Home » Nigeria’s Federal Government Cracks Down on Illegal Mining and Tax Evasion

Nigeria’s Federal Government Cracks Down on Illegal Mining and Tax Evasion

The government aims to increase revenue, curb illegal mining, and develop the sector

by Motoni Olodun

Nigeria’s mining sector is facing a major shake-up as the federal government has warned states and local governments to stop collecting royalties and taxes from licensed miners operating in their domains. The government also said that miners and operators owe more than N2tn ($4.7bn) and urged them to pay up their debts.

The Minister of Solid Minerals Development, Dele Alake, made these statements in Kaduna on Thursday, where he met with members of the Licensed Minerals Holders, Laterite/Sand Operators Dealers. He said that the purpose of the meeting was to unveil the ministry’s plan for miners and operators for 2024 and to address the challenges facing the industry.

According to Alake, who was represented by the acting Zonal Mines Officer, North-West Zonal Office, Kutman Ali, the mining sector is a priority for the administration of President Bola Tinubu, who is determined to harness the potential of the sector as a major revenue earner and a driver of economic diversification.

He said that the federal government has the exclusive right to collect royalties and taxes on minerals obtained in the course of mining or exploration, as stipulated by the constitution and the Nigerian Minerals and Mining Act of 2007. He added that any state or local government that collects money in the name of royalty or mineral tax will have it deducted from their federal allocation.

He also said that the government has activated a Special Mines Task Force in Kaduna State, comprising of security and anti-corruption agencies, to clamp down on illegal mining and non-payment of royalties. He warned miners and operators against going to the field without a license and a permit to mobilize to the site, which can be obtained from the Mines Office in Kaduna.

He said that the government is committed to providing a conducive environment for mining activities, such as improving infrastructure, security, and access to finance. He also said that the government is working on a new mining policy that will address the issues of community development, environmental protection, and value addition.

He urged the miners and operators to cooperate with the government and comply with the rules and regulations of the sector. He also advised them to form cooperatives and associations to enhance their capacity and bargaining power.

The Chairman of the Miners Association of Nigeria, Kaduna branch, Ado Dogo, who was represented by the secretary of the association, Kashim Hussaini, said that the meeting was a welcome development and a platform for dialogue between the miners and the regulators. He said that the miners are facing various challenges, such as multiple taxation, insecurity, lack of infrastructure, and interference from state and local governments. He appealed to the government to address these challenges and support the miners to grow their businesses.

Nigeria has a rich endowment of mineral resources, such as gold, iron ore, coal, limestone, lead, zinc, tin, and gemstones. However, the sector has been neglected for decades due to the dominance of the oil and gas industry. The sector currently contributes less than 0.5% to the GDP, but the government aims to increase this to 3% by 2025.

The government has also launched several initiatives to revive the sector, such as the Presidential Artisanal Gold Mining Development Initiative, which aims to formalize and integrate artisanal gold miners into the formal economy, and the Dukia Gold and Precious Metals Refining Company, which is the first gold refinery in Nigeria.

The government hopes that developing the mining sector will create jobs, reduce poverty, and boost foreign exchange earnings. It also hopes that by curbing illegal mining and tax evasion, it will increase its revenue and reduce the environmental and social impacts of mining activities.

The government’s efforts have been commended by various stakeholders, such as the World Bank, the European Union, and the private sector, who have expressed their willingness to partner with the government to develop the sector.

However, the government also faces some challenges, such as insecurity, community conflicts, legal disputes, and low investment. The government will need to address these challenges and ensure that the mining sector is governed by transparency, accountability, and sustainability.

The mining sector has the potential to transform Nigeria’s economy and improve the lives of millions of Nigerians. The government’s plan for 2024 is a step in the right direction, but it will require the cooperation and commitment of all stakeholders to make it a reality.

Source: BusinessDay NG

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