Discos Deny Owing FG Tax Arrears

The power distribution companies (Discos) in Nigeria have denied owing arrears of taxes to the federal government since the power privatisation exercise ended in 2013.

Their trade association – the Association of Nigerian Electricity Distributors (ANED), stressed that the power investors were not indebted to the government through taxes in a statement in response to a recent comment attributed to the Chief Economist of Price water house Coppers Coopers (PwC), Dr. Andrew Nevin, that they owed the government taxes for years on account of their poor financial positions.

Nevin, had at a recent power sector roundtable disclosed that the Discos were owing the government tax arears because they had been unable to make any profit from their operations.

But ANED responded, saying the statement by Nevin was untrue.

It explained in the statement signed by its Director of Research and Advocacy, Mr. Sunday Oduntan, that while they acknowledged Nevin’s effort to highlight the challenges of the sector in his presentation, thus, fostering dialogue that was critical for the resolution of same, they were not owing the federal government tax arrears.

“We hereby, unequivocally, state that this claim relating to Discos not paying federal government taxes is misleading, incorrect and not supported by the facts.

“As responsible corporate citizens, all of our member Discos take their tax obligations to the federal and state governments, as applicable, seriously. As a result, the Discos diligently pay all necessary taxes that apply to their operations,” said the Discos.

According to the power sector investors, “These taxes include the minimum Company Income Tax (CIT), Withholding Tax (WHT) and Value Added Tax (VAT). We will like to encourage all parties interested in the growth and success of the Nigerian Electricity Supply Industry to constantly diligently verify their information, to avoid creating more challenges than that which already exists in the sector.”

Meanwhile, the Abuja Disco has disclosed that its Chief Financial Officer, Ije Okeke, has been appointed a commissioner by the Global Commission to End Energy Poverty (GCEEP) under the management of the Rockefeller Foundation.

It said the appointment was in line with a renewed drive by the global body to end lack of access to electricity for almost a billion people across the world, particularly in sub-Saharan Africa.

According to the Disco, the Commission is co-chaired by Ernest Moniz, Professor of Physics and Engineering Systems Emeritus at the Massachusetts Institute of Technology (MIT) who is also a former U.S. Secretary of Energy; President of the Rockefeller Foundation and former USAID Administrator, Dr. Rajiv Shah; and Africa Development Bank (AfDB) President, Dr. Akinwunmi Adesina.

It explained that the announcement of Okeke’s appointment followed the first full

The federal government has said it will initiate new policies to help electricity distribution companies (Discos) improve on their tariff collection levels.

It also promised to consistently provide them with cost-reflective electricity tariff to enable the sector to operate.

Speaking recently at a power sector roundtable organised by the Mainstream Energy Solutions, operators of the Kainji and Jebba hydro power stations, Vice President, Prof. Yemi Osinbajo, explained that the cash crunch experienced in the power sector was wellknown to the government and that it was working on finding a lasting solution to the matter.

Represented by the Minister of Power, Mr. Sala Mamman, Osinabjo, stated that the government would devise strategies to help the power Discos recover monies due to them from the electricity bills they send to consumers. “The continuous growth of the sector is of critical importance to the Buhari administration, as such, we assure this congregation that we will do our utmost best to establish appropriate policies to address issues such as collection of receivables which has grave implications for the generation and distribution companies and the establishment of a cost reflective tariff for the sector,” he said.

He subsequently noted that the policy reforms, “must however take into consideration, the need for less privileged Nigerians to gain access to affordable electricity to power their homes and small businesses.”

According to Osinabjo, the government has sunk in N1.5 trillion in the power sector as intervention in the last two years and would want the sector to become sustainable and self-operational.

He also explained that the government would rely on a functional power sector to help it take away 100 million Nigerians from poverty within 10 years.

“The liquidity challenges posed to the NESI since the privatisation of the assets of the erstwhile Power Holding Company of Nigeria (PHCN) are well documented, which is why it is indeed encouraging that the people in this room have decided it is time to address the issue head-on and identify sustainable solutions.

“The federal government of Nigeria continues to support this sector through the provision of various interventions. However, we all know that no government can thrive without the private sector playing its fundamental role in building on the foundations laid down by the government,” said Osinbajo.

He noted that even with the N1.5 trillion intervention to the sector by the government, it recognised that, “if the country is to achieve its aim of channelling funding to other critical sectors of the economy,” it needed to have some structural reforms in place to enable the sector fund itself sustainably.

According to Osinabjo, the government has also reiterated its desire to ensure that 100 million Nigerians currently living in poverty are salvaged from the situation, but that this, “cannot be achieved without a thriving power sector to galvanise industrial revolution for Nigeria.”