27 Apr

Daily Watch – Mining catches the derivation bug, Akwa Ibom takes tax fight to the courts

  • The Ministry of Mines and Steel Development said it had secured approval for the payment of 13 percent derivation from mining revenue to all 36 states of the federation. The ministry’s permanent secretary, Abass Mohammed, said the approval was part of efforts to improve the states’ participation in the mining sector. Mohammed said the ministry was collaborating with state governors to revive the sector after 45 years of decline in order to support the Federal Government’s deliberate policy of fast-tracking the solid minerals sector’s development in a sustainable way.
  • ERHC Energy, a publicly traded American company with oil and gas assets in Sub-Saharan Africa, is in discussions with the Nigeria-Sao Tome & Principe Joint Development Authority (JDA), regarding the terms of a new Production Sharing Contract for block two of the Joint Development Zone (JDZ). The company said in a statement that in addition to ERHC, the JDA has designated at least one new contractor on the Production Sharing Contract (PSC) in replacement of interest-holders that have terminated their interests in the block. According to the company, it will focus on opportunities for cost-efficient entry into production and producing assets. “Accordingly, the company has concluded a Term Sheet with Starcrest Nigeria Energy pursuant to the MOU earlier signed between the parties,” the statement said in part. Starcrest has a significant stake in Elcrest Exploration and Production Company, the holder of 45 percent of Nigeria’s producing OML 40. Starcrest also holds directly OPL 291 and OPL 242 in the country.
  • Dangote Sinotruck West Africa has rolled out its first set of locally assembled Chinese trucks as it began an eight-hour shift, assembling between four and five trucks per day at its Lagos-based plant. The Group General Manager, Projects, Hikmat Thapa, who spoke in company with other senior managers of the company after conducting journalists round the assembly plant in Ikeja, said it was the first phase of the project. He said that the second phase would begin in June with two shifts per day and hoped to do 24 hour- daily operations moving from ‘Semi-Knocked Down’ components to ‘Completely Knocked Down’ (parts) assembly. Thapa said the project is a joint venture between Dangote and Sinotruck of China, with the former controlling 65 percent, and the later, 35 percent. According to him, the plant, with an installed capacity to assemble 10,000 trucks annually, will take care of local demand as well as produce for export to some West African countries. The company said, in a statement, it would assemble and produce a full range of commercial vehicles covering heavy duty truck, medium truck, light truck and other semi-trailers, which would create 3,000 jobs for Nigerians.
  • Akwa Ibom has sued an oil servicing firm, Globestar Engineering Company, to the state’s revenue court over its failure to remit over ₦65 billion in Pay As You Earn (PAYE) tax liabilities covering a period 10 years. In two separate suits REV/772C/2016 and REV/15C/2016 filed against the company before the Revenue Court sitting in Uyo, the state capital, the state government is seeking the court’s declaration compelling the company to pay the sum of ₦65 billion in PAYE tax due and payable on income of its employees for a period of 10 years in compliance with the Personal Income Tax Act 0f 2004 as amended. In the charge read by the state counsel, Eyo Asuquo, before the court on Friday when the matter came up for hearing, the state government accused Globestar of failing to pay the tax on its personnel under the Pay As You Earn scheme regulation of 2004 to the Akwa Ibom treasury. The state government said it resorted to the legal action after it discovered that many of the oil servicing companies operating in the state had failed to remit over ₦80 billion in PAYE tax on their over 5,000 workers, mostly expatriates, in the last 16 years. It alleged that Globestar had no history of remittances of the PAYE taxes on the expatriates deployed to over 15 projects sites under Mobil Producing and Total (OFON) projects between 2000 and 2016.
  • The Lagos State Government has said that it would relocate the popular Computer Village in Ikeja to Katangowa in Agbado/Oke-Odo district of the state. Commissioner for Physical Planning and Urban Development, Wasiu Anifowose said this on Tuesday while briefing the press in Alausa as part of activities to commemorate the second-year anniversary of the current Akinwunmi Ambode administration. Computer Village is nationally regarded as a market for a wide range of technology products, ranging from phones, laptops and other gadgets. It is also a regional hub for product parts and gadget repairs. The state government said the move was imperative in order to control environmental degradation, a housing stock deficit and traffic congestion in the Ikeja axis of the bustling metropolis.