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FIRS explains how it plans to achieve N1.8 trillion VAT target for 2017

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The Executive Chairman of the Federal Inland Revenue Service (FIRS), Mr Tunde Fowler, stated that the service has automated VAT collection for the critical sectors of the economy as one of the means towards realising the targeted N1.8 trillion VAT for 2017.

He made this remark while defending the 2017 budget of the service before the Senate Committee on finance on Tuesday in Abuja.

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The Federal Inland Revenue Service (FIRS) has projected N1.8 trillion Value Added Tax (VAT) collection for 2017 fiscal year.

Fowler said the budget was aimed at increasing VAT and other non-oil revenue. He said that VAT was meant to increase from an actual of N828 billion to a budget of N1.8 trillion, which is over 125% increase.

The Service, in realisation of this responsibility and challenges of doing manual collection, has automated VAT collection for the critical sectors of the economy, notably telecommunications, airlines and financial institutions, he said.

Fowler said that the service had proposed to achieve the tax revenue target as derived from the 2016-2018 Medium Term Revenue Framework (MTRF) for 2017, amounting to a total of N4.89 trillion.

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On budget parameter, Fowler said that the 2017 projected cost of collection of N153 billion was higher than the 2016 approval estimate which stood at N144 billion.

The figure, he said, represented a cost of collection increase of 6.63% on overall projected non-oil revenue, including VAT, stamp duties and levy.

Revenue projections

On the revenue projections performance for the period January to June 2017, the FIRS boss said that the analysis showed that the service had recorded an increase of N224 billion.

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He said this represented an overall increase of 14 per cent in 2017, compared with collection performance for the corresponding period in 2016.

We have achieved 72.93% of our half year target of N2.44 trillion for 2017 as against 74.2% of N2.1 trillion for the corresponding period in 2016.
The chairman may note that we attained this collection performance despite several challenges.
We have continued to vigorously pursue our strategies internally, while improving collaboration with relevant stakeholders to boost our collection.
The strategies put in place are on course and progressively yielding fruits. We are hopeful, therefore, that the efforts being made will translate to significant tax yields before the end of 2017, he said.

The Chairman Senate Committee on Finance, Sen. John Enoh, spoke on the need for the FIRS to work to achieve the approved target.

He said, with a deficit of over N2 trillion, if the service failed to meet its target, it would impact negatively on the implementation of the 2017 budget.

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The lawmaker suggested the need for a mid-term engagement between the committee and the service to block loopholes.

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Tech News

3 startups to get N3 million grant each in the COVID-19 virtual hackathon 

The hackathon hopes to identify accessible and cost-effective E-Learning solutions for public schools.

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The Nigerian Communications Commission has announced that 3 finalist startups will get a grant of N3 million each at the end of the COVID-19 virtual hackathon 

These three startups will be selected from submitted entries that meet all the criteria and provide adaptable digital solutions for addressing the present and future impacts of pandemic and epidemic diseases 

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The solutions must be novel, clearly explained, with proof of concept  

NCC announced this through a statement published on its Twitter handle.  

The grant, it said, will enable the three startups with the most promising digital solutions to produce a prototype within 2 months of receipt.  

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According to the statement, submitted entries are expected to provide solutions in sectors such as health, digital communications, education, transportation.  

For those in health, the solutions should find a way to empower frontline healthcare workers or prevent, trace, and contain the spread in Nigeria.  

Solutions in digital communications are expected to aid the sustenance of economic activities and people-to-people communication while encouraging social distancing without compromising productivity. 

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The hackathon also hopes to identify accessible and cost-effective E-Learning solutions for public schools, as well as improved safety measures in public transportation in Nigeria.  

Interested tech hubs, startups and innovative digital SMEs can still submit entries on or before July 17, 2020.  

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Financial Services

CBN expands scope of regional banks in Nigeria, gives compliance timeframe

The aim of this directive is to expand the reach of the regional banks across the country, the CBN said.

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Regional Banks

The Central Bank of Nigeria (CBN) has expanded the scope of regional banks in the country, by requiring them to open branches in at least one additional geopolitical zone outside of the existing geopolitical zones where their operating licenses cover.

A circular that was issued earlier this week by the apex bank said this new directive is in accordance with “section 8 (g) of the CBN Scope, Conditions & Minimum Standards for Commercial Banks Regulations no [1] 2010 as revised on September 4, 2019.” 

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The new directive took effect on Friday, June 26, 2020. In other words, all the regional banks are expected to have become aware of this development since then. They now have a timeframe of six months to establish their presence in the geopolitical zones outside of where they currently operate.

It should be noted that prior to this time, regional banks in the country typically operated in at least two geopolitical zones of the federation. However, in line with the new expansion, the CBN shall now prescribe an additional geopolitical zone for each of these regional banks, thereby making the coverage area three geopolitical zones per regional bank.

Meanwhile, the CBN said the aim of this directive is to expand the reach of the regional banks across the country, whilst ultimately promoting financial inclusion. Note also that the new directive affects all regional banks, both the ones engaged in commercial banking and non-interest banking. Some part of the circular said:

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“Effective the date of this circular, all banks with regional authorisation shall be required to operate from one additional geopolitical zone as may be prescribed for each institution by the CBN, without prejudice to the existing requirement of the minimum of two (2) geopolitical zones of the federation. The essence is to promote spread and balance of the regional banks across the country.

“The compliance timeline to establish operational footprint at the advised zone shall not exceed six (6) months from the issuance of the regulatory advice to each regional bank by the CBN.”

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Economy & Politics

Nigerian and US Authorities battle former Enron Nigerian Subsidiary over $80 million Yacht

Both Nigerian and American governments have opposed Enron Nigeria’s appeal. 

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19 years after the bankruptcy of Enron Corporation, one of the biggest corporate bankruptcies in American history, a former subsidiary of the company is battling Nigerian and American Authorities over the sale of a yacht valued at over $80 million acquired by Nigerian businessman Kolawole Aluko. 

The yacht was seized by the US Government in 2018 after prosecutors say it was bought with the proceeds of bribes paid to Nigeria’s former Minister of Petroleum, Diezani AlisonMadueke. 

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The yacht was later auctioned for $37 million in 2019. The Nigerian government also dropped claims to the proceeds of the sale recently and a Texas Court ordered all proceeds should be retained by the US Government. 

However, a former unit of the Bankrupt Enron, Enron Nigeria Power Holdings claims its entitled to the proceeds and demands $22 million in a bid to get an arbitration awarded to them against the Nigerian government for suspending a contract signed with Enron in 1999 to build and operate a Power plant. 

(READ MORE: Nigeria leads Africa combined in Q2 2020 on BTC P2P)

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Enron Nigeria claims the Nigerian government dropped claims to the proceeds of the yacht’s auction in an attempt to fraudulently transfer assets to stop creditors from accessing them. Saying Nigeria dropping its claims was a recognition of the factual and legal basis” in a DOJ court filing. 

Both Nigerian and American governments have opposed Enron Nigeria’s appeal. 

Enron Nigeria Power Holdings Ltd is owned by ex-Enron staff involved in the negotiations for the Power Plant contract in Nigeria and was bought out of bankruptcy for $750,000 in 2004 by a Cayman Islands registered company. 

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An arbitration ruling in 2012 awarded Enron Nigeria Power Holdings $11.2 million including interest in damages against the Nigerian government. 

The DOJ says Mr. Aluko bought the yacht for $82 million in 2013 and funded a lavish lifestyle for Alison Madueke in exchange for NNPC contracts valued at over $1.5 billion. 

Aluko and his business partner, Olajide Omokore are also accused of laundering illicit revenues into and through the United States

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