Despite claims of surpassing revenue target by the Customs Service, Nigeria is said to have lost a whopping N90 billion ($550million) in revenue from tax evasion to the grey market operators in the automobile industry over the last four years, the Managing Director, Financial Derivatives Company Limited (FDC), Mr Bismark Rewane has said.<\/p>\n
Describing the loss as mind boggling, Rewane, a renowned financial analyst,\u00a0 in a report released at the weekend by his Company , said the loss was equivalent to 4.5 per cent of the total exports of Kenya or four per cent of the total exports of Ghana. \u201cThis amount could fund the construction of one petroleum refinery or a modern power station with 1000 Mega Watts capacity.<\/p>\n
He explained the grey market as situation in which goods are imported inappropriately into a market without the manufacturer\u2019s consent, thereby short-changing the authorized dealers.<\/p>\n
The authorities of the Nigeria Customs Service had said it has surpassed the projected revenue over the same period due to some stringent measures put in place to check leakages of revenue.<\/p>\n
The Comptroller-General, Abdulahi Inde Dikko had attributed the feat to the stringent measures he put in place to closely-monitor revenue performance and block leakages. These measures he said include the creation of a System-Audit Unit in Headquarters to monitor duty payment in all Ports, the automation of the entire Customs Clearance Procedure which allows for faster and smoother clearance and the improved quality of Customs Workforce that is better-trained and motivated.<\/p>\n
However, Rewane said the revenue loss was too staggering when viewed on a leveraged basis of one is to three (1:3), saying it can finance the rehabilitation of two seaports and two modern airports, with an income per capita of $1500 and infrastructure gap of $200 billion,<\/p>\n
The FDC Chief Executive Officer rued over the monumental loss of government revenue arising from the grey market which he said affects government revenue from both direct and indirect taxes. According to him, while direct tax loss comes from the reduced sales and profit in the legitimate automobile industry, indirect tax loss comes from the custom duties and excises.<\/p>\n
\u201cThe bulk of the loss comes from the indirect taxes based on FDC\u2019s survey.<\/p>\n
Recent data from the CBN shows that a fall in customs and excise duties was one of the reasons the Federal Government non-oil receipts declined by 30.3% to N589.98bn in the last quarter of 2012.<\/p>\n
\u201cFrom our investigations, the continuous decline in government customs receipts can be due to either. A reduction in national import, or to increased importation through the grey market leading to avoidance of duty payment by grey market operators and corruption at the ports.<\/p>\n
\u201cData collected from the Nigeria Port Authority (NPA), Manufacturers Association of Nigeria (MAN) and through independent survey of the automobile industry shows that grey import is striving and almost at par with official import volumes. Loss to government from grey import is N85.2bn between 2008 and 2011.\u201d<\/p>\n
Rewane\u00a0 said in some cases, automobiles that are destined for land-locked nations such as Burkina Faso, Niger, Chad and trans-shipped through the ports find their way to the Nigerian market and custom duty payment is avoided in the process.<\/p>\n
He said the FDC Lagos urban inflation rose by 1.39 per cent to 12.77 per cent in February from 11.38 per cent in January.<\/p>\n
He said the increase was mainly attributable to a rise in the prices of a few items with higher weights in the index.<\/p>\n","protected":false},"excerpt":{"rendered":"
Despite claims of surpassing revenue target by the Customs Service, Nigeria is said to have lost a whopping N90 billion ($550million) in revenue from tax evasion to the grey market…<\/p>\n","protected":false},"author":1,"featured_media":10714,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[17],"tags":[],"class_list":["post-10712","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-exclusive"],"yoast_head":"\n