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Controversy Trails Rice Tax Evasion By Importers

Federal Government is concerned about N21 billion rice evasion by indicted importers who have shun the payments

Taiwo Hassan

The Presidency is concerned about the situation of thing currently trailing the rice tax evasion by two foreign rice companies as indications emerged that the companies involved in the rice scam have refused to pay the N21 billion import duty levy into government coffer.

Specifically, the grey area may not be unconnected with reports emerging that the expiration date for the payment-April 14, has come to past as the Nigeria Customs Service met a brickwall with the companies involved over the allegations that these rice importers have been lobbying the Federal Ministry of Agric and Rural Development to secure import waivers that would enable them to escape the tax payment.

A source from Nigeria Customs told The Union that at the Federal Executive Meeting in Abuja, last week, the rice tax evasion matter came up, amidst that government was not happy with reports emanating on the situation.

According to him, the Presidency is ravaged that the foreign rice importers have been found to be guilty by the FMARD through a committee that investigated the abuse of import quota for rice allocation into the country and that NCS has even published the names of the rice importers in Business day and The Nation newspaper of April 14, 2015; but rather than paying for their excess importation, had flooded the Federal Ministries of Finance and Agric, soliciting for waiver concessions.

Two weeks after the expiration of the ultimatum as contained in the public notice, the importers did not pay the import duty and they were not arrested by NCS or any other security agency.

The indicted importers resolved to ignore the ultimatum to pay the import duty, even as they dared NCS based on superior advice from those backing them.

It was however learnt, that the Ministry of Finance had insisted that they should approach the Presidency; the Minister of Agric, perhaps, under much plea, had granted some, and denied others; thereby igniting bad-blood, and acrimony.

In the opinions of those who couldn’t get their waivers, the Minister’s action was not only divisive; but also discouraging as the issue on ground was not whether he lacks the power or not to grant waivers, but he should not have denied them, since they all qualified for it.

A senior staff of the Olam farm who affirmed that his organisation was one of those who secured a waiver, however insisted that it was on the basis of merit, and not sentiment.

“We got our concession by merit. We are the largest single existing investor in the rice sub-sector over the past two years with existing investments of over $120,000,000″, he explained, noting that it was for such reasons, in addition to other qualifications that the Ministry willingly reduced the amount owed by 50 percent to 54,000 MT.

The staff who spoke on conditions of anonymity, highlighted further that the farm in 2014 actually imported 243,707 MT from June to December whereas the quota allotted under the import allocations was 134,461 MT; thus implying an excess imports of a gap of 109,246 NT, the gesture was to ensure food sufficiency, so that Nigerians would not go hungry.

“Every decision was made to ensure that not only was rice made available, but relatively cheap too”, he explained further, stressing that the decision to import in excess above what was approved should be applauded, not penalized, he posited, justifying his strong argument that the farm genuinely qualified for a 10% duty and 20% levy, in terms of its excess rice import under allocation.

“We have demonstrated verifiable evidence of current and planned investment in domestic rice production over a 3 year period; a heavy size of investment; proof of land acquisition and reasonable establishment of rice fields and paddy production.

“We have demonstrated a clear plan of purchase of paddy from PACs, including the location of PACs volumes of paddy to be purchased, etc, in addition to laudable purchase outlook, from outgrower farmers and farmers cooperatives”, he stated further, stressing that while he would not hold any brief for other companies, he was confident that the concession extended to the farm was fully justifiable.

A secretary at the Federal Ministry of Finance said that the Minister of Finance, Dr. Ngozi Okonjo Iweala has not granted concessions on rice, since the President was not favourably disposed to it.

At the Federal Ministry of Agric, even though our efforts to obtain the response of the Minister of Agriculture, Dr. Akinwumi A. Adesina proved abortive, a senior staffer who spoke on condition of anonymity confirmed the story, adding that a waiver had been granted to some rice importers.

In his explanation, he indicated that the Minister granted a concession on 13th April, 2015; because, Dr. Akinwumi was glad that domestic rice production was already on the increase, as a result of which, he sincerely believed the rice merchants needed to be timely encouraged by granting such duty waiver.

“Given, OLAM Nigeria’s massive rice production and milling investment in Nigeria; and being the largest single existing investor in the sub-sector over the last two years with existing investments of over $120,000,000, the Minister gladly reduced the amount owed by 50 percent; hence to 54,000 MT; and which is now to be applied to 2015 allocations”, he stated further, noting that those who secured concessions did so by merit.

“For instance, Olam’s existing rice production and processing operations and future investment plans have been assessed against the basic criteria, upon which a high import quota was allocated.

“The Minister’s decision should be commended” the senior staffer posited, pointing out that without such encouragement, the masses would go hungry.

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