Oil workers caution JTB, state tax boards over pension contributions

The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has cautioned the Joint Tax Board ((JTB) and some state boards of internal revenue over interfering in the smooth operations of the voluntary Contributory Pension Scheme as entrenched in the Pension Reform Act of 2014 and the 2015 amendment.

PENGASSAN said that such steps by the JTB and some state boards of internal revenue can jeopardize the relative industrial peace being enjoyed in the country.

Reacting to the recent advertorials by the tax bodies in some national dailies threatening to forcefully impose tax on withdrawals made by workers from their additional voluntary contributions, the senior staff association in the oil and gas industry stated that this was contrary to the provisions of the Pension Reform law.

In a statement signed by the National Public Relations Officer of PENGASSAN, Comrade Fortune Obi, it is the responsibility of the National Assembly to amend any sections of the Act as deemed fit and that of the Judiciary to provide interpretations where necessary.

“Hence it will be provocative for the JTB or state tax boards to unilaterally usurp the powers of the legislature and the judiciary by its planned and illegal move to tax such withdrawals. The tax authorities should be reminded that tax avoidance is the arrangement of one’s financial affairs to minimize tax liability within the scope allowed by law and is distinct from tax evasion which implies the illegal non-payment or underpayment of tax due,” he stated.

Comrade Obi cited Section 4(3) of the PRA 2014, which provides that “Any employee to whom this Act applies may, in addition to the total contributions being made by him and his employer, make voluntary contributions to his retirement savings account”.

“Section 10(4) of the Act further provides that “… Any Income earned on any voluntary contribution made under Section 4(3) of this Act shall be subject to tax at the point of withdrawal where the withdrawal is made before the end of 5 years from the date the voluntary contribution was made”.

He noted that with these clear provisions, it is obvious that the tax authorities are over-stepping their bounds by attempting to place restrictions on withdrawals against the express provisions of the law.