SENATE: MOVING ON TO ECONOMIC ISSUES
Source: The Sun
By Yusuf Olaniyonu
Sunday July 12, 2015
Though the institution is on recess due to the formal suspension of its plenary on June 25 for about a month, but the Senate had lived up to the promise made by its President, DR ABUBAKAR BUKOLA SARAKI that the members will continue to carry out different assignments and that plenary will resume anytime there is an urgent issue of national importance.
In the last one week or so, the Senate has focused on gathering necessary facts and figures aimed at preparing members to deal with issues bordering on how to revive the nation’s ailing economy. In groups of 15 to 20 members, SENATOR SARAKI had gathered his colleagues to sit down with managers of the economy and the leadership of one of the anti-corruption agency to review the situation of the national economy, present efforts being made to save the country from the external and internal forces which struggle to keep the economy prostrate and discussing areas of possible legislative intervention to further solidify the plans.
First to brief the Senators last week on July 2 is the Federal Inland Revenue Service (FIRS), an agency assigned the responsibility of collecting taxes, duties and levies on behalf of the Federal Government. Led by its chairman, Mr. Samuel Odugbesan, the agency congratulated SARAKI on his success at the general election and his subsequent emergence as Primus inter pares in the Senate. Odugbesan further said that the price of oil which is the nation’s main income earner has been on the downward slide.
He said: “Oil and gas which is key to the economy has not been doing too well and this is as a result of many factors which are completely out of our control. The price of oil in the international market we all know has continued on the downward slide. Although in the last three months, it started gathering some momentum. As at today, I think it is average $59 and $62 but the average we have computed is about $59 and that is what is obtainable today.”
According to him, what is within the purview of the agency is to intervene to shore up the receipts from the non-oil sector. “As at the end of June, we have not actually got the total figures for June yet. It just ended yesterday and JP Morgan that is assisting the Federal Government to collect foreign components of our collection will still be giving us a report even a week after the closure of the month. But so far, we will say that Petroleum Profit Tax has given us N697.07bn for the first six months, that could go up a little bit. For the non-oil component, you have conflicting contracts which has brought in N778bn between January and June and Valued Added Tax N376billion”, Odugbesan said.
The essence of the briefing by the FIRS chief is to provide the Senate a detail explanation on why the revenue receipts into the federation account is falling. Again, the Senate had the opportunity to cross-fertilise ideas with the agency and decide on what the legislature need to do in support of efforts to block the loophole and shore up the revenue.
SARAKI in his address advocated for greater focus on tax collection to boost the nation’s revenue in view of the dwindling receipt from oil. He added that an efficient tax collection system in the country is sine qua non to the much needed economic revival at this time. The Senate President said an effective tax regime will not only help revive the economy but will help the government to fund its various development programmes and redistribute wealth among the various strata of the society.
The Senate President said the FIRS should come up with proposed laws and recommendations that can help to boost their operation in the area of adequate and efficient tax collection.
“The FIRS is one of the agencies that have requested to interact with the Senate and to show the importance that the 8th Senate places on performance. We decided to meet you as quickly as possible because we know that our country’s dependence on oil as a large source of revenue is very fragile and it cannot be a way forward for a country like us. You have seen it even by your own presentation. The way forward for our country is really to look at the area of our taxes, because it is more stable, reliable and not dependent on other issues outside the country.
“As you know today, tax is only about six per cent of our Gross Domestic Product, GDP, which is scored low compared to other countries that are doing about 20 per cent. So, there is a lot of work for us to do. I think the success of our revenue going forward will depend on you as the Chairman and your team and that is the blunt truth. If we are going to be depending on the fluctuating fortune from oil, then, we are not planning for the future but we need to plan first on the non-oil revenue sector. I am happy you (FIRS boss) are a new person coming in, you have an opportunity to think out of the box, be creative and turn around things in the FIRS.
“I hope that we will be able to partner together. We must ensure that everybody begins to pay the right taxes. When we talk about fighting corruption, it should start by ensuring that everybody pay the taxes that are due, everyone of us must be ready to do that. I know it is not going to be very easy but you can count on our support to make it happen”, SARAKI said.
The Senate President said the National Assembly would henceforth carry out stringent oversight on the tax agency aside from partnering with the FIRS to deliver on increased revenue. He said: “For us in the 8th Senate, this is an agency we want to work very closely with and we want to be very stringent on our oversights because honestly if we do not get it right in the area of taxation, I don’t believe we are going to get it right going forward. If you look at all the challenges before us, if the price of oil is good, we can execute our development policies and programmes but the fluctuation in the prices does not allow us to plan. Our non-oil revenue has to be stable enough to be able to address those issues and I think that is the area we need to work”, he said.
The Senate President added that it was time for the agency to address the concerns being raised by some states about lack of incentives in collecting the Value Added Tax (VAT). He added that some new taxes that were introduced to shore up revenue towards the tail end of the last administration have not yielded required dividends.
“The issue we have today is how can we expand the net, how can we ensure that everybody is paying taxes and not saying that you are imposing charges that will just make headlines. That is not going to take us anywhere. Let us address how do you for example improve on company income taxes. You see a lot of companies today, when you look at their foreign exchange demand, some of them are bidding for $200 to $300 billion, yet they say they are making zero profit”, he said.
SARAKI directed the FIRS management to send a proposal to the Senate on areas where they need legislative support to strengthen their operations and make them more effective and efficient in revenue collection and enforcement of relevant laws.
The next agency to be received by the Senate leadership is the Independent Corrupt Practices Commission (ICPC). The sequence of the visits suggested that after being briefed by a revenue collection agency, the Senate in its determination to also block leakages that seem to drain the revenue and prevent it from being channelled into projects, policies and programmes that will improve the standard of living of the general populace shifted attention to the anti-graft agency.
ICPC boss, Mr. Ekpo Nta in his submission to the Senate President and the other Senators said tackling corruption requires that the substructures that support corruption in the system be addressed before going after the “symptoms of corruption.”
“Public officers have been put through a lot of destabilization during the changes. They have not had pensions paid and all these had accumulated to the point where they have to resort to self help. We discovered that if the civil service is working optimally and the shortcomings are addressed, the issue of corruption would be made unattractive”, he said.
The Senate President however promised that the Senate will support the anti-graft body in combating the menace which has kept the nation down for so long. He said the Eight Senate which he is leading is totally committed to the zero tolerance for corruption position of the Buhari administration and that he and his colleagues would do everything to make the job of the anti-graft agencies easy and successful.
The Senate President also said most of the present problems confronting the country were a direct fall-out of the monumental corruption in the system. He added that corruption in the land has almost reached a crisis point hence the need for better collaboration by all national institutions to reduce it to the barest minimum, if not totally eradicate it.
“It is important for us to meet with you, to let you appreciate where we stand on the issue of corruption and to also listen to you for us to know some of the issues that are challenging to you because the ICPC, EFCC and Code of Conduct Bureau remain the most vital institutions in the fight that we are waging against corruption today.
We want to make the anti-graft war a priority for the Senate because we believe that it has got to a stage where it is truly endangering the entire system and some of the symptoms that we are seeing in the areas where it is affecting our national development is becoming more and more clearer to all of us.
“The message we want you to take away today is that the 8th Senate is ready to work with you. The 8th Senate is not going to provide any safe haven for anybody. The 8th Senate wants to work very closely with Mr. President on this very issue and I am sure with the political will, both on the part of the executive and the legislative and the agencies, we might not be able to eradicate it completely, but we can bring corruption to a level that as a country, we can be proud of. I am very committed on this and so are a lot of my colleagues here. The party is over. Everybody needs to know that we need to sing a new song because without it, we have all seen that we are getting into a crisis and we need to admit it,” SARAKI said.
He noted that the cost of corruption in our national life goes beyond financial cost and that corruption has manifested in the inability of state governments to pay monthly salaries. “We are seeing it in the state of our schools, the impact on our education. We are seeing it in the state of our health institutions and the impact on maternal and child mortality. We are seeing it in the ever increasing cost of governance, failure of public institutions and infrastructures. When we all went round to campaign, one of the promises we made to Nigerians was that we have to fight corruption and as people elected by Nigerians, we must fulfill that promise and we have taken it upon ourselves that one of the deliverables of the new dispensation is to bring an end to corruption”, he said.
“For the 8th Senate, making corruption a priority is a must and we are committed to that and our goal is to work with you, the EFCC and the Code of Conduct Tribunal to reduce significantly the level of corruption in our system. When a government gets to a stage that it cannot meet its obligations, then we know we are getting into a crisis and that crisis also requires drastic actions. If we are pussy-footing before, it is now time for us to be serious.”
Then the Central Bank of Nigeria (CBN) took its turn with the Upper Chamber of the legislative house. Its Governor, Mr. Godwin Emefiele told the Senate that the CBN has continued to initiate measures to strengthen the economy and reposition the country for the next phase of growth and development. While outlining the measures taken so far, he said notwithstanding the shocks the global economy has witnessed, the nation’s economic fundamentals remain strong.
“Let me reiterate that with inflation at single digit, exchange rate relatively stable and our reserves gradually rising from blocked leakages, our economic fundamentals remain strong. Going forward, the CBN will continue to be vigilant in the market to ensure that there is zero tolerance for speculators and rent seekers.
“Nigeria’s foreign reserves remain our common wealth and we must all strive to work together to protect it and prevent speculators and rent seekers from plunging it. We will continue to find ways to rebuild our reserves and where possible accelerate efforts aimed at improving aggregate supply potentials of the economy. In this effort, I strongly crave the support of the leadership of the Senate as we march towards achieving a more prosperous and self-sufficient Nigeria”, he said
SARAKI in his response directed the Central Bank of Nigeria (CBN) to ensure the urgent recovery of the N30billion which was the cost of waivers illegally granted to some category of importers, particularly those who trade in rice, chicken, palm oil, palm kernel, vegetable oil, poultry products, fish, tomatoes and textiles The Senate President said the measures were necessary to block all avenue through which the nation is losing revenue while the government’s banker also needs to champion the diversification of the economy in line with the agenda of President Muhammadu Buhari’s administration. “I believe the recent policies you initiated on some selected items are good steps that will help our economy. But one of the observations you also made was that CBN alone cannot make the policies to work. We, in the Senate, are ready to give the right signals that will help the success of these policies. For example, you brought to our notice some of the waivers and taxes, waivers on import duties especially on rice close to N30billion that was given to some companies which must be repaid to the Federal Government.
SARAKI said the policies of the CBN towards resuscitating the economy which Emefiele presented to the Senate can only succeed if smuggling is eradicated.
The signal therefore from the Senate and Its leader, SARAKI, is that there will be no quiet moment. No time to relax. There is so much to be done and the earlier the senior legislators settle down to the onerous task for which they are elected, the better for our country