Companies operating within the shores of Nigeria will soon have an extra cost to worry about, no thanks to the Nigerian Police Trust Fund Act which President Muhammadu Buhari recently signed into law. Now, PwC Nigeria is expressing mixed reactions to the development.
What you should know: The Nigerian Police Trust Fund Act specifies the imposition of a 0.005% levy on every Nigerian company’s net profit. Also, 0.5% of the total revenue accruing to Nigeria’s Federation Account will be added to the fund. The aim here is akin to every other trust fund there is, in that the assets accumulated will be held in trust and used for the purposes of training police personnel and procurement of needful police equipment.
The fund will have a duration of six years, during which time a Board will be constituted and charged with the responsibility of overseeing it. Specifically, the responsibilities of the board will include:
- Administering the fund
- Deciding on viable investment options, etc
Note that at the end of the six-year period, the fund (along with its assets and liabilities), will be transferred to the Nigeria Police Force.
PwC’s issues with this: While acknowledging that funding the Nigeria Police Force for optimal efficiency and security of Nigerians is an important thing to do, professional services firm – PwC Nigeria – also noted that the development entails additional costs for companies. Moreover, the law does not make any provision for tax deductibility on the part of companies paying into the Police Trust Fund, even though it clearly specifies that all the money going in there will be tax-exempt.
“0.005% levy (N5 per N100,000) of net profits may not be very significant, but it places additional administration on corporate taxpayers... Although funding of the police and improving security is a priority issue, it could be funded through more allocations from already existing revenue streams. Introducing earmarked taxes could create concerns around the stability of the tax regime in Nigeria.
“The Act specifies that the Fund’s income is tax-exempt but does not make provision for tax deductibility for the companies making the payments.”
PwC went further to make other observations, including the fact that the Police Trust Fund Act ought to be classified as an “income tax” instead of a “levy”. This is because it is imposed on income/profits.
Also, the Act does not exactly specify the provisions for the collection and administration of the funds, according to PwC. The professional services firm is, therefore, recommending that this be made clear. According to PwC, the Federal Inland Revenue Service could be charged with the responsibility of administering the fund because any other option would increase the cost of administering it.
“We envisage that any regulation or guidelines to be issued under the new law will spell out details regarding commencement and administration.”
Senate calls for the liberalization of cement policy to crash the price of the commodity
The Senate also tasked the FG on providing more industrial incentives to bring new players into the cement industry.
The Nigerian Senate has called for the liberalization of Nigeria’s cement policy to boost production and subsequently crash the price of the commodity in the country.
This motion was raised by Senator Lola Ashiru at today’s senate plenary, the senator also tasked the Federal Government on providing more industrial incentives to bring new players into the cement industry, in addition to the liberalization of the cement policy in Nigeria.
Ashiru explained that to reduce the price of cement and in extension, other building materials in the country, the Federal Government needs to provide an enabling operating environment that will encourage new entrants in the country.
The Senate in conclusion called on the FG to provide more industrial incentives and protections such as concessionary loans and larger tax incentives to encourage new entrants and expand the national cement production infrastructure, as this boost in production will lead to a downward review of cement price in Nigeria.
What industry leaders are saying
Earlier this year the founder of BUA Group, Abdulsamad Rabiu, called for the liberalization of Nigeria’s cement policy to boost production and reduce the price of the commodity.
The billionaire philanthropist faulted the belief that Nigeria is self-sufficient in terms of cement production, noting that recent statistics and figures on Nigeria’s population and cement production do not support this status of sufficiency in cement production as stated by some individuals.
He attributed the high price of cement products in the country to the supply gap which exists in the country, as the few producers who currently operate in the country are unable able to meet the country’s huge and growing demand.
The Group Executive Director, Strategy, Portfolio Development and Capital Projects, Devakumar Edwin, explained that the demand and consumption of cement in the nation currently outstrips supply, and this can be pegged on the growth in the country’s population, and the strong appetite for real estate investment and construction in the country.
He revealed that a supply gap of about 40% exists in the country’s cement market and that all players in the industry are working hard to level production with the rising demand in the country.
Paypal’s Venmo now permits cryptocurrency trading
Venmo will support four different cryptocurrencies: Bitcoin, Ethereum, Bitcoin Cash, and Litecoin.
Venmo, a mobile payment service owned by PayPal has announced that it has started allowing users to buy, hold and sell cryptocurrencies on its app. Just like PayPal, Venmo will support four different cryptocurrencies: Bitcoin, Ethereum, Bitcoin Cash, and Litecoin, and users can carry out transactions with as little as $1 on the app
Founded in 2009, Venmo has over 70 million users and it is one of the most popular payment channels in the US. The payment platform processed around $159 billion in payments last year.
Since the app functions like a social network, adding cryptocurrency will offer a more user-friendly feel for people who love buying and selling crypto.
As bigger companies show more interest in cryptocurrency, there will be wider adoption of virtual currencies in future. Venmo is the latest payment app that is offering support for cryptocurrency on its platform.
Paypal, the parent company of Venmo is one of the most active companies in the crypto space as it allows users to buy, sell and hold cryptocurrencies in their digital wallets. Paypal users can also spend their coins at millions of merchants globally.
Crypto on Venmo is enabled through PayPal’s partnership with Paxos Trust Company, a regulated provider of cryptocurrency products and services.
What they are saying
Darrell Esch, Venmo’s Senior Vice President and general manager said “Our goal is to provide our customers with an easy-to-use platform that simplifies the process of buying and selling cryptocurrencies and demystifies some of the common questions and misconceptions that consumers may have.”
Nairametrics | Company Earnings
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- 2020 FY Results: Unity Bank Plc posts profit after tax of N2.09 billion.
- Guinea Insurance Plc reports a loss of N142.13 million in 9M 2020.
- Unilever Nigeria Plc set to hold Annual General Meeting on 6th of May.
- UBA Plc posts profit after tax of N38.16 billion in Q1 2021.
- PZ Cussons Nigeria Plc appoints Ifueko Okauru as Independent Non-Executive Director.