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Business News
FIRS to deploy new technology in tax collection, as MDAs refuse to pay 7.5% tax
The Federal Inland Revenue Service (FIRS) has announced the commencement of its plans to deploy technology in collection of government revenue.
The Federal Inland Revenue Service (FIRS) has announced the commencement of its plans to deploy technology in collection of government revenue.
This new technology will connect all business premises in the country to a central server, from where all their transactions will be monitored based on the globally accepted standards.
Hon. James Faleke
FIRS’s Executive Chairman, Mr. Mohammed Nami, disclosed this in Abuja at a meeting with the members of the House of Representatives’ Committee on Finance chaired by Hon. James Faleke.
He, however, pointed out that several business premises in the country were resisting the moves of the revenue collection agency to connect them to the server, thus slowing down the implementation process.
[READ MORE: FIRS issues deadline for taxpayers to obtain Tax Identification Number)
He noted that this technology had become necessary for the agency to keep up with global trends in revenue collection, and cut down the leakages in the system. Nima added that FIRS already sent an executive bill to President Muhammadu Buhari through the Office of the Attorney General of the Federation to allow it deploy this technology in generating revenue, saying when the order is applied, the FIRS would be able to generate huge revenue for the government.
He said that even though Nigeria is the number one economy in Africa, it ranked far behind South Africa in terms of tax to GDP growth as a result of leakages in the system. According to him, while tax to GDP growth in Nigeria stands at about 6.3%, tax to GDP in South Africa is 27%, while the average tax to GDP growth in Sub-Saharan Africa stands at 17%.
He noted that the FIRS had battled with the issue of revenue leakages for years, and as a result, the revenue agency was not able to generate sufficient revenue for government to fund its budget.
Nami also decried the refusal of some Ministries, Departments and Agencies (MDAs) to pay 7.5% Value Added Tax (VAT), on the claims that the contracts awarded by them were still based on the old 5% VAT rate.
This, in addition to the several Nigerians who continue to avoid tax payment, has clogged the wheels of the agency in carrying out its core responsibility of revenue generation.
He also accused some multinational companies operating in Nigeria of not paying the required tax to government, but hiding under the pioneer status to get tax exemption for a period of five years instead of the three years contained in the laws.
[READ ALSO: FIRS tightens noose on deduction of stamp duty, CIT, others)
In view of this, the FIRS was seeking the support of the National Assembly to amend the laws dealing with pioneer status for companies, insisting that several companies in the country were abusing the law and getting tax waivers they did not deserve.
The Finance Act 2019 was gazetted with a commencement date of 13 January 2020, implying that the new VAT rate of 7.5% replaces the old 5% effective from 13 January 2020. According to Nami, even at 7.5%, Nigeria’s tax rate stands as the lowest in Africa.
Financial Services
CBN to bar exporters with unrepatriated export proceeds from banking services
The CBN will from January 31, 2021 bar all exporters with unrepatriated export proceeds from accessing banking services.
Financial Services
Niger Insurance Plc gets shareholders nod to restructure business
Niger Insurance Plc has announced plans to restructure its insurance business into distinct but mutually dependent business entities.
Niger Insurance Plc has obtained shareholders’ approval to restructure its insurance business into general, life and business insurance, with each segment to be structured as a separate legal entity.
This is part of the resolutions passed at the 50th Annual General Meeting of Niger Insurance Plc., held on 20th of January, 2021 at Peninsula Hotel in Lekki, Lagos.
The decision to restructure the company is in a bid to make it more efficient and profitable to stakeholders, especially as efforts are geared towards overturning a loss of about 1,1723.2% Year-on-Year, earlier made by the company in its last reported financial statement, Q2, 2020, as reported by Nairametrics.
Other key decisions reached at the 50th AGM include;
- The re-appointment of Mr Ebi Enaholo and Mrs. Olufemi Owopetu as Directors of the company.
- Acceptance of the presented financial statement for the year ended December 31, 2019 and the report of the audit committee, directors and auditors.
- Directors were authorized to fix the remuneration of the auditors.
- Directors were authorized to appoint external auditors to replace retiring auditors of the company.
- The appointment of four individuals as members of the audit committee.
- A decision to restructure the company’s business capital was also reached.
In case you missed it: The shareholders of Niger Insurance Plc in the 49th Annual General Meeting approved the decision by the company’s board to raise additional capital to the tune of N15 billion, in a bid to meet the revised recapitalization targets for general and life insurance companies.
What you should know: The House of Representatives had in December 2020 directed NAICOM to suspend the mandatory deadline for the first phase of 50%-60% of the minimum paid-up share capital for insurance and reinsurance firms.
Energy
Nigeria’s Qua Iboe crude exports resume as ExxonMobil lifts force majeure
ExxonMobil has lifted a force majeure on Nigeria’s Qua Iboe crude oil exports as production resumes.
ExxonMobil has lifted a force majeure on Nigeria’s Qua Iboe crude oil export terminal, as crude exports resume for the first time in almost six weeks after a fire at the terminal halted operations.
This is according to a company spokesman yesterday, who confirmed the company had lifted force majeure on Qua Iboe crude loadings.
Qua Iboe production started to ramp up to normal levels of 200,000 b/d in the past week, according to sources, with the release of both the February and March loading programs.
The VLCC Dalia was also in the process of loading a 1-million-barrel stem at the Qua terminal since January 21, 2021, according to data intelligence firm Kpler. This will be the first export of Qua Iboe since December 15, 2020, after a fire hit the facility and injured two workers.
The company has been under pressure since the closure and prices have taken a hit as a result of the disruption. S&P Global Platts last assessed the grade at a discount to Dated Brent of 50 cents/b, down from a premium against the benchmark in December.
Bonny Light, a mainstay Nigerian crude which typically trades at roughly the same level as Qua Iboe, was last assessed 30 cents/b higher.
What they are saying
One trader said: “If you get a cargo of Qua now it could be 50 cents to a dollar below Bonny even – a January cargo is completely out of cycle and the reliability issues mean people won’t touch it.”
Another trader stated that: “[The return of Qua Iboe] is not what West African crude assessments (WAF) differentials needed.”
What you should know
- Qua Iboe is one of Nigeria’s largest export grades, and is very popular among global refiners, with India, the US, Canada, Italy, Spain, Indonesia, and the Netherlands being key buyers.
- Qua Iboe is light sweet crude, which has a gravity of 36 API and sulfur content of 0.13%. The crude, produced from fields 20-40 miles off the coast of southeast Nigeria, is brought to shore at the Qua Iboe terminal via a seabed pipeline system.
- Indian demand has steadied following a buying spree late last year, and European demand has been hit by renewed coronavirus lockdowns in the region.
- Prices for Nigerian crude have suffered in recent weeks, even with lower supply due to the outage.
- February and March loading programs have been issued for Qua Iboe averaging 169,643 b/d and 153,226 b/d respectively.
- Production of this key grade ranged between 180,000-220,000 b/d in 2020, according to S&P Global Platts estimates.
