In an era such as now, no thanks to the economic disruption posed by the Covid 19 pandemic where waivers are often announced, it is a thin line to get carried away by the legal framework these policies should thrive upon. Also, as waivers directly impact the revenue-generating activities of the Federal Inland Revenue Service, FIRS, the situation becomes dicier to rightly dissect the role of the agency in granting waivers.
Rightly dividing the role of FIRS in granting waivers has been the sole reason for a legal tussle between the National Assembly and three foreign firms operating in the Nigerian market. These firms are; Indorama Petrochemical, Indorama Fertilizer & Petrochemical Ltd, and OIS Indorama Eleme Port Harcourt.
This back and forth since 2015 has thrived on allegations that the FIRS over the years has granted certain waivers to the identified companies, hence the need to invite Muhammad Nami, the executive chairman of the FIRS to grant clarity.
What the Law says
Honouring an invitation sent May 27th 2021, the FIRS boss took time to explain to members of the House of Representatives in a recent investigative session, the role of the agency in the whole saga.
Without mincing words, Nami explained that there is no locus standing for the agency to grant waivers to companies, explaining that the agency lacks any legal empowerment to grant tax waivers to both local and foreign investors in the country.
A searchlight on Indorama Petrochemical, Indorama Fertilizer & Petrochemical Ltd and OIS Indorama Eleme Port Harcourt.
While still shedding light on the scenario before the House’s Committee on Public Accounts, the three firms according to the FIRS’s boss have been variously granted pioneer status between December 15, 1997 to 2016 for the Indorama Petrochemical Ltd and between 2017–2020 for the Indorama Fertilizer and Chemicals Ltd respectively.
In his words,
“Upon expiration of the pioneer period and conclusion of post pioneer Audit, the Indorama Petrochemical Ltd company’s tax file was returned to the Large Tax Office (LTO) Port Harcourt. Thus far, the company has filed its annual returns up to 31st December 2019 with relevant Self-Assessment and paid its attendant liabilities,” he said.
‘The investigation of the three foreign firms, Indorama Petrochemical, Indorama Fertilizer and Petrochemical Ltd and OIS Indorama Eleme Port-Harcourt, started way back in 2015. The committee in charge of the investigation has consistently been furnished with all required documents by the FIRS.
What you should know,
- It is pertinent to note that by the Establishment Act of the FIRS, it has no statutory powers to grant both local and foreign companies waivers.
- FIRS only implements what has been formulated by the presidency and rectified by the Legislature or vetoed through Executive Orders.
- The FIRS does not have the power or responsibility of facilitating or implementing incentives to local investors or investors coming through the Foreign Direct Investment platform, which is the sole prerogative of the Nigerian Investment Promotion Commission (NIPC).
- The FIRS has since set up a high-power committee with the National Investment Promotion Commission (NIPC) to look into issues of tax waivers and granting of pioneer status.