Business News
FIRS boss reacts to communications tax, says Nigerians talk too much on phone
FIRS Chairman, Babatunde Fowler, has responded to the reactions of Nigerians on the 9% communication service tax, saying they talk too much on phone.
The latest reaction to the decision of the Nigerian Senate to levy a 9% communication service tax on Electronic Communication Services came from Babatunde Fowler, chairman of the Federal Inland Revenue Service (FIRS). Fowler said there was no harm in introducing the tax.
He also went ahead to berate Nigerians for reacting to the decision of the Senate, saying they talk too much on the phone. He made this statement on the sideline to the media at the ongoing Nigerian Economic Summit Group conference holding in Transcorp Hilton in Abuja.
“I will put it this way, Nigerians talk a lot on the phone; they even talk more than is required, so for them to have capacity or revenue to talk that much, I don’t see any harm in paying a little bit more to government.
“We compare ourselves to developing countries but Ghana introduced a 2% education tax and used it to fund their universities and that is why Nigerians are now going to university in Ghana. They didn’t look for aid, they did it by themselves.”
[READ MORE: JUST IN: FIRS’ Fowler replies presidency over leaked memo]
He explained the decision of the FIRS to introduce VAT on online transactions. He said instructions had been given to banks to charge 5% VAT and remit it to the revenue service for people that make use of online facilities.
“By the VAT Act, the minister has the right to change the rate but this government, I believe wants to carry every stakeholder along including those in the house and explain to them that this increase is for the benefit of all Nigerians. And it will only apply to what I call privileged items like buying a car or lunch in an expensive restaurant. The money will help the state look after the needy among us.”
What you should know: At present, Nigerian lawmakers are proposing a 9% charge on telecommunication services in place of an increase in value-added tax from the present 5% to proposed 7.5% by the Federal Executive Council (FEC). The decision to move in this direction was pushed forward by the Chairman of the Senate Committee on Army, Senator Ali Ndume, who said the proposed VAT increase would affect ordinary Nigerians.
The communication service tax will be levied on Electronic Communication Services like Voice calls, SMS, MMS, and Data usage from Telecommunication Services Providers and Internet Service as well as Pay per View TV Stations.
[READ ALSO:10 Nigerian companies pay a combined N187.9 billion taxes in first half of 2019]
Ndume also said the Communication Service Tax was a way of distributing wealth in such a way that it would not affect the ordinary people.
Economy & Politics
Buhari to finally send Petroleum Industry Bill to National Assembly next week
Sources in the Presidency have disclosed that the President may be presenting the bill to the National Assembly.
President Muhammadu Buhari is expected to present the long-awaited Petroleum Industry Bill (PIB) to the Senate as early as next week.
According to Reuters, who were quoting 4 sources familiar with the development, the presentation of the bill to the National Assembly, follows its official approval by the president late last week. This is as the National Assembly has already formed teams of members that will work most closely on the individual portions of the bill.
Both chambers of the National Assembly must have to pass the bill after deliberating on it before it can then be passed on to the president for his final signature.
The PIB which is an oil reform bill has been in the works for about 20 years, is key to the repositioning of Nigeria’s Oil and Gas Industry under its post-COVID-19 agenda as the main laws governing oil and gas exploration have not been fully updated since the 1960s due to some contentious issues like taxes, payments to local communities, terms and revenue sharing within Nigeria.
The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), had disclosed that the delay and non-passage of the bill has made international investors to start losing confidence in the country’s oil and gas industry.
While revealing last month that the PIB will be presented to the National Assembly in the next few weeks, the Minister of State for Petroleum Resources, Timipre Sylva, also said that the executive arm will be requesting the lawmakers to specially reconvene to receive and start deliberations on the bill.
These oil reforms and regulatory certainty became more pressing this year as low oil prices and a shift towards renewable energy made competition for investment from oil majors tougher.
The draft copy of the bill which was prepared by the Petroleum Ministry is a product of series of consultation between the federal government, oil and gas companies and other industry stakeholders.
Excerpts from the bill reported by Reuters include provisions that would streamline and reduce some oil and gas royalties, increase the amount of money companies pay to local communities and for environmental clean-ups alter the dispute resolution process between companies and the government.
It also included measures to push companies to develop gas discoveries and a framework for gas tariffs and delivery. Commercializing gas, particularly for use in local power generation, is a core government priority.
Business
UK-based group to investment $245 million in 100 Nigerian businesses
A UK based organization is to partner local investment funds to disburse $245 million to 100 Nigerian businesses.
A UK-based development finance institution, CDC Group, has finalized plans to invest US$425 million as an aid to 100 businesses and 38,000 jobs in Nigeria.
This is sequel to its partnership with 40 investment funds such as Afreximbank, African Capital Alliance and Indoram, NAN reports
In a virtual visit to the country by the board of the organization led by Chief Executive, Nick O’Donohoe and Chairman, Graham Wrigley, the UK Government-funded organization stated that all earnings from its investments are ploughed back to improve the lives of millions of people in Africa and South Asia.
CDC Group noted that it paid a virtual visit to the Vice President of Nigeria, Prof. Yemi Osinbajo, and British High Commissioner to Nigeria, Catriona Laing, to discuss and ascertain the impact of CDC’s aid to its investees through the COVID-19 crisis and understand how to stimulate recovery and growth.
The discussions also focused on CDC’s own response to the pandemic through its preserved, strengthen and rebuild programme, the statement said
(READ MORE: WHO to secure initial COVID-19 vaccine for 20% of Africans)
Commenting on the rationale of the aid, the Chief Executive of the CDC Group, Nick O’Donohe said that, “Nigeria plays a key part in our strategy of partnership and investment for economic growth in West Africa. “Hosting our 2020 board trip– albeit virtually – in both markets is a testament to our commitment.
“Looking forward, we will continue to prioritise the post-COVID-19 recovery as part of the Build Back Better agenda.
“We are committed to supporting a deeper and more strategic bilateral partnership between the UK and Nigeria that is based on enhancing economic development, job creation, inclusion, trade and investment,” O’Donohoe further remarked.
In a glowing tribute and commendation to the group, British High Commissioner to Nigeria, Catriona Laing CBE said CDC has been pivotal to creating jobs and supporting the growth of businesses by investing in the poorest countries across Africa, including Nigeria.
“CDC’s commitment to the country signals to other UK investors that investing in Nigeria is possible and should be prioritized in order to help Nigeria and indeed, Africa, mitigate the impact of COVID-19,” the envoy said.
Business
Just-in: Nigeria’s manufacturing sector contracts for 5th consecutive month – CBN
The CBN disclosed in its September PMI report that the manufacturing sector contracted.
The Manufacturing Purchasing Managers’ Index (PMI), in September 2020, has witnessed a contraction for the fifth consecutive month, as it stood at 46.9 index points.
This was disclosed by the Central Bank of Nigeria (CBN), in its September PMI report released on Wednesday.
The report stated that, out of the 14 subsectors surveyed, 4 subsectors reported expansion (above 50% threshold) in the review month in the following order:
- Electrical equipment
- Transportation equipment
- Cement, and
- Nonmetallic mineral products
The paper product subsector was stable.
While the remaining 9 subsectors reported contraction (below 50% threshold) in the review month in the following order:
- Petroleum & coal products
- Primary metal
- Furniture & related products
- Printing & related support activities
- Food, beverage & tobacco products
- Textile, apparel, leather & footwear
- Chemical & pharmaceutical products;
- Fabricated metal products and
- Plastics & rubber products
The Non-manufacturing sector PMI stood at 41.9 points in September 2020, indicating contraction in nonmanufacturing PMI, for the sixth consecutive month.
Buhari to finally send Petroleum Industry Bill to National Assembly next week
UK-based group to investment $245 million in 100 Nigerian businesses
MTN, Seplat, Mobil record gains, ASI up by 0.50%
Just-in: Nigeria’s manufacturing sector contracts for 5th consecutive month – CBN
Nigeria is Africa’s leader in Bitcoin transfers, transacts $8 million weekly
COVID-19 Update in Nigeria
Daily Parallel Market Exchange Rate – ₦460/$1
Leaked Bank memo spooks holders of domiciliary (dollar) accounts
CBN gives up on its policy of attracting dollars
De facto Government: CBN explains why it will keep funding the economy
Stanley
October 8, 2019 at 4:40 pm
I wonder which category of Nigerians accused of talking too much during phone calls. Is it the over 70% living on less than a dollar per day or is he referring to his circle of friends?
michael Nwachukwu
October 8, 2019 at 5:27 pm
Truth be told, Nigerians talk too much on phone. The problem is not with collecting the tax. It is with the management of it. How much did we hear is allegedly missing at the FIR where the chairman is presiding? True or false, it is difficult to believe any denials from any of our leaders. Ghana used 2% VAT to fund education. But 1% VAT in Lagos alone, if properly collected and adminstered can fund a better education in Lagos and fifteen other states in Nigeria.
Our national treasury basket is leaking and cannot hold whatever amount of tax/ revenue that is brought into it as it is today.