per cent under the Petroleum Profit Tax Act, certain officials of NIPC listed such companies under the Industrial Development (Tax Relief) Act, thereby making them qualify for pioneer status. She said the tax holidays were granted to companies “whose products do not meet the requirements of the list of industries or products specified in the schedule to the Act”. Unfair advantage
The officials of NIPC further breached the rule by backdating the pioneer certificates, forcing the federal government to refund taxes that had already been paid into its coffers by these companies, she said. A beneficiary of this, according to Okonjo-Iweala, is Seplat, an operator of one of the fields belonging to NNPC. “While SDPC (Shell) disposed of its interest to Seplat, NNPC disposed of its interest to NPDC (Nigerian Petroleum Development Company, being the exploration arm of NNPC). Seplat, thereafter, was granted a tax holiday whereas NPDC continued to pay taxes from the operation of the same field. This confers an unfair advantage on Seplat,” she wrote.
As many as 15 oil companies are believed to have benefit from the tax holidays despite not being eligible but for the connivance of NIPC officials. The union staged a protest that led to the paralysis of activities at the headquarters of the agency in Abuja on April 22. During the protest, its members carried placards with inscriptions such as: ‘NIPC without management/Council’, ‘Saratu Umar must go today’, ‘Self-styled one-man management’, ‘No imprest to zonal office for eight months’. But Umar denied the allegations, saying some directors of the agency who were indicted for misappropriating NIPC’s funds were behind the protest.
Chairman of RMFAC, Elias Mbam, recently commended Umar for “taking bold steps” that had sanitised the granting of the pioneer status incentives which had hitherto witnessed challenges in its administration that led to huge revenue loss to the federation. Mbam said import duty waivers, concessions and exemptions “have direct bearing on the quantum of revenue accruals into the Federation Account which gets depleted and consequently affects the share of every tier of government”.
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