In a resolute move to combat tax evasion and enforce regulatory compliance, the Corporate Affairs Commission (CAC) of Nigeria is poised to delist a staggering 91,843 companies from its register for neglecting to submit their annual returns.

This stern action by the government agency reflects a commitment to holding businesses accountable and curbing tax irregularities.

A tax return is a crucial document filed with a tax authority, detailing income, expenses, and other pertinent tax information. It enables taxpayers to compute their tax liability, schedule payments, or seek refunds for overpaid taxes. In many jurisdictions, individuals and businesses with reportable income, encompassing wages, interest, dividends, capital gains, or other profits, must annually file tax returns.

The CAC, in a list published on its website, unveiled the names of the companies slated for delisting. The figure of 91,843 is marginally lower than the initial count of 94,581 released in August. Notably, this reduction is also beneath the previously announced 100,000 companies earmarked for removal, underscoring the stringent approach adopted by the CAC.

Garba Abubakar, the Registrar-General and CEO of the CAC, had declared in July that the commission would expunge 100,000 registered businesses from its database due to their failure to file annual returns. Abubakar emphasized adherence to section 692 of the Companies and Allied Matters Act (CAMA) of 2020, noting that affected companies would receive notices before any action was taken.

“Further to its earlier notice of the commencement of striking off the names of Companies from the Register of Companies and published on August 2, 2023, the Commission hereby notifies the General Public that the list of Companies that have failed to comply with the provisions of the Companies and Allied Matters Act 2020, to file up to date annual returns is now ready for publication in accordance with the provisions of Section 692 of the Act,” he said.

In an update on December 5, the CAC reiterated its intent to strike off companies that did not comply with the CAMA 2020 provisions regarding annual returns. The commission urged companies that had submitted complete annual returns in response to the earlier publication to verify their removal from the delisting list. The updated list is available on the commission’s website.

The CAC also outlined a process for businesses erroneously included in the list to rectify the situation. Companies that had filed full annual returns but remained on the list were instructed to email compliance@cac.gov.ng within 30 days, providing proof of filing. Additionally, the CAC emphasized that companies removed from the register cannot engage in business activities until the Federal High Court orders their reinstatement.

The taxable year in Nigeria aligns with the fiscal year, spanning from January 1 to December 31. The CAC requires the submission of tax returns to the relevant tax authority within 90 days of the fiscal year’s conclusion.

Businesses with an income of NGN 30,000 or less are exempt from mandatory tax return filing. Moreover, every employer is obligated to submit a return of all emoluments paid to employees by January 31 each year, covering the preceding year’s employment.

In a fervent pursuit of fiscal transparency and accountability, BudgIT Foundation, a prominent civic-tech organization in Nigeria, has intensified its critique of the proposed 2024 budget presented by President Bola Tinubu to the National Assembly.

Flagging what they describe as alarming discrepancies and crucial omissions, BudgIT called for an urgent review of the budgetary allocations.

Nancy Odimegwu, the Communications Associate at BudgIT, emphasized the organization’s concerns, recalling their earlier warnings to the Tinubu administration regarding budgetary practices detrimental to Nigeria’s progress. She said the foundation itemized ten plagues that the Tinubu administration should avoid in the 2024 budget and budget process to ensure value for money, curb expenditure inefficiency and waste, enforce accountability, and put Nigeria on the pathway of prosperity, economic growth, and development.

“Unfortunately,” Odimegwu stated, “our review of the proposed 2024 Appropriation Bill reveals that some deleterious budget practices from previous regimes persist, fostering corruption, underdevelopment, unemployment, and multidimensional poverty.”

“One significant observation is the absence of crucial budget breakdowns from the National Assembly, Government-Owned Enterprises, and some Ministry Departments and Agencies in the 2024 budget proposal.

“For instance, there is no breakdown of the National Assembly, the Niger Delta Development Commission and the North East Development Commission’s budget.

“For emphasis, the budgets of key revenue-generating government entities-including the Nigeria Ports Authority, Nigeria Customs Service, Nigerian Maritime Administration and Safety Agency (NIMASA), National Petroleum Investment Management Services (NAPIMS), Nigerian Security Printing and Minting Plc (NSPM), to mention a few-are conspicuously missing from the proposed 2024 budget presented to the National Assembly,” she added.

“Furthermore, the proposed budget’s total sum is N24.08 trillion, indicating a discrepancy of N3.42 trillion compared to the N27.5 trillion aggregate budget presented. We suspect that the difference above comprises the aggregate budgets of the Government-Owned Enterprises.”

The foundation highlighted significant gaps in budget breakdowns, specifically calling out the absence of critical financial details from entities such as the National Assembly, Government-Owned Enterprises (GOEs), and various Ministries, Departments, and Agencies (MDAs). Notably, the budgets of key revenue-generating entities like the Nigeria Ports Authority, Nigeria Customs Service, and others were conspicuously missing.

A startling N3.42 trillion discrepancy was identified in the proposed N24.08 trillion budget, indicating potential hidden allocations within GOEs. BudgIT stressed the urgency for disaggregated revenue and expenditure details from these entities, historically absent from formal budget presentations.

BudgIT also highlighted unfulfilled promises, pointing out that former President Buhari pledged to include MDA and GOE budgets in the annual appropriation bill for public defense and assent. These promises remained unfulfilled, carrying over into the current administration’s practices, indicating a glaring need for increased transparency in GOEs’ budget implementation.

The foundation’s detailed analysis uncovered duplications in allocations, particularly in renovations to presidential and vice-presidential quarters. A staggering N28.3 billion was allocated for these purposes, surpassing the combined capital budgets of key ministries, raising eyebrows regarding the allocation of funds.

“Similarly, the Vice President’s quarters in Lagos and Abuja, which got a cumulative sum of N5.5 billion in the 2023 supplementary budget for renovation, equally got allocations of N4 billion, N300 million, and N5 billion each in the 2024 budget.

“Cumulatively, the President and Vice President have a total allocation of N28.3 billion to either renovate or construct their quarters in Lagos and Abuja and another N10 billion to digitize those quarters,” it said.

Moreover, concerns were raised about the budget’s borrowing plans of $7.8 billion and €100 million (approximately N6 trillion) to fund the Medium-Term Expenditure Framework (MTEF). BudgIT questioned the rationale behind seeking approval to borrow for future budgets that currently do not exist, urging for more realistic and pragmatic revenue projections aligned with fiscal realities.

“Additionally, the proposed Appropriation Bill indicates plans to borrow $7.8 billion and €100 million (approximately N6 trillion) to fund the Medium-Term Expenditure Framework (MTEF).

“The Federal Government has projected a foreign borrowing of N1.77 trillion to finance the fiscal deficit of the 2024 budget; hence, should the government be seeking approval to borrow to fund budgets (2025 and 2026) that are not currently in existence?

“Another concern is the revenue projections, which have generally been ambitious and unmet, even in aggregate. The budget needs revenue projections aligned with fiscal realities, which must be done realistically and pragmatically,” BudgIT stated.

Drawing attention away from unreliable sources like net oil revenue, BudgIT emphasized the need for a broader fiscal focus. They highlighted the exponential growth of the service-wide vote, reaching N4.41 trillion in the 2024 budget, containing vague budget lines prone to impropriety and corruption.

“In addition, the service-wide vote provision contains budget lines that should be captured within MDAs’ budgets and vague budget lines that create loopholes for impropriety and/or corruption,” it said.

“For example, the service-wide vote envelope in the 2024 appropriation bill contains N108 billion for “special projects” with the project code “ERGP9213044.

“To worsen the situation, the federal government budget implementation reports often contain no information on how service-wide votes are utilized.”

Urging the National Assembly to recognize the budget’s pivotal role as a policy instrument, BudgIT called for a comprehensive review prioritizing economic growth, poverty reduction, infrastructure development, and human capital investment. Their unwavering stance aimed to steer Nigeria toward a transparent and accountable fiscal future.

In a bid to bolster the 2024 budget, Nigeria’s Minister of Finance and Coordinating Minister of Economy, Wale Edun, has indicated that the Federal Government may seek additional appropriations from the National Assembly if the country experiences robust revenue performance next year.

Edun made this announcement on Monday, during his appearance before the Senate Committee on Finance to defend his ministry’s budget.

The minister, who also disclosed that the 2023 supplementary budget would be executed concurrently with the 2024 budget, outlined the government’s strategy, stating that savings would be utilized to enhance the availability of funds for the 2024 budget. He said the budget would be increased to reflect the government’s commitment to addressing economic needs and priorities.

The Senate Committee urged the finance minister to eliminate bottlenecks causing delays in budget implementation once passed. Chairman Sani Musa expressed concerns over the sluggish progress in executing the 2023 supplementary budget.

President Bola Tinubu presented the 2024 budget estimates of N27.5 trillion to the National Assembly on November 29, 2023. The budget breakdown included recurrent non-debt expenditure at N9.92 trillion, capital expenditure at N8.73 trillion, debt service at N8.25 trillion, revenue at N18.32 trillion, new borrowings at N7.83 trillion, and a deficit at N9.18 trillion.

The President projected economic growth at 3.76%, with an expected moderation of inflation to 21.4% in 2024.

Edun emphasized the importance of fiscal policy review and tax reforms to augment revenue generation. He assured that the government is not trying to increase, or introduce new taxes but enact reforms that will boost tax revenues.

He stressed that these measures would not only fortify the nation’s economy but also attract domestic and foreign direct investments, fostering job creation and wealth generation.

This development is coming amid growing criticism of the 2024 budget dubbed ‘Budget of Renewed Hope’ by experts, who believe it lacks the wits to address Nigeria’s current economic challenges.

Last week, Ben Akabueze, the Director-General of the Budget Office of the Federation, said that the proposed N27.5 trillion budget for 2024, awaiting approval in the National Assembly, is “too small” to adequately address Nigeria’s economic needs.

“I’m always first to acknowledge that the budget of the Federal Government of Nigeria is way too small relative to our needs and our requirements but it is now a case of cutting out coats according to our cloth rather than our size,” noted Akabueze.

Besides this concern, prominent Nigerians have expressed worry over the features of the budget, with some calling it extravagant. Peter Obi, the Labour Party presidential candidate in the last general election, said the priorities outlined in the budget fail to tackle the most pressing need of Nigerians, citing significant allocation for trips and renovations.

Obi urged a comprehensive review and revision of the budget to align with the urgent needs of the country.

BudgIT Foundation, a prominent civic-tech organization advocating for transparency, accountability, and efficient service delivery in Nigeria, has voiced apprehensions regarding the 2024 budget proposed by President Bola Tinubu and presented to the National Assembly for approval.

The organization said it identified what it deems as alarming issues and discrepancies within the 2024 budget, prompting a call for a thorough review of its contents.

“Unfortunately, having reviewed the proposed 2024 Appropriation Bill breakdown, we observed that the Bola Ahmed Tinubu administration has continued with some deleterious budget practices from previous regimes that have fostered corruption, underdevelopment, unemployment, and multidimensional poverty,” the foundation said.

The budget assumptions and Nigeria’s economic realities

Besides the backdrop of volume and features, the budget is significantly based on economic assumptions that experts fear may not be attained. For instance, the budget’s projections anticipate an average crude oil price of $73.96 per barrel in the global market and Nigeria’s oil production at an average of 1.78 million barrels per day, with an estimated exchange rate of N700/$1.

However, these forecasts contrast starkly with the current realities of underwhelming oil output, the weakening performance of the naira in the forex market, and a persistent upward trend in inflation.

Since 2022, Nigeria has struggled to maintain a daily oil production average of 1.2 million barrels per day. Achieving a significant daily increase of over 500,000 barrels within a year poses a considerable challenge, particularly considering the recent decline in oil production, illegal refining activities, oil theft, and a lack of confidence in the government’s capacity to reverse these detrimental economic trends.

Though there has been an uptick in oil production recently, with about 1.5mbd, the Nigerian National Petroleum Company Limited (NNPCL) said on Tuesday that Nigeria recorded 127 crude oil theft incidents between December 2 and 8, underscoring a possibility of production decline.

Also, the realities are stacking up against the N700/$1 exchange rate projection made in the budget. As of Tuesday, the naira is trading at N864.29/$1 at the official market and N1,210/$1 at the parallel market.

With the government’s efforts to boost dollar liquidity yet to yield the desired results, experts have called for the 2024 budget to be reviewed in line with the nation’s economic realities.

“We call for a comprehensive review that prioritizes broad-based economic growth, reduces inequality, addresses poverty, tackles insecurity, bridges Nigeria’s infrastructure gap, and invests in human capital development,” BudgIT said.