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Foreigners using Free Trade Zone to evade tax payment after visa expires

Foreigners with business visas are reportedly taking advantage of the Free Trade Zones to evade tax payment for businesses and work done in Nigeria.

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Foreigners using Free Trade Zone to evade tax payment after visa expires

In a period the Nigerian government is looking to increase its revenue base, foreigners with business visas are reportedly taking advantage of the Free Trade Zones to evade tax payment for businesses and work done in Nigeria.

Illegal foreigners are revenue leaks: It was disclosed that the foreigners were going about their business activities without valid visas, as the ones with them already expired. This means that the affected foreigners are in the country illegally and using the Free Trade Zones as their shelter. This is the migrants’ method of evading the taxes that should be paid to the Nigerian government

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According to the Chairman, Senate Committee on Ethics, Privileges and Public Petition, Senator Ayo Akinyelure, the foreigners with expired visas were having permanent stay without government approval. They were also not remitting their taxes to the government as a result of their illegal stay.

“We were made to know that some of them come in with only business visa and after the expiration of three months of stay, they disappeared into different areas of the country like the Free Trade Zones.

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“When you look at the Free Zones today, the majority of workers there are Asians who came into Nigeria for business visit and before you know it, they have permanent stay without the approval of government and without paying kobo into government revenue coffers.

“We believe that the Senate Committee on Interior in the ninth Senate is aware of this and the Committee of Public Petitions is also aware of this.

“So we are calling on the Minister of Interior to be on the same page with the National Assembly for the lawmakers to give them the Bible of Revenue generation in its agencies,” Akinyelure said while suggesting that in order to curb this evasion, the Nigerian Immigration Service needed to prevent migrants’ influx into Nigeria.

[READ MORE: FIRS to brace up on tax compliance policies)

Tax evasion harmful to Nigeria: Recall that the Nigerian government had intensified its revenue mobilisation effort because the Finance Minister, Zainab Ahmed, said Nigeria had a revenue problem. This has led to frantic effort to beef up revenue through several channels including tax reform to fund capital projects.

Recall that the Executive Chairman of Federal Inland Revenue Service (FIRS) Muhammed Nami already expressed doubt over the possibility of meeting President Buhari’s N8.5 trillion revenue target. With this level of tax evasion by migrants, the chances of achieving it continue to look slimmer. And failure to mobilise the needed revenue will affect the completion of capital projects.

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It also increases the need for the Nigerian government to borrow, therefore compounding Nigeria’s debt problem. Akinyelure said the country can no longer afford to continue borrowing just to finance budget and infrastructure.

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Olalekan is a certified media practitioner from the Nigerian Institute of Journalism (NIJ). In the era of media convergence, Olalekan is a valuable asset, with ability to curate and broadcast news. His zeal to write was developed out of passion to shape people’s thought and opinion; serving as a guideline for their daily lives. Contact for tips: [email protected]

1 Comment

1 Comment

  1. Michael nnadozie

    February 24, 2020 at 6:58 pm

    Oga senator abeg .
    I do not think that it is possible to evade direct and indirect taxes in Nigeria .
    If at all that there is anything like “free trade zone” in Nigeria which I doubt , I do not think that business would thrive in such places as for a foreigner to go and invest in such places .
    It is also said , since the inception of our great country Nigeria , it was stated constitutionally that all persons in the geographical location called “niger area” or “area around the river niger” would automatically become Nigerians in as much as they may have family ties with other people or persons in other countries .
    As for migration or traveling from one country to another , there are certain laid down rules and regulations as stated in the Constitution of the federal republic of Nigeria which is in turn enforced by the various law enforcement agencies such as the customs and immigration services , airport authorities , sea port authorities , inland revenue service , the Nigerian police and other security agencies and law enforcement agencies within the country .
    Therefore , I see it as an image damaging statement to the government of Nigeria as a whole and as a statement that would ruin the reputation of our great country Nigeria in the international scene and in our diplomatic relations with other countries of the world .
    So therefore , I would suggest that the government make funds available to prospective borrowers for businesses and investments that would increase the country’s gross domestic products and possibly increase our country’s trade which would in-turn increase our foreign exchange earnings .

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Business News

COVID-19: World Bank approves $114 million response funds for Nigeria

FG is expected to provide grants from the CoPREP to the 36 states and the FCT.

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World Bank approves $2.2 billion loan for Nigeria

The World Bank has approved the sum of $114 million to assist Nigeria in its fight against the coronavirus pandemic.

The fund is to help Nigeria prevent, identify and respond to the dangers associated with the coronavirus disease with special focus on the various states and the Federal Capital Territory.

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This was disclosed in a statement from the bank on Friday, August 7, 2020.

According to the statement, the funds come in the form of $100 million credit facility from the International Development Association (IDA) and $14 million grant from the Pandemic Emergency Financing Facility.

It also states that the Federal Government is expected to provide grants from the COVID-19 Preparedness and Response Project (CoPREP) to the 36 states and the Federal Capital Territory.

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The World Bank Director for Nigeria, Shubham Chaudhuri, in a statement on Friday, said, “Nigeria has ramped up its efforts to contain the Covid-19 outbreak, but more needs to be done at the states level, which are at the front line of the response.”

He disclosed that the project would provide the states with the much needed direct technical and fiscal support in order to strengthen their position in the fight against the pandemic.

The World Bank Chief also pointed out that the project would finance federal procurements of medical equipment, laboratory tests and medicines to be distributed to the states based on their needs.

According to the World Bank, CoPREP would finance further support to all the 36 states and the FCT through the NCDC to implement the COVID-19 Incident Action Plan.

Nigeria has recorded about 45,687 confirmed cases of the coronavirus disease with 936 fatalities and 32,637 people discharged as at August 7, 2020. Some serious concerns have been raised about the country’s testing capacity, which though has improved is still regarded as inadequate.

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Sports

How Nike rejection birthed sports wear industry in Nigeria

To Udezue, sport is more about creating opportunities than just winning trophies.

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How Nike rejection birthed sports wear industry in Nigeria

For many years, Nigerian sports had to depend on foreign brands for all kinds of sporting and leisure wears. In doing this, Nigeria was also ceding to these countries the opportunities that came with the business of sports. None of these changed, until Africa for Africa (AFA) Sports started out in Nigeria years ago.

Recently on Nairametrics Business Half Hour show, Founder of Africa for Africa (AFA) Sports talked about how Nike’s rejection became the birth of an industry in Nigeria.

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Ugo Udezue had come to Nigeria to establish the Continental Basketball League, (CBL) after spending 17 years with BDA Sports management in California. At this time, he saw sports as being “more about creating opportunities than just winning trophies”.

READ MORE: How the United States plans to control the African Development Bank

What he saw was the prospects of creating a whole economy built around the game – alternate relaxation options for workers who had spent long hours at work, and better opportunities for people to trade their wares and entertain guests during the games.

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A major kitting challenge came up for the CBL, as most of the foreign brands did not seem to cater for the African climate. The kits and balls being used had been designed by foreign brands using their weather condition and environment as the guiding factor. Because of this, they could not cater to the needs of the Nigerian basketball players.

“The balls were not designed to absorb sweat and so the players kept dropping the balls. Even the jerseys and shoes had clearly not been designed for the African weather since we did not play the game in air-conditioned courts,” he explained.

READ MORE: Is sports betting gradually making Nigerian youths lazy?

When Udezue reached out to Nike to seek Apparel sponsorship for the CBL, he received the shocking news that “Africa was not in their plans at the time”.

This rejection, though a short term challenge, became the inspiration behind founding AFA Sports, done by Africans to cater to the sporting needs of Africans.

As you may well know, there were foreign companies sponsoring Nigerian teams at the time, making jerseys and other apparel. But because they were not producing these things locally, they were depriving the country of the opportunities and benefits which should have come with such ventures.

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Gradually, Udezue and his team moved from the initial years of chaos and unprofitability, to growing AFA Sports into the biggest performing sports brand in Africa. The company’s products are now shipped to different countries.

In a couple of years, the dream started to materialise when AFA sports became the official apparel sponsor of the Nigerian National Basketball team D’Tigers during the Afro Basket 2017 competition. It was a major game-changer for sporting in Africa.

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READ ALSO: Kobe Bryant: What Nigerian athletes, business owners must learn

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An industry waiting to explode

Manufacturing in Nigeria is often thought of along the lines or agricultural and industrial products, without much attention on the sporting and leisure industry. From jerseys to tracksuits, leisure wears, boots, balls, caps and others, there is a whole economy waiting to be explored.

“I saw sports as a way to create wealth. I realised that it was an opportunity to create jobs for Nigerians while meeting the need for football clothing, and for as long we keep sourcing these materials from the foreign brands, we will miss out on ways we could have used it to empower our economy,” Udezue said.

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With these items produced locally at the factories and even exported to other countries, jobs are created for Nigerians. AFA sports, for instance, has three factories in Lagos state where it employs people to carry out its productions of sports and leisure wears.

READ MORE: COVID-19: Shutdown of sports is crippling the world economy – Oma Akatugba

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Beyond saving Nigeria the cost implications of importing such products, the products are now being exported to other African countries bringing in some foreign exchange for Nigeria.

As Nigeria moves towards self-sufficiency, there is the need to pay attention to the sports economy and its attendant benefits. Much more than sponsorships, hosting games in local economy can turn the fortunes of small business owners in the locality, given them a wider market and increased income.

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Tech News

Facebook, Microsoft lash out at Apple over gaming apps

Microsoft and Facebook facing challenges in bringing cloud gaming services on iOS devices.

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Apple iPhone 11, Tax battle: Apple challenges $14 billion court case , Apple to pay $500 million settlement in lawsuit over slow iPhones, Apple supplier Foxconn to reopen manufacturing base in China, Apple donates 10 million face masks to healthcare workers, App developers can now challenge Apple store guidelines 

The world’s leading technology brands, Facebook and Microsoft, recently bashed Apple for its restrictive App Store policies, which they claim prevents them from launching their gaming services on Apple devices.

Microsoft also disclosed that it will no longer be launching a limited testing version of the app on iOS. The gaming platform Microsoft had created for Apple devices can only support one game, which Microsoft said was due to Apple’s App Store policies.

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READ MORE: Apple, Facebook record impressive earning results in spite of COVID-19 disruptions

Microsoft’s concern

Microsoft revealed that such policies set by Apple will make it unable to launch its game streaming service commercially on iOS due to these limitations.

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“Unfortunately, we do not have a path to bring our vision of cloud gaming with Xbox Game Pass Ultimate to gamers on iOS via the Apple App Store,” a Microsoft spokesperson said in a statement Friday.

“Apple stands alone as the only general-purpose platform to deny consumers from cloud gaming and game subscription services like Xbox Game Pass. And it consistently treats gaming apps differently, applying more lenient rules to non-gaming apps even when they include interactive content.”

READ ALSO: Facebook rivals TikTok with launch of video-sharing product inside instagram

Facebook’s concern

The social media giant finally struggled to launch an Apple version of its gaming app on Friday, but it disclosed that it was compelled to make a concession to bring it on Apple’s App Store and had to remove the ability to play games instantly.

“Unfortunately, we had to remove gameplay functionality entirely in order to get Apple’s approval on the standalone Facebook Gaming app – meaning iOS users have an inferior experience to those using Android,” Facebook’s Chief Operating Officer Sheryl Sandberg said in a statement Friday.

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“We’re staying focused on building communities for the more than 380 million people who play games on Facebook every month — whether Apple allows it in a standalone app or not.”

Microsoft and Facebook seem not to be the only ones facing challenges in bringing cloud gaming services on iOS devices. Google’s Stadia and Nvidia’s GeForce had also experienced difficulties in launching iOS versions of their apps due to the App Store’s guidelines.

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READ MORE: Apple unveils a new credit card, Apple Card

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Will Apple cave in?

“There is quite a lot of pressure building from different entities, and they are attempting to build consumer awareness of the issues involved as a way to convince Apple to change its policies,” Piers Harding-Rolls, research director of games at Ampere Analysis, told CNBC.

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“Is it inevitable that Apple will cave in? Not necessarily. Apple is plowing its own path with privacy and how it wants to manage its ecosystem.”

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