Federal Government Prohibits States and Local Governments from Collecting Mining Royalties
The Federal Government has issued a stern warning to states and local governments, urging them to cease the collection of royalties and taxes from licensed miners operating within their jurisdictions. Minister of Solid Minerals Development, Dele Alake, conveyed this directive during a meeting with members of the Licensed Minerals Holders, Laterite/Sand Operators Dealers in Kaduna. He emphasised that miners and operators collectively owe the Federal Government over N2 trillion, with specific mention of the over N300 billion owed in Kaduna alone.
Alake clarified that the exclusive responsibility of paying royalties and taxes rests with the Federal Government, underscoring that states and local governments are not authorised to levy these charges. He cautioned that any state or local government found collecting funds under the guise of royalties or mineral tax will face deductions from their federal allocation. The minister made it explicitly clear that while states and local governments may collect other taxes, such as ground rent, they are not permitted to collect royalties and taxes related to mining activities.
Furthermore, Alake underscored the government’s unwavering commitment to eradicating the operations of illegal miners across the nation, labelling their activities as unacceptable and detrimental to the country. In alignment with this objective, a Special Mines Task Force, comprising personnel from various law enforcement agencies, has been activated in Kaduna State to crack down on illegal mining activities and non-payment of royalties. He also admonished miners and operators against conducting field operations without a valid licence, emphasising the importance of obtaining the necessary permits from the Mines Office in Kaduna.
The Chairman of the Miners Association of Nigeria, Kaduna branch, Ado Dogo, reiterated the significance of the dialogue between miners and regulators in addressing the challenges facing the mining sector. He expressed the frustration experienced by miners who encounter obstacles from state and local authorities, despite their contributions to the federation account.
The implementation of the directive to prohibit states and local governments from collecting mining royalties and taxes is a pivotal step in ensuring the uniformity and efficiency of the mining sector in Nigeria. The Federal Government’s firm stance against illegal mining activities and debt owed by operators demonstrates a commitment to regulation and fair practices within the mining industry.
It is imperative for all stakeholders, including state and local authorities, to adhere to the regulations outlined by the Federal Government to ensure the sustainable and responsible development of the mining sector. By aligning with these regulations, the Nigerian mining industry can thrive and contribute significantly to the nation’s economy.
