Business News
VAT Increment: Afrinvest exposes sharing formula of N479.7b expected revenue
Analysts at Afrinvest West Africa, have exposed the Federal Government’s intended sharing formula of the expected N479.7 billion revenue from the proposed 7.5% Value Added Tax (VAT).
Analysts at Afrinvest West Africa, have exposed the Federal Government’s intended sharing formula of the expected N479.7 billion revenue from the proposed 7.5% Value Added Tax (VAT).
According to the analysts, the Federal Government is to receive additional N72 billion based on the new sharing formula, while states are expected to receive N239.8 billion. Local governments are also expected to get N167.9 billion upon the VAT implementation.
“While the states would receive a significant boost, the increase is unlikely to make a dent on the Federal Government’s fiscal deficit which we estimate at N3.4 trillion in 2019. We believe the Federal Government requires a significant revenue boost, which would come elsewhere. Our analysis shows that removing petrol subsidies and adopting a market reflective exchange rate of N360/$1 for the computation of oil receipts would increase the Federal Government’s revenue by N880 billion,” the analysts added.
[READ MORE: Debts-Revenue Quagmire heightens, as 10 States in Nigeria owe N2.74 trillion]
Recall that the Federal Executive Council (FEC) approved the increment of the VAT to 7.5% from 5%. The Minister of finance Budget and National Planning, Zainab Ahmed disclosed this to state house correspondents at the end of the cabinet meeting on Wednesday, September 11, 2019.
What you should know: If approved by the federal lawmakers, the new VAT rate will take effect in 2020. In Nigeria, VAT replaced the sales tax in 1994 and was pegged at 5% by the military government of Sani Abacha.
In 2007, former President Olusegun Obasanjo increased VAT to 10% on the eve of his departure from office but it was reversed by his successor, Umaru Musa Yar’Adua, following opposition from the Labour Unions.
[READ ALSO: Border Closure will save Nigeria over N144 billion revenue loss – RIPAN]
Meanwhile, it is pertinent to note that despite wide criticisms that have greeted both the VAT increment, the Federal Government considers the move as the most potent channels to meet the new minimum wage implementation.
Hospitality & Travel
Passengers can now arrive 90 minutes before departure for domestic flights – FG
The Federal Government has announced the reduction of arrival time for passengers from three hours to one hour and a half before departure for domestic flights.
This was disclosed in a tweet post by the Minister for Aviation, Hadi Sirika, through his Twitter handle on Monday, July 13, 2020.
The minister said that the decision was arrived at after they have reviewed passenger facilitation at the airport while noting that passengers should check-in online.
In the tweet post, Sirika said, ‘’My colleagues and I have reviewed passenger facilitation at our airports, consequently I am happy to announce that, henceforth travellers are to arrive one hour and half before their departure time for domestic flights. Travellers are advised to check-in online, please.’’
My colleagues & I have reviewed passenger facilitation at our airports, consequently I am happy to announce that, henceforth travelers are to arrive one hour and a half before their departure time for domestic flights. Travelers are advised to check in online, please 🙏🏽🇳🇬🇳🇬🇳🇬🙏🏽
— Hadi Sirika (@hadisirika) July 13, 2020
It can be recalled that the Federal Airports Authority of Nigeria (FAAN) had earlier in June issued flight resumption protocol for both international and local passengers across the country, advising passengers to arrive at the airport three hours before their time due to the new COVID-19 safety checks for domestic flight operations and five hours for international flight operations.
Economy & Politics
Seyi Makinde Proposes N3 billion investment plan for water supply
The local governments in Oyo are advised to submit a list of 10 faulty boreholes in the LG.
The Governor of Oyo State, Seyi Makinde announced the proposal of a N3 billion investment plan dedicated to water supply in rural and urban areas of the state.
Speaking through the Chairman of Rural Water Supply and Sanitation Agency (RUWASSA), Mr. Najeem Omirinde in Ibadan on Monday, he added that N500 million of the N3 billion would be used for repairing broken and faulty state-owned boreholes.
All Chairmen of each of the Local Governments in Oyo are advised to submit a list of 10 faulty boreholes in the Local governments.
The Oyo State governor also ordered that all new boreholes must be compliant with solar-powered pumps, to enable their longevity and save costs.
Urging residents to patronize the agency if they need to dig up boreholes for water, citing that it would be cheaper if done through the state agency than with private drilling companies.
Minister of Finance, Zainab Ahmed stated last year that Nigeria needs an estimated N36 trillion annually for the next 30 years to solve Nigeria’s infrastructure problem. The investment, although a tiny fraction of what Nigeria needs is a bold step by the Oyo State government.
Economy & Politics
FG asks UK court for more time to appeal $9.6 billion arbitration judgement
Malami stated that the Evidence of P&ID’s highly orchestrated scam had only recently come to light.
The Federal Government has approached a UK court to appeal for more time to appeal the $9.6 billion arbitration award against it over the breach of contract with Process & Industrial Development (P&ID) Ltd.
Nigeria has said that it needs more time to pursue its argument that the 2010 gas supply contract with Process & Industrial Development Ltd was a sham.
The legal dispute with P&ID is coming against the backdrop of the huge drop in the country’s revenue due to the collapse in oil prices globally. Nigeria had applied to US courts in March seeking for documents from 10 banks which includes Citigroup Inc. and JPMorgan Chase & Co, in a bid to prove its corruption allegations.
P&ID, however, has denied any wrongdoing in the whole transaction, arguing that Nigeria missed its opportunity to appeal.
The Nigerian Lawyer, Mark Howard, on Monday, the first morning of a 2-day hearing, said ‘’It is very unusual in a fraud case to discover a single smoking gun. By its very nature, fraud is conducted in secret, which makes it hard to detect and justifies an extension.’’
READ MORE: The effect of the United States’ Shale Oil on Nigeria?
The legal representatives for Nigeria are seeking another hearing for the judge to decide whether any misconduct has taken place and whether it justifies overturning the contract
The Attorney General and Minister for Justice, Abubakar Malami in a statement said, ‘’Evidence of P&ID’s highly orchestrated scam had only recently come to light.’’
It can be recalled that last year, a UK judge upheld an earlier arbitration award to P&ID, which had accumulated to about $9.6 billion. The arbitration decision was over a failed contract to build a gas processing plant in the Southern city of Calabar.
The Nigerian lawyers disclosed that they have uncovered alleged bribes to government officials and their family members dating back to 2009.
Malami in his court filing on March 24, submitted that ‘’There is good reason to believe that ministers at the highest level were involved in a corrupt scheme to steal money from Nigeria.’’
Passengers can now arrive 90 minutes before departure for domestic flights – FG
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Seyi Makinde Proposes N3 billion investment plan for water supply
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FG asks UK court for more time to appeal $9.6 billion arbitration judgement
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