In what appears to be a face-off, the Kaduna State Internal Revenue Service has advised the investor of Kaduna Electric to settle their outstanding taxes, fines, and fees allegedly owed to the state and some of its Ministries, Departments, and Agencies (MDAs).
This was disclosed in a statement signed by the Service Executive Chairman, Jerry Adams, on August 3, 2024.
Tagged “Re: Kaduna Electric Disconnects Kaduna State Government House Over Debt of N2.9 Billion,” the service did not comment on the DisCo’s disconnection of power from the State Government House over the alleged N2.9 billion debt but used the opportunity to address the electricity company’s investor and others.
Kaduna DisCo Owes Taxes, Fees, Fines
Nairametrics previously reported on August 2, 2024, that the service had announced the sealing of Kaduna Electricity Company Plc (Kaduna Electric) office over unpaid taxes amounting to N600 million.
Hours later, the electricity company denied owing N600 million in unpaid taxes to the state, accusing the Kaduna State Government of engaging in “cheap blackmail” to divert attention from its own financial obligations.
The company stated that the closure has significantly impacted Kaduna Electric’s ability to maintain full operational control, noting that the dispatch center, essential for coordinating power supply, is now under lock and key.
In response, the company stated it has activated its contingency recovery plan to continue operations. However, it stressed that this measure limits the company’s visibility and control over its network, raising concerns about supply safety.
In its rebuttal, the service criticized the company’s investor while maintaining that the service is owed N600 million in unpaid taxes among other outstanding liabilities.
Adams advised the company’s investors to fulfill their civic responsibility. He stated:
“In view of the ongoing issues between Kaduna Electric and the Kaduna State Government, it is important to note that although the Executive Governor is committed to attracting investors and improving the ease of doing business in Kaduna State, it is equally expected that investors carry out their civic responsibility of paying taxes for the improvement of infrastructure, security, and overall service delivery for businesses in the State to thrive.
“Furthermore, the general public is reminded of the provisions of Section 3, Subsection 2(b) and (c) of the Kaduna State Tax Codification and Consolidation Law, which mandates the Service with the responsibility to collect and enforce the payment of taxes, levies, fees, and rates due to all Ministries, Departments, Agencies (MDAs), and Local Governments of the State.
“The sealing of the KAEDCO head office was a consequence of the N600 million tax liability accrued to the State.”
More Insights
Adams maintained that, apart from the N600 million unpaid tax, “other levies, fines, and rates payable to the State are yet to be considered” regarding Kaduna DisCo.
He disclosed that the Service has now requested the four MDAs of the State to forward their outstanding liabilities (non-tax liabilities, i.e., levies, fees, fines, etc.) owed by Kaduna Electric for enforcement.
The MDAs are: “Kaduna State Geographic Information Service (KADGIS), Kaduna State Water Administration Corporation (KADSWAC), Kaduna State Water Regulatory Commission, and Kaduna Environmental Protection Agency (KEPA).”
Adams stressed that the service is open to an amicable resolution with Kaduna DisCo but vowed to enforce tax compliance on any defaulting company in the state.
He stated:
“The Kaduna State Internal Revenue Service is committed to equitable taxation and thus will not overburden the poor with taxes but rather identify and carry out enforcement measures on tax-evading and non-compliant organizations and high-net-worth individuals, regardless of whose ox is gored.
“Going forward, the Service is open to further engagements with KAEDCO and all relevant parties for an amicable resolution of these issues.”
What You Should Know
Nairametrics previously reported that the Nigerian Electricity Regulatory Commission (NERC) had approved the acquisition of a 60% equity stake in Kaduna Electricity Company Plc (Kaduna Electric) by ASI Engineering Limited.
This was disclosed by Kaduna Electric via its X page on Friday, July 13, 2024.
The equity transaction followed a NERC report from six months ago, which revealed that the electricity distribution company had a debt of N110 billion ($130 million) owed to various entities, including the Nigerian Bulk Electricity Trader and power generation firms.
As disclosed in the statement at the time, ASI’s vision is to make Kaduna Electric a national leader in electricity distribution, driving sustainable development and enhancing the quality of life through innovative and reliable solutions, thereby impacting residents, businesses, and industries in its franchise states (Kaduna, Zamfara, Sokoto, and Kebbi).
The collaboration is expected to focus on modernizing the electricity distribution network, implementing innovative solutions for energy management, and fostering greater customer satisfaction and engagement.
NERC was appreciated for facilitating the approval alongside the Bureau of Public Enterprises (BPE).
The terms of the acquisition agreement include that ASI will prioritize investments in Kaduna Disco infrastructure upgrades, employee training and development, and embark on community engagement initiatives to create lasting value for all stakeholders.
