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Economy & Politics

FG to facilitate tax incentives for SMEs

FG has disclosed its plans to prioritise MSMEs in various industries by providing tax incentives for them.

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Automotive Bill: The silver bullet? 

The Federal Government (FG) has disclosed its plans to prioritise Micro, Small and Medium Enterprises (MSMEs) in the agriculture, construction and automotive industries by providing tax incentives for them.

The disclosure was made by the Minister of Industry, Trade and Investment, Niyi Adebayo during a private equity summit in Lagos.

Entrepreneur, Multiple businesses, Nigeria partners UAE to boost SMEs , US technology company deploys software to ease business process in Nigeria, Experts outline what SMEs must do to attract funding, investors in 2020 

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Adebayo made known that the ministry had started work on delivering tax and regulatory incentives for SMEs. He also said the government was modernizing bilateral investment agreements with a greater sense of purpose through the Nigerian Investment Promotion Commission.

The minister said the government aimed to enhance the ease of doing business and support the growth of the MSMEs. This, he said would attract global investors when viewed against the backdrop of the country’s capacity for growth.

“The Federal Government seeks to localize at least 40% of its expenditure on stipulated goods and services to facilitate local markets access for Nigeria-made products.

 “The government also seeks a comprehensive approach in mobilising capital, incentivising priority sectors and expanding market access for local producers,” Adebayo said.

(READ MORE: Finance act: VP outlines how FG plans to capture multinational firms in tax net)

Meanwhile, the acting Director-General of the Securities and Exchange Commission (SEC), Ms Mary Uduk has described private equity firms as important agents of business and economic growth as they bring capital to the business.

Uduk stressed the fact that Nigeria has a lot of start-ups with genuine robust business plans as well as public companies with solid customer bases, proven products, and high-quality management. She said that what these businesses yearn for was investments which private equity firms could tap into.

“I see an improved investment climate, friendly market rules, and regulations, as well as increased investor education as essential elements for attracting private equity investments in Nigeria. Towards this, the commission is working on rules and regulations to ease the participation of more private equity funds,” Uduk said.

Recall that a key feature of the new Finance Act law is the introduction of a graduated tax scale for small businesses. Under the law, small companies (with gross turnovers of not more than N25 million) will pay 0% in Companies Income Tax (CIT). They will also not be required to make VAT returns with respect to goods and services rendered.

 

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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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Economy & Politics

CBN extends Covid-19 forbearance for intervention loans by another 12 months

CBN will continue to charge an interest rate of 5% for its intervention loans for another 1 year.

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New CBN guidelines ban MMOs, PSPs, Operators from receiving diaspora remittances

The Central Bank of Nigeria has announced an extension of its regulatory forbearance for the restructuring of its intervention facilities by another 12 months.

In a circular signed by Dr. Kevin Amugo, the Director of Financial Policy and Regulatory. the apex bank said it will continue to charge its borrowers an interest rate of 5% per annum as against the 9% originally offered. The CBN had on March 20th reduced the interest rates on its intervention loans from 9% to 5% as part of its response to the economic crunch brought on by Covid-19 induced lockdowns.

The CBN also offered to rollover moratorium granted on all principal payments on a case by case basis. All credit facilities had been granted a one-year moratorium starting from march 1, 2020 when the pandemic first gripped Nigeria.

READ: Analysing the Central Bank of Nigeria’s Dollar Remittance Policy

See excerpt from Circular

“The Central Bank of Nigeria reduced the interest rates on the CBN intervention facilities from 9% to 5% per annum for one-year effective March 1, 2020, as part of measures to mitigate the negative impact of COVID-19 Pandemic on the Nigerian economy.”

Credit facilities, availed through participating banks and OFIs, were also granted a one-year moratorium on all principal payments with effect from March 1, 2020.

Following the expiration of the above timelines, the CBN hereby approves as follows:
1) The extension by another twelve (12) months to February 28, 2022 of the discounted interest rate for the CBN intervention facilities;

2) The roll-over of the moratorium on the above facilities shall be considered on a case by case basis.

READ: Nigeria attracts more FDI than FPI for the first time in 4 years

What this means

Companies who secured intervention funds from the CBN or through any of its on-lending banks will continue to service the loans at an interest rate of 5% per annum instead of 9%.

  • They can also get another year of not needing to pay back the principal sum collection. However, they will need to apply.
  • Whilst this move helps the small businesses continue to manage their cash flow, it means the CBN will record a reduction in its income extended under such facility.
  • Regulatory forbearance is a widely adopted concept during an economic crunch and it is meant to help stimulate businesses. These pronouncements if implemented will only affect those who borrow from the CBN or BOI but those who do not will miss out.
  • Download the circular here.

READ: CBN discloses conditions for assessing N100 billion credit facility, addresses ‘process problems’

 

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Economy & Politics

Senate endorses ex-Service Chiefs as Non-career Ambassadors

The Senate has confirmed President Buhari’s nomination of the immediate past service chiefs as non-career ambassadors.

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The Nigerian Senate has endorsed the nomination of the past serving Military Service Chiefs as Non-career Ambassadors.

This was confirmed during Tuesday’s plenary session and announced in a social media statement by the Nigerian Senate.

Their confirmation follows the consideration of the report of the Senate Committee on Foreign Affairs, Chaired by Senator Adamu Bulkachuwa.

According to reports, the Senate Minority Leader Enyinaya Abaribe, however, questioned the nomination and confirmation of the ex-service chiefs when the Senate had on 3 different occasions called for their sack.

Senator Abaribe also raised issues on the petitions against the former service chiefs and questioned why they were dismissed without explanations.

But Senate President Ahmad Lawan dismissed Senator Abaribe’s concerns, ruling that the nomination of the former service chiefs cannot be nullified simply because the upper chamber had called for their sack, noting that this is totally a different assignment.

In his concluding statement, the Senate President, Senator Lawan added that these nominees that have just been confirmed have served this country to the best of their abilities. He appealed to the executive to make sure they use their experience as military men to the best.

“These nominees that we have just confirmed are nominees that have served this country to the best of their ability. Our appeal to the Executive is to make sure they use their experiences as military men to the best,” Lawan said.

Lawan, on behalf of the senate, wished them a very successful career in their capacity as Non-Career Ambassadors.

What you should know 

  • Recall Nairametrics reported earlier this month that President Muhammadu Buhari nominated ex-Service Chiefs for Senate approval as non-career Ambassadors-Designate.
  • Their appointment came barely a week after their retirement as service chiefs and their replacement with new ones.
  • This led to a spate of criticisms from some Nigerians who felt that the nation’s security situation got worse under their watch.
  • They were reported to have tendered their resignation from their positions amid heightened calls that they should be sacked due to the increasing rate of insecurity across the country.

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