PENGASSAN warns JTB to ‘stay away’‎ from pension contribution

The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has advised the Joint Tax Board ((JTB) and some state boards of internal revenue against interfering in the voluntary Contributory Pension Scheme as entrenched in the Pension Reform Act of 2014 and the 2015 amendment.

The union said that it believed that such an interference could ‘jeopardise’ the relatively industrial peace in the country.

The caution is in reaction to an advertisements placed by the tax bodies in some national dailies, threatening to impose taxes on withdrawals by workers from their voluntary contributions, the senior staff association in the oil and gas industry stated that this was contrary to the Pension Reform Law.

In a statement signed by the National Public Relations Officer of PENGASSAN, Comrade Fortune Obi, the union said it was the responsibility of the National Assembly to amend any section of the Act as deemed fit, and that of the Judiciary to provide interpretations where necessary.

“Hence, it will be provocative for the JTB or state tax boards to unilaterally usurp the powers of the legislature and the judiciary by its planned and illegal move to tax such withdrawals.

The tax authorities should be reminded that tax avoidance is the arrangement of one’s financial affairs to minimise tax liability within the scope allowed by law and is distinct from tax evasion, which implies the illegal non-payment or underpayment of tax due,” he stated.

Obi cited Section 4(3) of the PRA 2014, which provides: “Any employee to whom this Act applies may, in addition to the total contributions being made by him and his employer, make voluntary contributions to his retirement savings account.”

“Section 10(4) of the Act further provides that ,“… Any Income earned on any voluntary contribution made under Section 4(3) of this Act shall be subject to tax at the point of withdrawal where the withdrawal is made before the end of five years from the date the voluntary contribution was made.”

He noted that with these clear provisions, it is obvious that the tax authorities are over-stepping their bounds by attempting to place restrictions on withdrawals against the express provisions of the law.

The PENGASSAN spokesperson said the association had concerns with some aspects of the law, but it has refrained from taking the law into its hands by resorting to self-help as the tax authorities are attempting to do.

“As a law-abiding association, we are waiting for a time when the National Assembly to initiate an amendment process, so that we can make our inputs into the process; and we hope that all stakeholders would toe the part of peace and honour.

On the other hand, if they cannot wait for such a time, then the appropriate thing is to approach the law courts to determine the legality or otherwise of the current provisions.

He restated the PENGASSAN’s commitment to defend workers should the tax authorities go ahead with their threats to deprive workers from accessing fully their voluntary contributions as and at when needed.

He added: “However, we remain committed to dialogue with a view to resolving whatever differences may exist between our association and other stakeholders.”