Business News
Finance Bill: Public hearing to hold tomorrow despite dissenting voices
Despite the negative reactions trailing the passage of the Finance Bill, the National Assembly is bent on holding a joint public hearing on the bill.
Despite the negative reactions trailing the passage of the Finance Bill, the National Assembly is bent on holding a joint public hearing on the bill tomorrow.
According to Punch, many financial experts have expressed their discomfort towards the bill that could see a spike in Value Added Tax, (VAT) Company Income Tax and other taxes.
The Details: However, Solomon Adeola, Chairman, Senate Committee on Finance said the bill is not about increment in VAT but other things like the amendment of seven acts of the National Assembly as well as the removal of taxes for some sectors in the economy.
Adeola noted that the deliberation would comprise of Senate and House of Representatives Committees on Finance. He urged concerned parties to be ready to air their views on the bill.
“The bill is targeted at reforming our tax regime and will involve amendments of seven Acts of the Parliament namely; Petroleum Profit Tax, Custom and Excise Tariff Act, Company Income Tax Act, Personal Income Tax Act, Value Added Tax, Stamp Duties Act and Capital Gain Tax.
“Studying the executive bill that was referred to my committee after passing second reading on the floor of the senate, I realised that there are a lot of ignorance and limited knowledge of the content and import of the Finance Bill.
“It is not only meant to increase revenue for the government but to also remove some conflicting and confusing aspects of our laws that had given rise to legal disputations in the past leading to huge loses of revenue for government,” he said.
What you should know: The Finance Bill was presented to the joint session of the National Assembly on October 14 2019.
The President forwarded the Finance Bill 2019 for passage into law in pursuant to Sections 58 and 59 of the Constitution of the Federal Republic of Nigeria, 1999 (as amended).
The Finance Bill has four strategic objectives, in terms of achieving incremental but necessary changes to our fiscal laws. These objectives are:
- promoting fiscal equity by mitigating instances of regressive taxation;
- reforming domestic tax laws to align with global best practices;
- introducing tax incentives for investments in infrastructure and capital markets; and
- supporting Micro, Small and Medium-sized businesses in line with our Ease of Doing Business Reforms.
Economy & Politics
Nigeria only hit 56% of its target revenue in first five of months of 2020
Nigeria’s earnings in the period were N1.48 trillion which is 56% off its main target.
Nigeria’s Minister of Finance, Zainab Ahmed revealed that Nigeria was only able to meet 56% of its target revenue from January to May as the global oil price crash affected government revenue due to the COVID-19 pandemic.
Nigeria’s earnings in the period were N1.48 trillion which is 56% off its main target, crude oil revenues accounted for half of Nigeria’s revenues, while non-oil revenues made up the rest in the first 5 months of the year.
On Friday, President Muhammadu Buhari signed the new 2020 revised budget of N10.8 trillion with the crude oil benchmark reduced from $57 per barrels in the earlier budget to $25 in the new budget.
The Minister said the budget had to be revised because of the effects of the COVID-19 pandemic on Nigeria’s economy. She added that Nigeria’s crude oil production would be an average of 1.86 million barrels per day next year and rise to 2.09 million the following year.
“Although Nigeria’s total production capacity is 2.5 million barrels per day, current crude production is about 1.4 million barrels per day — in compliance with the Organization of the Petroleum Exporting Countries’ production quota – and an additional 300,000 barrels per day of condensates, totaling about 1.7 million barrels per day,” she said.
Coronavirus
African Union begins COVID-19 vaccine trial group
CONCVACT plans to capture more than ten late-stage vaccine trials at the earliest.
The African Union Commission just recently facilitated a program called the new Africa Centres for Disease Control and Prevention (Africa CDC) Consortium for COVID-19 Vaccine Clinical Trial (CONCVACT).
The program is part of the Africa Joint Continental Strategy for stopping the deadly COVID-19 onslaught that has disrupted human activities. The goal is to prevent severe COVID-19 infections and deaths in African countries, reduce the economic damage caused by the pandemic, and help minimize the general disruption to everyday life.
Quick fact about COVID-19: Although for some individuals, the COVID-19 virus causes only mild illness, it can make other individuals seriously ill. The disease can be very fatal, especially among older individuals, and those with compromised immunities (such as diabetes, high blood pressure, or heart problems) appear to be more susceptible.
South Africa’s leader, Cyril Ramaphosa, said, “Success in developing and providing access to a safe vaccine requires an innovative and collaborative approach, with significant local manufacturing in Africa.
“We need to support the contribution of African scientists and healthcare professionals. We need to act with urgency.”
CONCVACT plans to capture more than ten late-stage vaccine trials at the earliest, via collaborations with global vaccine developers, sponsors, and African businesses that enable clinical studies.
The African group also hopes to secure the safety and efficacy data of promising vaccine candidates for the African population in order to validate their launch after approval.
Economy & Politics
2021 Budget: FG projects spending plan of N11.86 trillion and deficit of N5.16 trillion
This tops 2020 budgeted expenditure of N10.8 trillion.
The Federal Government is projecting to spend N11.86 trillion for 2021. This was disclosed by the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed at a virtual presentation of the 2021-2023 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) held on Friday.
According to the finance minister, the government is planning to spend N11.86 trillion against revenue of N6.98 trillion meaning the government will have to grapple with a fiscal deficit of N5.16 trillion.
Zainab Ahmed;
“The 2021-2023 MTEF&FSP is the pre-budget statement that provides the framework for the development of the 2021 budget. It is being framed against the backdrop of challenging global macroeconomic environment as well as domestic factors.
“We aim to keep the deficit within the three percent ceiling over the medium term and are therefore working on identifying new revenue sources and or cost of reduction.”
The minister noted that the 2021-2023 draft had been prepared against the backdrop of heightened global economic uncertainty.
Earlier today President Buhari signed the revised 2020 national budget of N10.8 trillion, which was passed by the National Assembly in June. The National Assembly passed a revised budget of N10.8 trillion on the 11th of June after the Federal Executive Council (FEC) approved a revised budget of N10.523trillion in May. 2020 Budget is based on a revised oil benchmark of $25 per barrel as against $57 while crude production was reduced from 2.18 million to 1.94 million barrels per day Budget deficit for 2020 is estimated at N5.365 trillion.
As of March 2020, the FG was running a 52% shortfall in the first quarter of the year with actual revenue collected of N950 trillion compared to budgeted revenue N1.96 trillion.
What this means: Nigeria is facing an unprecedented revenue crisis exacerbated by the Covid-19 pandemic and the crash in oil prices. At N5.16 trillion, Nigeria’s projected budget deficit will be 43% of spending and about 3.6% of GDP if the budget is passed. A budget deficit means the government will have to borrow heavily next year to fund its expenditure programs.
The government received a $3.4 billion funding from the IMF in April and expects another $3.5 billion from the World Bank in August 2020. The government also revealed it has no plans to access the commercial market for foreign debts as it takes advantage of lower interest rates in the domestic market.
Nigeria only hit 56% of its target revenue in first five of months of 2020
African Union begins COVID-19 vaccine trial group
2021 Budget: FG projects spending plan of N11.86 trillion and deficit of N5.16 trillion
Nigerian Bourse finishes on a bullish note, triggered by MTN, INTBREW, VITAFOAM
Daily Parallel Market exchange rate – ₦465/$1
COVID-19 Update in Nigeria
Top 10 highest earning CEO’s in Nigeria
Naira falls to a 3-year low at the black market
Nigeria’s excess crude account falls to $72 million
Prices of Oil, pepper, tomatoes, rice others jump as low sales hit major markets in Lagos
