Posted by By MODESTUS CHUKWULAKA, Abuja on
In December 2003, an indigenous tax consultancy firm, ABZ Integrated Limited, applied to render consultancy services to the Economic and Financial Crimes Commission (EFCC) to further the realisation of the commission's statutory mandate.
In December 2003, an indigenous tax consultancy firm, ABZ Integrated Limited, applied to render consultancy services to the Economic and Financial Crimes Commission (EFCC) to further the realisation of the commission's statutory mandate.
The company in a letter signed by its managing partner, Mr. Fidelis Uzonwanne, said it could through the avalanche of information available to it expose a number of multinational companies that had been ripping off the nation through sustained system of tax evasion and money laundering.
Uzonwanne, a chartered accountant said his team comprising accountants, economists and lawyers would focus its attention initially in the areas of Petroleum Profit Tax, Royalties and Withholding Tax.
"This effort will unmask the age-long secret in the Federal Inland Revenue Service (FIRS) that has nurtured and sustained corruption in the country," the application addressed to the EFCC chairman, Alhaji Nuhu Ribadu, said.
Within 35 days of working on the revenue sources, the consultancy firm had promised, "we will identify to the commission, a recoverable sum of at least $500 million" which it said constituted revenue lost to fraud and tax evasion in the past years. Based on the relevant information already at its disposal, the company said, it would liaise with the commission for the purpose of obtaining information from the target companies and other stakeholders.
Although ABZ had asked for N3.4 million as reimbursable costs for the exercise, it proposed that 10 per cent commission on recoveries made through its effort be paid it as remuneration for its services. It cited example with other government agencies like Customs, Ministry of Finance and Office of the Accountant General of the Federation which it said were paid incentives bonus on revenue recoveries.
According to the company, FIRS grants commissions ranging from 10 to 20 per cent for such privileged information that leads to recovering of additional revenue for government.
On August 24, 2004, Alhaji Nuhu Ribadu, chairman of the EFCC wrote to ABZ appointing it as a consultant to work with its Committee on Government Revenue Frauds.
In the correspondence entitled, Letter of Engagement as Consultant, the EFCC said ABZ would work directly under the control of the commission and treat with ultimate confidentiality all documents that may come its way in the course of any investigation. As for remuneration, Ribadu said in the letter that a case would be made for payment of "a negotiated fee upon actual recovery." On reimbursable expenses the EFCC boss had said that such should be duly approved before expenses are incurred.
Soon after, Uzonwanne told Daily Sun, his team went into operation.
Focussing mainly on oil giants, Chevron Nigeria Limited, it said the company had been shortchanging the country through fraudulent means, including over-bloating of its costs of operation, use of unmerited and illegal tax credit, fraudulent implantation of expenses, claim of unmerited capital allowances as well as conspiring with the FIRS to reduce taxes payable by it.
In a 106 page report entitled Investigation Report on Allegations of Tax Evasion and Fraud Against Chevron Nigeria Limited, ABZ alleged that the oil company had between 1995 and 2002 cost the country $2.7 billion in revenue through unpaid petroleum profit tax.
Although Chevron has denied allegations of sharp practices as were contained in the consultants' report, the company had during the period of investigation paid a backlog of $6.53 million into the Federal Government's account with the Federal Reserve Bank of New York. The amount, which the company paid in September 2004, Chevron said, was in respect of the 13th installment of its petroleum profits tax for 2001.
Now, ABZ wants to be paid for the job it has done. But the EFCC seems to be thinking otherwise, and that is where problem arises. Uzonwanne, the firm's managing consultant, said he has written several letters to the commission requesting to be paid its due commission from the recovered $6.517 million all to no avail.
Besides asking for its commission, ABZ has also proposed further recovery of unpaid taxes from Chevron, including penalty and interest on the already recovered sum. In a letter to the EFCC chairman, Uzonwanne figured that government could still press for additional payment of $3.747 million being penalty and interest on the $6.517 million.
But the EFCC seems to have developed cold feet on the matter. Not even several letters they wrote to Dr. (Mrs.) Ngozi Okonjo-Iweala, the finance minister to intervene in the matter, yielded any positive results.
"It is inconceivable that we recovered USD6.5 million of lost revenue for the government and seven months after, the relevant agencies are still undecided or reluctant to pay the due commission of at least 10 per cent," ABZ said in one of its letters to Okonjo-Iweala.
In taking the case to the minister, the consultancy firm said it needed her advice on the percentage of the recovery payable to it, mode of payment and future arrangement to harness efficiency of service.
Uzonwanne said his company is still in custody of salient information that could unearth massive fraud in the organised private sector, especially among big multinationals. But for now his major preoccupation is how to get the EFCC and the ministry of finance to acknowledge and pay for a successful job that has already been done.
EFCC's spokesperson, Osita Nwajah, could not be reached for the commission's comments, as at the time of going to press.