Nigeria’s trade with Malta reached an all-time high in the third quarter of 2024, with imports valued at N766.81 billion, according to the latest data from the National Bureau of Statistics (NBS).

The sharp rise is particularly striking as there were no recorded imports from Malta in the first half of the year. This surge has reignited debates about Nigeria’s dependency on imported fuel and allegations of industrial sabotage, even as the Dangote Refinery begins production.

The NBS report revealed that Malta was Nigeria’s fifth-largest import trading partner in Q3 2024, accounting for 5.23% of the country’s total imports valued at N14.67 trillion for the quarter. This figure places Malta behind China, India, Belgium, and the United States in Nigeria’s import rankings.

The record-breaking imports from Malta came when Nigeria was expected to reduce its reliance on foreign fuel imports. With the Dangote Refinery commencing operations, many had anticipated a shift toward domestic refining to meet the country’s petroleum needs. Instead, the sharp rise in imports suggests Nigeria remains significantly dependent on external sources for refined petroleum products.

Economists and industry observers argue that the development highlights structural challenges in Nigeria’s oil and gas sector. The continued importation of fuel underscores inefficiencies and potential disruptions that may be undermining domestic production capacity.

Aliko Dangote, chairman of Dangote Industries Limited, has not been silent about his concerns regarding the state of Nigeria’s oil industry. He has accused actors within the industry, including regulators, of deliberately sabotaging his refinery’s operations. According to Dangote, certain individuals within the Nigerian National Petroleum Company Limited (NNPCL), oil traders, and terminal operators have vested interests in maintaining Nigeria’s dependency on imported fuel.

Dangote specifically pointed to a blending facility in Malta, alleging that it was established by NNPCL personnel in collaboration with international oil traders. The facility, which lacks refining capabilities, reportedly blends oxygenates with motor gasoline and other components to produce finished fuel.

Dangote stated that this setup is designed to bypass domestic refining efforts and sustain Nigeria’s reliance on imported fuel, thereby undercutting the potential impact of his refinery.

However, Mele Kyari, Group Chief Executive Officer of NNPCL, has categorically denied these allegations. Kyari stated that NNPCL has no ties to the blending plant in Malta or similar facilities worldwide. He also dismissed claims that the company’s employees are complicit in any sabotage efforts, describing the allegations as baseless.

Kyari further emphasized that NNPCL remains committed to supporting Nigeria’s energy transition and enhancing local refining capacity. However, given the rising imports from Malta and the lack of transparency in the country’s oil trade, many believe there are deeper systemic issues that require urgent attention.

The trade between Nigeria and Malta began only in the second quarter of 2023, with imports valued at N181.55 billion. By Q3 2023, the figure had surged to N561.37 billion, representing a 209.2% increase from the previous quarter. However, the upward trend was briefly interrupted in Q4 2023, when imports fell to N291.98 billion.

In 2024, imports from Malta remained nonexistent in the first half of the year, making the Q3 surge to N766.81 billion even more conspicuous. This figure not only surpasses previous quarterly records but also accounts for 74.1% of the total imports from Malta recorded throughout 2023.

The continued high volume of fuel imports, particularly from Malta, has raised questions about Nigeria’s ability to fully harness the Dangote Refinery’s potential. Dangote has called for regulatory reforms and stricter oversight to address what he describes as systemic sabotage. He also urged the government to prioritize domestic refining as a strategic imperative for economic growth and energy security.

The presidential proposed tax reform bills have sparked significant debate across Nigeria, as opposition, particularly from Northern Nigeria, has focused on fears that the reforms could exacerbate economic hardship and leave the region impoverished.

These, among other misconceptions about the reforms, have necessitated clarifications. Responding to these concerns, Taiwo Oyedele, Chairman of the Presidential Tax and Fiscal Policy Reforms Committee, has moved to reassure Nigerians that the reforms aim to benefit the entire country, not to create additional economic strain.

Oyedele, tasked with steering the tax reform process, has dismissed these fears as misconceptions, emphasizing that the reforms are designed to strengthen Nigeria’s fiscal framework, promote equity, and reduce inefficiencies in the tax system.

According to him, the proposed changes will not impoverish any region but instead ensure that all parts of the country benefit from improved revenue mobilization. In a post detailing the benefits of the tax reforms shared via social media on Monday, Oyedele argued that the reforms are necessary to correct long-standing imbalances in the country’s tax policy.

Addressing concerns about the potential impact on economic hardship, Oyedele stated that the reforms have been carefully designed to prioritize fairness and efficiency. He noted that they include measures to protect vulnerable populations while ensuring that wealthy individuals and corporations contribute their fair share to the economy.

Below, he shared the benefits of the tax reforms.

The Tax Reforms Will Benefit You In Many Ways – Here is How

A. Households and individuals including the youth:

1. Complete exemption of low-income earners up to N1m p.a. (about N83k per month) from PAYE
2. Reduced PAYE tax for those earning a monthly salary of N1.7m or less
3. Zero (0%) VAT on food, healthcare, education, electricity generation and transmission
4. VAT exemption on transportation, renewable energy, CNG, baby products, sanitary towels, rent and fuel products
5. Tax break for wage awards and transport subsidies to low-income earners
6. Tax incentives for employers to hire more people incrementally than in the previous 3 years
7. Exemption of stamp duties on rent below N10m
8. PAYE tax exemption for other rank and armed forces fighting insecurity
9. Friendly tax rules for remote workers and digital nomads
10. Clarity on taxation of digital assets to avoid double taxation and allow a deduction for losses

B. Small Businesses:

1. Increase in tax exemption threshold for small businesses from an annual turnover of N25m to N50m
2. Exemption from company income tax for small businesses (tax at 0%)
3. No withholding tax deduction on business income of small businesses
4. Exemption from the requirement to deduct and account for tax on payments to vendors
5. Simplified statement of accounts attested to by small business owners for tax returns in place of audited financial statements
6. Introduction of the Office of Tax Ombud to protect taxpayers against arbitrary tax assessments
7. Tax disputes affecting businesses to be resolved within 14 days by the Tax Ombud
8. Harmonization of taxes and repeal of multiple levies
9. Outlaw cash payment and physical roadblocks imposing a burden on businesses
   10 Attractive tax regime to encourage formalization of business and facilitate growth

C. Businesses and investments:

1. Reduction of corporate income tax rate from 30% to 25% and harmonization of earmarked taxes at a reduced rate
2. Unilateral tax credit for income earned abroad to avoid double taxation and input VAT credit on assets and services to reduce the cost of production
3. Introduction of economic development incentive for priority sectors
4. Friendly tax regime for business restructuring and reorganization to improve efficiency
5. Clarity on the 6-year statute of limitation and resolution of objections in favor of the taxpayer if tax authority fails to respond within 90 days
6. Option to pay taxes and levies on foreign currency-denominated transactions in Naira
7. Faster tax refunds within 90 days (30 days for VAT refunds) with the option of set-off against any tax liability of the taxpayer.
8. Request for an advance ruling by a taxpayer to be provided by tax authority within 21 days
9. Expenses incurred by a start-up within 6 years pre-commencement of business to be tax deductible
10. Restriction of interest deduction will only apply to related party loans in order to reduce the cost of finance for businesses

D. High-Income Earners and HNIs:

1. Tax exemption on personal effects not exceeding N5m, sale of a dwelling house, and up to two private vehicles
2. VAT exemption on purchase of real estate
3. Clarity on taxation of benefit in kind and limit of taxable accommodation benefit to 20% of annual income
4. Exemption of tax on the sale of shares up to N150m and gains not exceeding N10m
5. Progressive personal income tax rate up to 25% for HNIs
6. Tax exemption on compensation for loss of employment not exceeding N50m
7. Progressive VAT rate on items mostly consumed by high-income earners to partly compensate for exemption on essential consumptions
8. Tax exemption for income earned on bonds issued by states in addition to federal government bonds
9. Reduction in the corporate tax rate for businesses and a tax break for hiring more people
10. Exemption of tax on bonus shares for investors in Nigerian companies.

E. Subnational government:

1. Federal government to cede 5% of VAT revenue to states
2. Transfer of income from Electronic Money Transfer levy exclusively to states as part of stamp duties
3. Repeal of the obsolete stamp duties law and re-enactment of a simplified law to enhance the revenue for states
4. States to be entitled to the tax of Limited Liability Partnerships
5. Tax exemption for state government bonds to be at par with federal government bonds
6. More equitable model for VAT attribution and distribution
7. Integrated tax administration to provide tax intelligence to states, strengthen capacity development and collaboration, and scope of Tax Appeal Tribunal to cover taxpayer disputes on state taxes
8. Powers for AGF to deduct taxes unremitted by a government or MDA and pay to the beneficiary government
9. Framework to grant autonomy for states’ internal revenue service and enhanced Joint Revenue Board to promote collaborative fiscal federalism
10. Legal framework for taxation of lottery and gaming, and introduction of withholding tax for the benefit of states

There is something in the tax bills for everyone.