State and local governments in the country earned N8.79 billion in revenue from solid minerals in 2020. This was disclosed in the Nigerian Extractive Industry Transparency Initiative (NEITI) report on solid minerals.
Most of the revenue was generated from pay-as-you-earn (PAYE), as PAYE accounted for 98.6% (N8.67 billion) of the revenue from solid minerals to sub-national governments.
Revenue generated from income tax could be higher but out of 102 companies that operated in 2020, only 55 of them paid income tax in 2020. Julius Berger Plc remitted the highest amount as PAYE at N6.39 billion as PAYE. and these payments make up 73.7% of the total PAYE collected by state governments.
READ ALSO: Solid Minerals Artisanal; Small-Scale Miners Hit 1273 in 2020
N763.02 million was remitted by Dangote Cement Plc, and Lafarge Plc remitted N594.13 million. The amount paid by Dangote Cement Plc and Lafarge Plc made up 8.8% and 6.9% of the total.
Analysis shows that income tax payments from the top seven companies amounted to N8.4 billion and accounted for 96.9% of the total received.
Of the 102 companies operating at different local governments across the country, only 9 remitted revenue to local governments. This amounted to N122.27 million collected as tenement (property) rates.
Lafarge Plc paid N55 million as property rates, accounting for 44.98% of N122.27 million.
Contributing 39.09%, Dantata and Sawoe Nigeria Limited paid N47.79 million. Venus Mining Co.Ltd, Mothercat Nig Ltd, and Monkey Rock Nig. Ltd paid N9 million, N4.45 million, and N2.8 million, respectively. Their payments made up 7.36%, 3.64%, and 2.29%, respectively.
According to the the Extractive Industry Transparency Initiative (EITI) standard requirements 4.2 to 4.5, sub-national governments should have generated more revenue.
Requirement 4.3 stipulates the revenue to state governments from infrastructure and barter arrangements. These agreements involve providing goods and services (including loans, grants, and infrastructure works), in full or partial exchange for oil, gas or mining exploration, production concessions, or physical delivery of such commodities.
In requirement 4.4, revenue from the transportation of the product along various routes is to be collected by the government. This revenue includes transportation taxes, tariffs, or other relevant payments. Requirement 4.5 involves payments to state-owned enterprises by companies involved in mining resources.
Although, sub-national governments also earned revenue from the sales of the state’s production shares or revenue collected in kind as provided for in requirement 4.2 of the EITI standard 2019, they didn’t earn any revenue as stated in requirements 4.2 to 4.5 of the EITI standard 2019.The inability of the sub-national governments to receive revenue from infrastructure and barter arrangements, transportation revenue, transactions with state-owned enterprises, and the sales of state-owned shares affected their revenue pool. This revenue leakages has increased the dependence of the sub-national governments on the federation account allocation.