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Business News

Illegal Tax Deduction: General Electric to refund Arco $2 million 

FIRS will refund Arco Petrochemicals Engineering Company Limited an excess of $2 million withholding tax illegally deducted from the firm.

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BREAKING: FG's VAT charges on online transactions to commence, firs, Illegal Tax Deduction: FIRS to refund General Electric, Arco $2 million 

General Electric will refund Arco Petrochemicals Engineering Company Limited an excess of $2 million withholding tax illegally deducted during a business engagement between both parties.

The agreement to refund this money was reached during a joint negotiation between FIRS officials, General Electric, ARCO and the Trade Union Services Department of the Federal Ministry of Labour and Employment in Abuja.

[READ MORE: Tax defaulters: Firms can challenge FIRS in court as deadline approaches]

The details: General Electric contracted Arco Petrochemicals to supply personnel for an engagement. After the engagement, the workers did not get all their entitlements because General Electric deducted 10% withholding tax for the contract that held between 2006 and 2015.

Illegitimate deduction: The deduction of 10% withholding tax is against the 5% tax rate stipulated by Nigerian law, according to Arco in one of its letters dated June 5, 2018. Arco argued that the stipulated tax rate should be 5% in line with the FIRS Circular No. 2006/02, dated February 2006.

As a result of this, 60% of each worker’s entitlement has been left unpaid since 2009. This dire situation forced the Federal Government to intervene through its Ministry of Labour and Employment after Arco admitted its failure in paying salaries and settling Union dues.

The ministry is not a debt collection agency, it came into the matter because ARCO accepted its financial obligation for the settlement of salaries and union dues, the company said the only way it could complete the payment is if GE made a refund to it.

We gave them three weeks to begin the process of refund for those monies that they have an understanding that they were actually over-payment to FIRS. If there is no contention on that, within one week, GE should initiate the process of refund,” an official from the Ministry of Labour and Employment said.

Branch Chairman, ARCO Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Amadike Ikechukwu, disclosed that only field workers were paid 100% of their entitlement while 40% was paid to other categories of staff when their employments were terminated.

[READ ALSO: 10 Nigerian companies pay a combined N187.9 billion taxes in first half of 2019]

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He explained that ARCO could not complete the payment because the American company, General Electric, deducted 10% withholding tax from workers earnings and paid the sum, which runs into millions of dollars, to FIRS. He was, however, optimistic of a turnaround in the situation.

As union leaders, we agree with the commitment made by FIRS and GE. We are optimistic that the remaining 60% will be paid to the workers,” he said.

 

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Reincarnated as a lover of stocks, Angel investors, seed funds, and anything aligned to tech or startups raising money, Joseph's work at Nairametrics involves following the money to wherever it leads. Before joining Nairametrics, he won an investigative journalism fellowship with ICIR, appeared in several national dallies, with hard-hitting opinions, features and investigative pieces. He has also engaged in content marketing and copywriting for a top e-commerce firm in Nigeria.

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Business News

DPR says it has accurate data of country’s crude production volume

Head, Public Affairs of DPR, Mr Paul Osu, said every litre of crude produced in the country was adequately captured during the process of extraction.

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Nigerian oil cargo

The Department of Petroleum Resources (DPR) has said that the agency has an accurate record of the crude oil produced in the country.

This is in reaction to claims that the exact volume of crude oil produced in the country has remained unknown.

While making this disclosure in a statement in Lagos, the Head, Public Affairs of DPR, Mr Paul Osu, said every litre of crude produced in the country was adequately captured during the process of extraction.

What the Head, Public Affairs of DPR is saying

Osu said DPR has the responsibility of monitoring and accounting for crude oil production which is the basis for determining the government’s revenue through royalty payments by operators for sustainable development.

He said: “As a further step to boosting crude accounting process from production to export, DPR recently launched the National Production Monitoring System (NPMS).

NPMS is an online platform for direct and independent acquisition of production data from oil and gas facilities in Nigeria.

NPMS as an electronic data transmission tool at production and export terminals is designed to better predict the performance of oil and gas reservoirs and better production forecasting.”

Osu noted that the NPMS tool enables DPR to exercise surveillance, perform production monitoring and data analysis for utilisation and forecasting.

He said DPR as a business enabler and opportunity house would continue to develop robust and strategic initiatives to ensure timely and accurate payment of rents, royalties and other revenues due to the government.

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In case you missed it

  • It can be recalled that the Executive Secretary of the Nigeria Extractive Industries Transparency Initiative (NEITI), Orji Ogbonnaya-Orji, on Thursday said the exact volume of crude oil produced in Nigeria, especially at the deep offshore fields, is not known by anyone.
  • He said the exact volume of crude oil produced in Nigeria had remained unknown because of the absence of meters at wellheads and the lack of capacity to monitor deep offshore fields.

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Business

Sanwo-Olu flags off Red line rail project as Lagos compensates property owners

The 37-km Rail Mass Transit Red Line will traverse from Agbado to Marina, moving over 1 million commuters daily.

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FG inks $3.9 billion deal with Chinese firm for construction projects

The Lagos State Governor, Babajide Sanwo-Olu, has flagged off the construction of the 37-km Rail Mass Transit Red Line, which will traverse from Agbado to Marina, moving over 1 million commuters daily.

This is as the state started the compensation of identified project-affected persons of the Lagos Rail Mass Transit Red Line project with the Governor handing over cheques to displaced property owners who were affected by the right-of-way.

The groundbreaking ceremony which took place at the Ikeja Train Station on Thursday was witnessed by the Minister of Transportation, Rotimi Amaechi, who was represented by the Director-General of the Nigerian Maritime and Safety Agency (NIMASA), Dr Bashir Jamoh, and the Deputy Governor of Lagos State, Dr Obafemi Hamzat.

What the Lagos State Governor is saying

Sanwo-Olu said the Red Line project which is to be fully operational in the last quarter of 2022 with 8 train stations from Agbado to Oyingbo, is another initiative of his administration to deliver enduring infrastructure for the transport system and make Lagos a competitive megacity.

The Governor said: “Today’s flag-off of the construction of infrastructure for the standard gauge Red Line is another promise kept and it demonstrates, in practical terms, our commitment to achieve the objectives of traffic management and transportation pillar in our development agenda. This is because we recognise the role which an efficient transportation system plays in enhancing people’s quality of life and as a major driver of socio-economic development.

The State’s Strategic Transport Master Plan, which encompasses a number of projects that are germane to achieving our vision for a Greater Lagos, is founded on imperatives that seek to increase transport choices for all users and make the transit system integrated, attractive, convenient, affordable and accessible.

Since efficient transportation is the backbone of any economy, we are happy to be committing this investment in our transport infrastructure, so that our people can meet their daily targets and aspirations. This all-important transport project we are all gathered to witness today represents a major step in this direction.

Sanwo-Olu said that in order to facilitate smooth operations of the Red Line, the State Government would be constructing ancillary infrastructure, including 6 overpasses at strategic level crossing points along the rail corridor to eliminate interactions between the rail system, vehicular and pedestrian traffic.

The overpasses will provide grade-separated crossings that will enhance safety for the rail system and road users.

He said: “The unique characteristics of the Red Line is its integration with the Ikeja Bus Terminal, Oshodi–Abule Egba Bus Rapid Transit (BRT) lane, the future Orange Line, which goes from Ikeja to Agbowa, and the General Aviation Terminal One of the Murtala Muhammed International Airport through a skywalk.

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Another unique feature of the Red Line is that all the stations have elevated concourses with either at grade island or side platforms for easy boarding and alighting of passengers. The Red Line also integrates with our Bus Terminals at Oyingbo, Yaba, Oshodi, Ikeja and Iju, giving modal options to our people in their daily commute, either for business or leisure.”

The Governor presented cheques of different amounts as compensation to 25 residents whose properties, businesses and accommodation will be affected by the project. Over 263 properties are affected with many of the property owners and tenants smiling as they got their cheques.

What you should know

  • The Red Line is part of the state government’s vision of an integrated multimodal transportation system contained in the State’s Strategic Transport Master Plan (STMP), developed by LAMATA, which aims ultimately to birth a world-class transportation network that will support the state’s profile, as the economic capital of Nigeria and Africa.
  • It is to raise mass transportation capacity in the State, complementing the Blue Line that traverses from Okokomaiko to Marina.
  • The rail corridor will be constructed in three phases. The first phase (Agbado-Iddo), which will be completed in 24 months, will be sharing the track with the Federal Government’s Lagos-Ibadan Railway Modernisation Project up to Ebute – Metta and will have its dedicated track from Ebute – Metta to Oyingbo and reduce travel time from about two and a half hours to just 35 minutes.

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