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FIRS to increase VAT after Senate confirmed minimum wage increase

The Federal Inland Revenue Service (FIRS) has announced it will increase the Value Added Tax (VAT) by between 35 and 50 per cent in 2019. This move comes a day after Nigerian legislature approved the N30, 000 minimum wage.

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Williams Babatunde Fowler

The Federal Inland Revenue Service (FIRS) has announced it will increase the Value Added Tax (VAT) by between 35 and 50 per cent in 2019. This move comes a day after Nigerian legislature approved the N30,000 minimum wage.

The Chairman of the Revenue service made the disclosure when he and other top officials in the Federal Ministry of Finance appeared before the Senate Committee on Finance in Abuja, on Tuesday, March 20, 2019.

The officials appeared before the committee to give details of the 2019-2021 Medium Term Expenditure Framework and Fiscal Strategy Paper, this is according to the News Agency of Nigeria.

The increase in the VAT, if in fact increased between 35 per cent and 50 per cent, the current five per cent will rise between 6.75 and 7.25 per cent.

Senate increases minimum wage increase

The hint of a possible increase in VAT was announced shortly after the Senate passed the National Minimum Wage Act (Amendment) Bill in which it approved N30, 000 as the new minimum wage for the workers in the country. As earlier reported, the members of the House of Representatives also agreed to the new wage bill.

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Making the minimum wage increase worthless: With the decision to increase VAT, the Federal Government has just shot a plane mid-air, crashing the relevance of the increment in minimum wage. This will affect the prices of household goods as well as increasing the cost of living, as VAT registered companies will transfer the VAT expense on its consumers by raising the value of their goods and services.

So as far as the VAT increase is likely to take effect in 2019, it’s back to square one for the Nigerian workers. The reason for the call to increase minimum wage was due to the inability of the N18, 000 to meet daily needs, but if the minimum wage and VAT are increased simultaneously, then Nigeria will for many years retain its position as the world’s poverty capital.

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Olalekan is a certified media practitioner from the Nigerian Institute of Journalism (NIJ). In the era of media convergence, Olalekan is a valuable asset, with ability to curate and broadcast news. His zeal to write was developed out of passion to shape people’s thought and opinion; serving as a guideline for their daily lives. Contact for tips: [email protected]

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Coronavirus

BREAKING: Lagos launches N5 billion support fund for 2,000 low-cost private schools

The Governor said the facility will benefit low-cost schools with amounts ranging from N500,000 to N5 million.

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Lagos State government has launched a N5billion support fund to help reduce the impact of Coronavirus pandemic on low-cost private schools in the state.

This was disclosed by the Governor of the state, Babajide Sanwo-Olu via his Twitter handle on Friday.

According to him, the educational sector is one of those severely impacted by the pandemic, with schools and vocational learning-centres shut since March.

He said, “With access to funding for privately owned schools and vocational training centres in the state, we are confident that this programme, under the partnership between First Bank Nigeria and Lagos State Education Trust Fund (LSETF) will help accelerate a sustainable return to learning and skills acquisition.”

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He explained that the facility will benefit 2,000 low-cost schools with amounts ranging from N500,000 to N5 million.

“As a responsible Government, we are obligated to provide interventions that would enable learners in schools study in line with the new normal,” the Governor Sanwo-Olu added.

The Chief Executive Officer, First Bank Nigeria, Dr Adesola Adeduntan, said “With this partnership, we are sure that registered educational institutions in Lagos State will have access to funds at subsidised interest rates to meet their needs as they reopen at this auspicious time.”

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Business News

Paga Group relocates to the UK

Oviosu announced that he is very excited about moving to and working with the UK government.

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Paga records over $2 billion worth of transactions in 2019 , Paga acquires Ethiopian-based startup, Apposit, announces Paga subsidiaries

Paga Group has redomiciled from Mauritius to the United Kingdom (UK). The group is the holding company for its operations in Nigeria, México, Ethiopia, and the UK.

This was disclosed by the Chief Executive Officer and founder, Paga, Tayo Oviosu on Friday.

Why it matters: The company took the decision due to bureaucratic challenges it faced last year.

He said, “The laws and courts of Mauritius are not very fast-moving, and the rules are difficult. I’ve had one court case that was eventually thrown out after a year.

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“In the UK it would have been thrown out immediately, and the person would have had to pay us for our lawyer fees.

“Basically, not an easy place to do business. It is more painful than useful. I say stick to good ol’ America or UK or Netherlands or Luxemburg. Where you know there are professionals, and the legal system works.”

Oviosu said he is very excited about the move, looks forward to working with the UK government to promote trade with the UK.

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The Paga Group has raised $34.7 million in funding so far, according to Crunchbase.

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Appointments

Stanbic IBTC Holdings Plc appoints Sola David-Borha as Non-Executive Director

Sola David-Borha has been appointed as a non-Executive Director to the board of Stanbic IBTC Holdings Plc.

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Stanbic IBTC Holdings Plc appoints Mrs Sola David-Borha as non-Executive Director

Stanbic IBTC Holdings Plc has announced the appointment of Mrs Sola David-Borha to its board as a Non-Executive Director, subject to the receipt of all required regulatory approvals.

In a statement issued by the company, signed by the company’s secretary Mr. Chidi Okezie and sent to the Nigerian Stock Exchange, stated that “Mrs. David- Borha is currently the Chief Executive, Standard Bank (Africa Regions). Prior to that, she served as Chief Executive of Stanbic IBTC Holdings PLC (2012-2017) as well as the Bank (2011-2012), after holding various executive positions in Corporate Banking; Corporate & Investment Banking; and Investment Banking Coverage for Africa (excluding South Africa). She is also an Independent Non-Executive Director on the Board of CocaCola Hellenic Bottling Company.”

She has a vast experience in the financial world and an astute board leader with a keen corporate governance. Sola has led and sat on various boards including being the former Vice Chairman for the Nigerian Economic Summit Group, subsidiaries of the Stanbic IBTC and Standard Bank Groups, Coca-Cola HBG A, and many others. She is also vastly educated having obtained MBA from the prestigious Manchester Business School and Bsc in Economics from the University of Ibadan. She is also an honorary fellow of the Chartered Institute of Bankers of Nigeria (CIBN).

Recall that Stanbic IBTC had earlier declared a Profit After Tax (PAT) of N45.2 billion for H1, 2020. Its gross earnings also increased by 7.8% to N126.57 billion with a basic earnings per share of 419 kobo and a proposed interim dividend payment of 40 kobo per share.

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