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Business News

Bail-out Fund: FG negotiates with States Governors as NEC approves 100 billion for NLTP 

The Federal Government has negotiated with States Governors on the initially planned bulk deductions of bail-out funds.

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FG foreign reserves Nigeria Yemi-Osinbajo, FG negotiates with Governors on bail-out fund, as NEC approves 100 billion for NLTP, bail-out fund States Governors, FG earns N28.6 trillion from VAT, others , Ease of doing Business: States must partner with Federal Government – Osinbajo , AfCFTA: Nigeria’s financial footprints to be extended across Africa – Osinbajo , FG seeks partnership with National Council of Registered Insurance Brokers, here’s why , Osinbajo says FG’s investment to take advantage of Africa’s $200bn tourism potential is massive, Pres. Buhari’s plan to tax US tech companies might provoke US trade war https://www.yemiosinbajo.ng/vps-lecture-at-the-national-defence-college-course-28-lecture-event/ https://punchng.com/digital-firms-to-pay-tax-under-new-finance-act-osinbajo-2/ https://www.nytimes.com/2020/01/31/business/economy/digital-tax-oecd.html Nigeria at risk of trade war with United States as the Nigerian Government says it will impose taxes on technology companies like Facebook, Google, and other digital companies that have been escaping tax payment in Nigeria due to their lack of presence within the country. The US has threatened tariffs on imports from countries that impose such digital taxes. The tech companies with heavy revenue footprint in Nigeria now have their backs against the wall because President Muhammadu Buhari-led administration want to tax them to grow Nigeria’s revenue; which has led to the development of the Finance Act. The Finance Act is the solution of President Buhari to the revenue problem which the Finance Minister, Ahmad Zainab, said Nigeria has. The Nigerian government is looking to grow its revenue through taxes, and one of such is the digital tax which Vice President, Yemi Osinbajo, said will commence despite the threat of the US which is aimed at protecting the silicon companies. No more back door operation: Facebook, Google, Amazon, YouTube and many more digital businesses have a sizeable market in Nigeria, but don’t have a physical structure for their operations; this has cost Nigeria tax revenue. These companies are known to prefer situating their companies in tax havens where taxes are low compared to other African and European countries. Ireland and Bermuda are some of the tax havens for these multinational companies. But according to Osinbajo, the period of making gains from their operation in Nigeria without paying tax is over. Osinbajo, while speaking at The National Defence College, Course 28 Lecture Event, said that, “Let me also briefly mention the new provisions on Taxation of Digital Economy and Non-Resident Companies. This is a very important aspect of our taxation policy. Before the Finance Act, only companies that had a physical presence or a fixed base in Nigeria could be taxed. “So, most digital companies, I mean any of the big technology companies, or multi-national digital companies, that did not have physical offices in Nigeria, made significant income from Nigeria from online activities, such as advertising, movie streaming, online gaming and e-commerce from subscribers in Nigeria, but paid no taxes whatsoever because they did not have a physical base in Nigeria. So now we are no longer relying on the fixed base or physical address criterion.” He added that, “Under the Finance Act, once you have a Significant Economic Presence (SEP) in Nigeria, you are liable to tax. Whether you are a resident here or you are not resident as a company, as long as your economic presence is significant, you are liable to tax. If you are streaming online, advertising using Google adverts, whether you are resident here or not, you are now subject to tax. “So, non-residents who previously had no fixed base and no Nigerian tax liability will now be liable to tax based on the SEP criterion. The Minister of Finance is empowered to issue a regulation defining what Significant Economic Presence means. So, she just defines the scope of what we will be looking out for in terms of Significant Economic Presence.” Osinbajo explained. Nigeria is not alone in this crusade: Nigeria is not the only country trying to tax these technology companies. The European Union have also been coming after them for taxes. The EU is also stating that if the technology companies are making economic gains through their operation despite the lack of physical presence in several European countries, then the tech conglomerates should be taxed. This has led to review of tax laws by the EU. According to a report by New York Times, new rules to tax these multinational companies are being discussed by about 130 countries through the Organization for Economic Cooperation and Development. The review has become necessary as digital economy begins to open new revenue sources. Should Nigeria tread carefully? The United States has threated to hit any country imposing taxes on the technology companies - which are mostly American – with tariffs on import. This put Nigeria at a rather impossible position, as the country is not economically strong enough to enter a trade war or go on a tit for tat battle with the US. According to Q3 report, the US is the fifth biggest export destination for Nigeria, having imported N322.2 billion (6.28%) goods from Nigeria, with crude oil constituting N329.8 billion. Although, the US is behind Ghana, India, Netherlands and Spain, it doesn’t change the significance of the US market to the Nigerian economy. Meanwhile, Nigeria’s top import sources include the U.S, accounting for N747 billion in H1 2019. Franch had moved to tax the online businesses but have now delayed the plan this year after a meeting with the US; the US has also paused its tariff threat against France. Britain is also one of the digital tax drivers. With such threat hanging over the digital tax, it’s unlikely Nigeria will go ahead taxing these technology companies, as US feels such tax is discriminatory against US firms, and have suggested these companies be allowed to decide if they want to operate with the new tax standards., FG will provide succor for daily wage earners as lockdown continues – Osinbajo

The Federal Government (FG) has negotiated with States Governors on the initially planned bulk deductions of bail-out funds. 

This was disclosed by the Vice-President, Yemi Osinbajoat the 97th National Economic Council (NEC) meeting on Thursday at the Council Chambers. 

The details: Essentially, the update was contained in a press release signed by Laolu Akande, the Senior Special Assistant to the President on Media & Publicity, Office of the Vice President. While delivering updates on the bailout fund which has generated controversies, the Minister of State for Budget and National Planning, Clement Agba, stated that State Governments are expected to start servicing the loan from September 2019 and repayment is over 240 months period. 

The Council also resolved that Governors should meet with the Ministry of Finance and Central Bank of Nigeria to sort out the details of repayment and the Vice President would ensure same and speedy resolution of the matter.

[READ MORE: FG moves to curb leasing challenge faced by airlines] 

N100 billion for NLTP: Providing an update on the National Livestock Transformation Plan 2019 – 2028 (NLTP),  Governor of Ebonyi State, Dave Umahi, Chairman Of NEC Technical Committee reminded NEC that the Committee was to address the Farmer/herder crisis. 

According to Umahi, the Plan is not targeted at only cows but a holistic strategy to address animal husbandry. The Plan has six pillars which include Conflict Resolution, Justice and Peace, Humanitarian Relief and Early Recovery, Human Capital Development, Cross-cutting issues and Economic Development. 

Speaking on the funding of NLTPUmahi disclosed that N100 billion had been budgeted to support the project. According to him, FG is to contribute 80% in grant to support States, while States will contribute land, project implementation structure, personnel and 20% cost of the project. 

The Council also emphasised the need to establish the fact that NLTP is a creation of NEC and State Governors and is completely distinct from RUGA. 

“NEC adopted the National Livestock Transformation Plan on January 18, 2019.  It is a creation of the National Economic Council. States will determine, whether or not they are willing to participate, as FG did not impose this plan.  Participation remains voluntary. The role of the FG is to coordinate, monitor and help implement the plan,” Uhami Stated. 

Ease of Doing Business: The Secretary of the Presidential Enabling Business Environment Council (PEBEC) Dr. Jumoke Oduwole gave an update on building an Enabling Business Environment. She informed Council that there is currently a reform wave in African countries, as contained in the African Development Bank (AFDB) Economic Outlook Report released in January 2019. 

[READ ALSO: FG sets deadline to clampdown on unregistered sim cards]

According to her, in the 2019 World Bank Ease of Doing Business ranking, Nigeria is ranked 146 with Micro Small and Medium Enterprises (MSMEs) making up to 90% of Business in Nigeria. Hence, the mandate is to make Nigeria rank among top 100 in the 2020 World Bank Doing Business index. 

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Appointments

Cornerstone Insurance Plc appoints Ogechi Adeola as Director

Dr Ogechi Adeola has been appointed as an Independent Non-Executive Director at Cornerstone Insurance Plc.

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Cornerstone Insurance Plc has appointed Dr Ogechi Adeola as its new Independent Non-Executive Director, subject to ratification by members at general meeting.

This is according to a notification sent to the Nigerian Stock Exchange platform, dated 24th of February, 2021, as seen by Nairametrics.

Dr. Adeola’s profile

Dr. Adeola has over two decades of work and consulting experience in the Nigerian Financial services sectors. She is an Associate Professor of Marketing at the Lagos Business School and an alumna of the Manchester Business School, United Kingdom.

On the other hand, Cornerstone Insurance closed trading today (24th of February, 2021) at the floor of the Nigerian Stock Exchange with a share price of N0.59.

Results from the recently released FY 2020 financials posted by the firm showed that gross premium written increased from N13.06 billion in 2019 to N17.6 billion. However, profit for the period declined to N1.6 billion, from N4.11 billion recorded in 2019.

What you should know:

Cornerstone Insurance Company Plc is a Nigerian-based insurance company offering services in the life and non-life categories.

It was incorporated on the 26th of July, 2021, initially as a private limited liability and subsequently became a public limited liability after its listing on the Nigerian Stock Exchange in 1997.

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Corporate Press Releases

Court vindicates Zinox, TD Africa in N170m FIRS contract fraud

Zinox and TD Africa have been vindicated as court rules on N170 million FIRS contract scandal.

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Leo Stan Ekeh

An Abuja High Court has vindicated the long-held position of Zinox Technologies Ltd., and TD Africa, two of Nigeria’s leading technology giants, that its Chairman, Leo Stan Ekeh and its staff, Company Secretary, Barr. Chris Eze Ozims and two others, Shade Oyebode and Charles Adigwe respectively, had no wrongdoing in a long-drawn court case involving a N170m Federal Inland Revenue Service (FIRS) contract.

The court on Wednesday, February 24, 2021, discharged and acquitted the duo of Princess Kama Onyeoma and Chief Onny Igbokwe, partners to Mr. Benjamin Joseph, who were accused of fraudulently executing the N170m contract awarded to Citadel Oracle Concepts, an Ibadan-based ICT firm owned by Joseph.

In addition, the sum of N20m was awarded as damages against the complainant, Mr. Joseph, for frivolous and malicious petitioning and prosecution.

In his ruling, the trial judge, Hon. Justice Senchi of the FCT High Court, Abuja, dismissed the case as lacking in merit, adding that the prosecution failed to establish the case of criminal conspiracy, forgery and fraudulent use of Mr. Joseph’s documents as alleged. Further, the judge acquitted the duo of all four count charges; even as he absolved both defendants, Kama, a long-time associate of Mr. Joseph, and Chief Igbokwe of the criminal charges levelled against them by the Economic and Financial Crimes Commission (EFCC). The four-count charges are forgery; false board resolution of Citadel Oracle Concept, with intent to commit fraud and commission of fraud; using the forged documents as genuine and fraudulent use as genuine of the forged board resolution.

Mr. Joseph had petitioned the EFCC, the Police and later the Vice President, Prof. Yemi Osinbajo, alleging that his board resolution and other corporate documents were forged to execute the N170 million FIRS contract without his knowledge, even when he appointed the said Princess Kama to execute the contract on his behalf by issuing her a duly executed Power of Attorney and other corporate documents, all presented to the FIRS.

However, Mr. Joseph had also surprisingly accused top officials of TD Africa and Zinox, including its Chairman, Leo Stan Ekeh, of involvement in the alleged fraud, even when Zinox or Mr. Ekeh had never met or transacted any business with Mr. Joseph.

Indeed, after winning the contract, Joseph and his partner, Princess Kama had agreed to domicile the FIRS computer supplies transaction worth N170m with Sub-Saharan Africa’s foremost tech distribution giant, TD Africa, the biggest HP authorised distributors for funding, with a promise to pay immediately they received payment from the FIRS, with additional guarantee from Princess Kama’s uncle, Chief Igbokwe as Citadel Oracle Concepts Ltd. was not qualified to enjoy credit from TD Africa. When the FIRS paid for the supplies, Mr. Joseph had allegedly tried to divert the fund but his partner, Princess Kama refused and paid TD Africa the pre-agreed invoice sum of the laptops supplied on credit.

This move apparently saw Mr. Joseph take offence and he started writing all sorts of petitions to blackmail the Zinox Chairman, accusing him and other top officials of TD Africa, including Ozims, Oyebode and Adigwe; as well as Access Bank of criminally conniving to execute the contract without his knowledge.

However, investigations by the EFCC and the Police had absolved the aforementioned officials of Zinox and TD Africa, with the Commission later charging the staff/representatives of Citadel Oracle Concept Limited, Princess Kama and Chief Igbokwe, due to their own internal issues in Charge no. CR/244/2018 before the FCT High Court.
The ruling by Justice Senchi on Wednesday upheld the unflinching position of Zinox and TD Africa, which had repeatedly insisted on the innocence of its officials, especially in the face of a barrage of sponsored media attacks by Mr. Joseph and led by Premium Times, an online news medium.

Recently, the medium had come up with a report claiming that an unsubstantiated Police report had indicted the Zinox Chairman, Ekeh, which had been debunked by the Police Force and on the basis of the same case which Justice Senchi had ruled on Wednesday.

‘‘We are delighted to see justice finally run its course in this long-drawn case,’’ said Reginald Obiakor, a Senior Special Assistant (Legal) to Mr. Ekeh. ‘‘Despite the obviously sponsored attacks and campaign of calumny by Benjamin Joseph and Premium Times, we had remained steadfast in our conviction that Mr. Ekeh, Zinox and TD Africa had no case to answer, as TD had only extended a facility to Citadel and her partners. This case has caused us quite some embarrassment, especially considering the potential damage to the hard-earned reputation of an industrious/exemplary Nigerian and globally respected digital icon who has enjoyed over 35 successful years in business.

‘‘We wish to thank our local and international partners, friends and well-wishers who have continued to show us support, even when the attacks persisted. This judgment further strengthens our belief in the validity of the courts as the bastion of justice and hope of the downtrodden,’’ he concluded.

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