FG to “punish” state, local govts over double taxation in mining sector – Minister

The Federal Executive Council (FEC), on Wednesday, authorised the finance ministry to directly deduct the federal allocation of any state or local councils found imposing illegal taxes on mining operations.

The Minister of Information and Culture, Alhaji Lai Mohammed, made this known when he briefed State House correspondents on the outcome of the Council’s virtual meeting, presided over by President Muhammadu Buhari, in Abuja.

The decision, according to the minister, followed a memo by the Minister of Mines and Steel Development seeking the Council’s approval to address major challenges facing the nation’s mining industry.

He said the challenges as highlighted by the minister include double taxation, insecurity in parts of the country and collusion between some stakeholders, including some traditional rulers.

He said the menace of double taxation was driving a lot of investors out of the country.

Mohammed, therefore, maintained that the Council’s decision on direct deductions from the federal allocation of any state or local council involved in double taxation, was to save the mining industry.

He said: “On the issue of double taxation, whereby mining companies are taxed by local and state governments, two decisions were taken.

“One is that the council directed the Minister of Finance, Budget, and National Planning to deduct directly from federal accounts, allocations of states which have deprived Federal Government of Nigeria revenue due to it by position of illegal taxes and levies on mining companies in their States.

“In other words, if a particular state engages in double taxation, you are imposing illegal taxes on a duly registered mining company, and it is reported to government, the Ministry of Finance will deduct that money from your allocation.

“The intent is to ensure that we don’t scare away investors, they be local or foreign.”

“This will go a long way to reassure the investors that Nigeria is a safe place to invest now.”

“It was also directed that the National Economic Council should also dialogue with the Governors and let them understand that States can participate in mining as corporate bodies.”

“In other words, States can register companies and participate in mining, but they cannot come there as sub-national authorities because the law is very clear.’’

He emphasized that the federal government has exclusive right to mine and manage all mineral resources.