Alleged N2.6trn Tax Evasion: Lawmakers Summon Ministry Of Trade Officials

The House of Representatives Committee on Public Accounts at the resumed investigative hearing into the audit queries on tax evasion issued by the Office of the Auditor General for the Federation (OAuGF) has summoned all officials of the Federal Ministry of Trade and Industry involved in the inspection of MTN’s assets.

The Committee also requested for the tax records covering the periods under review from both MTN and the Federal Inland Revenue Service (FIRS) for further legislative scrutiny.

In the same vein, the House of Representatives Committee has queried the management of First Bank Nigeria Limited over the N94.345 billion revenue the bank collected on behalf of Nigeria Customs Service (NCS) as well as allegation bothering on breach of agreement on the Commission on Turnover (CoT) charges to the tune of N28.3 million.

Speaking at the investigative hearing, the Chairman, House Committee on Public Accounts, Hon. Oluwole Oke, disclosed that the OAuGF report had indicated that the documents relating to the N2.6 trillion capital allowances were allegedly forged.

While stressing that the Committee invited MTN over tax evasion, Oke explained that the OAuGF in its report observed that Federal Inland Revenue Service (FIRS) accorded value to the telecoms company while in some cases without certificates and evidence of capital allowance issued by Federal Ministry of Trade and Industry reflecting the whole assets procured by the company.

He said: “We have issues in this country where funds are not adequate for government to carry out policies and programmes which is why we had to borrow even though there are massive revenue leakages.

“MTN has also made appearances where

N2.6 trillion was seen as the taxable value for assets of the company and we asked where they exist and who verified them, because they had already claimed value for them with the FIRS.”

Oke maintained that Nigerians have rights to know the implications of MTN taking a certificate of N2.6 trillion to FIRS for tax waivers on the economy.

According to him, “the parliament simply wants to know whether it should sustain the query raised by the Auditor General or absolve the company of the allegations of tax evasion as it would be wrong to accuse it of such if the records tally with the company’s submission.

“The issue says that we should speak to facts and law. You were here when we asked the Ministry and they said both the local and foreign contents were the certificates they issued to you.

“However, Auditor General says such issuance appears to have been falsified which was the basis of its query to you,” he added.

While responding, MTN’s General Manager, Mrs. Yemisi Adeleye explained that the company has submitted all relevant documents issued by Federal Ministry of Trade and Industry reflecting the value of N2.6 trillion given to MTN.

While responding to questions on the 2016 inspection relating to the capital allowances granted to the company, Adeleye observed that the company made claims to Federal Ministry of Trade and Industry at the end of the year prompting them to choose a location and inspected as it was physically impossible for them to inspect thousands of assets across the country.

Hence, the Ministry, based on their selection using supporting documents granted the allowances.

She said what the company had in 2016, was the automated card record bearing ins and outs of the team leader, who she said was one Mr. Ike.

When asked how many people were on the team with Ike who had the access card and inspected the assets from March 29th to April 4th, she said she couldn’t remember the identities of the Ministry officials as the team members were not captured individually in the record.

She said what they presented to the FIRS was what their security team gave to them.

When asked again if the Ministry wrote the company informing it of the inspection date and the list of team members or just by words of mouth, Adeleye said the Ministry formally communicated to that effect.

Also asked how many assets they inspected within five days, she said she could not recall.

She argued that the most expensive of the company’s infrastructure were warehoused in their switches located in Ojota Lagos, Port Harcourt, among other places.

While giving details on the claims made by the company for capital allowance, she disclosed that the sum of N18,967,410,769 was claimed in 2016.

She said in 2017 a log book was brought back reading Abuja switch with Ike and three others as inspection team members.

According to her, total sum of N148 billion capital allowance was granted to the company, while N210 billion was approved in 2018 after the visit to Ojota Switch as well as N190,629,586,000 in 2019 following visit to the Port Harcourt switch.

Meanwhile, Oke while addressing First Bank’s Executive Director, Mr. Shehu Aliyu during the investigative hearing, acknowledged receipt of the amended report submitted by the bank with respect to the additional sum of N9.4 million.

Oke explained that the bank was invited to respond to the oAuGF audit query that the Nigerian Customs Service was over-charged by the banks in area of CoT.

He observed that presentations made by representatives of some banks including First Bank who made presentations twice, were found to be at variance with the agreement signed by NCS authorities.

According to the OAuGF’s query, First Back had in a MoU charged commissions that amounted to N1.3 billion, and had raised the commission to N1 as against the 30k originally charged.

Oke said: “You signed an agreement with Customs to take 30k per N1,000 and out of which you would settle Interswitch, but turn round to charge additional 10k suspicious.

“Other bank’s made presentations and they didn’t mention such a thing, and we find it very difficult to accept your presentation except we are convinced beyond reasonable doubt.”

Aliyu while responding observed that over the period of January to December 2019, First Bank collected the sum of N94.3 billion on behalf of the Nigeria Customs Service, “and we charged a total of N28.3 million, that is 30k per N1,000.”