Business News

FG seeks partnership with National Council of Registered Insurance Brokers, here’s why

In order to tackle the risks associated with investments in the insurance sector, VP, Yemi Osinbajo is seeking support from the NCRIB.

Published

1 year ago

November 2, 2019

Chidinma Nwagbara

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

In order to tackle the risks associated with investments in the insurance sector, Vice President, Yemi Osinbajo is seeking support from the National Council of Registered Insurance Brokers (NCRIB).

While speaking during the investiture of Mrs Bola Onigbogi as the 20th President of the NCRIB in Abuja, Osinbajo asked the council to partner with the Federal Government to face the challenges that have crippled the industry.

The challenges, according to him, include lack of adherence to insurance practice which makes it difficult for government to achieve its objectives for the0 sector.

Osinbajo emphasized the importance of insurance as he said it is vital for the development of the economy which is why the government would do all it could, including working with the new leadership of the NCRIB to address the challenges facing the sector.

Also present was the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, who said that there was a need for operators to reinvent how it sold insurance products to the public.

She called on the operators to create a new initiative so as to reposition the industry, as she stressed that innovative products were needed to help businesses succeed and in turn achieve economic growth.

Ahmed further made known that the present administration was taking steps to take the economy out of the current challenges and would require the support of the insurance industry.

What you should know: According to a report by Coronation Research, Nigeria’s insurance industry has not shared in the growth experienced by other sectors as it has hardly grown in real terms over the past 10 years.

The industry suffers from poor returns on equity. Yet, its smallness is its opportunity. If it were to grow to the level reached by countries with similar GDP per capita, it might grow by a factor of 10 times in real terms in eight-to-10 years. The technological infrastructure and data necessary for expansion are largely available.

However, there is opportunity for the re-capitalised insurance industry to make enormous gains from 2020 onwards, not only in terms of expanded underwriting capacity but also by attracting millions of new accounts. As stated in the report, Nigeria’s insurance penetration, at 0.31%, is less than one-tenth of that of India (with similar GDP per capita) which suggests significant untapped potential. The business opportunity exists because of Nigeria’s very low bases in insurance penetration and insurance density.

Hence, there’s need for the government to reawaken the sector is crucial for its survival.

Chidinma Nwagbara

Chidinma holds a degree in Mass communication from Caleb University Lagos and a Masters in view in Public Relations. She strongly believes in self development which has made her volunteer with an NGO on girl child development. She loves writing, reading and travelling. You may contact her via - [email protected]

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Corporate Press Releases

Peter Obaseki retires as Chief Operating Officer of FCMB Group Plc

Mr Peter Obaseki, the Chief Operating Officer of FCMB Group has retired from the financial institution.

Published

44 mins ago

March 5, 2021

NM Press

The Board of Directors of FCMB Group Plc has announced the retirement of Mr. Peter Obaseki, the Chief Operating Officer of the financial institution, with effect from March 1, 2021. He was also an Executive Director of the Group.

His retirement was approved at a meeting of the Board of the Group on February 26, 2021. This has also been announced in a statement to the Nigerian Stock Exchange (NSE) by the financial institution.

The Chairman of FCMB Group Plc’s Board of Directors, Mr Oladipupo Jadesimi, thanked Mr. Obaseki for his valuable service and excellent support to the Board for many years.

FCMB Group Plc is a holding company divided along three business Groups; Commercial and Retail Banking (First City Monument Bank Limited, Credit Direct Limited, FCMB (UK) Limited and FCMB Microfinance Bank Limited); Investment Banking (FCMB Capital Markets Limited and CSL Stockbrokers Limited); as well as Asset & Wealth Management (FCMB Pensions Limited, FCMB Asset Management Limited and FCMB Trustees Limited).

The Group and its subsidiaries are leaders in their respective segments with strong fundamentals.

For more information about FCMB Group Plc, please visit www.fcmbgroup.com.

Tech News

Deezer accepts payment in Naira amid stiff competitions with Spotify, Youtube music, Apple music.

Deezer has gained quite a reputation in Nigeria, as it slashes its subscription fee and now accepts payment in Naira.

Published

4 hours ago

March 5, 2021

Janet John

Deezer slashes subscription fee and now accepts payment in Naira amid stiff competitions with Spotify, Youtube music, Apple music.

Deezer, the French music streaming platform that has gained quite a reputation in Nigeria has slashed its subscription fee and now accepts payment in Naira.

This is coming a few weeks after Spotify launched in Nigeria and 38 other new markets in Africa.

The competition in the Nigerian music streaming space is getting hotter by the day. More music streaming platforms are entering the Nigerian market with better payment methods and cheaper pricing, thereby forcing existing players to slash their prices so as to hold on to their customer base

Launched in 2007, Deezer currently connects over 16 million monthly active users around the world to 73 million tracks.

Before now, Deezer’s subscription was rated at $4.99 (₦1,800) for premium customers and the family plan for ₦2,700.

This number has been slashed in half. The music platform now charges ₦900 ($2.36) for Deezer Premium, ₦1,400 for Deezer HiFi and ₦1,400 ($3.67) for Deezer Family Plan.

Other streaming players in Nigeria like Apple Music, Spotify, Youtube music, Boom Play, Audiomack and Soundcloud have also slashed their prices.

For YouTube Music, the monthly individual subscription costs ₦900 while a family plan costs ₦1400 ($3.67).

Spotify Premium cost ₦900 per month in Nigeria. The Premium Family plan goes for ₦1,400 for up to 6 family members.

Apple music charges ₦450 per month for students, ₦900 per month for Individual plan while the Family plan goes for ₦1,400 for up to 6 family members.

Nairametrics

FG seeks partnership with National Council of Registered Insurance Brokers, here’s why

Business News

FG seeks partnership with National Council of Registered Insurance Brokers, here’s why

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Corporate Press Releases

Peter Obaseki retires as Chief Operating Officer of FCMB Group Plc

Tech News

Deezer accepts payment in Naira amid stiff competitions with Spotify, Youtube music, Apple music.

Nairametrics | Company Earnings