August 30, 2019

CAC extends 50% cut for biz registration fee by 3 days

The Corporate Affairs Commission (CAC) has extended by three days the 50 per cent reduction in the registration fee for Business Names with effect from 13th August, 2019. A statement signed by the Commission’s Head of Public Affairs, Moses Adaguusu, revealed that the fee cut would now end on Friday, 16th August, 2019. “The three day extension is to enable Micro, Small and Medium Enterprises (MSMEs) that could not register their businesses during the promo because of the Sallah holidays to do so,” the statement stated. CAC said registration of their businesses will enable them own corporate accounts with Banks, have access to loans, grants and other government interventions. “Members of the public are enjoined to take advantage of the three Day extension to register their Business Names at the reduced cost of N5,000. Registration can be done online or at any of the Commission’s Offices nationwide,” the statement added.   Source: Daily trust

CAC registers 220,773 MSMEs in 10 months

The Corporate Affairs Commission on Monday announced that it registered 220,773 Micro, Small and Medium Enterprises in the last 10 months. The CAC said in a statement issued by the commission’s Head of Public Affairs, Moses Adaguusu, in Abuja. It said that the MSMEs were registered between October 2018 and July 31, adding that it had also extended by three days, the 50 per cent reduction in the registration fee for business names window, under its Business Incentive Strategy. The commission said with the extension, the promotional reduction fee would now end on Friday, August 16. It explained that the three-day extension was to enable micro, small and medium enterprises that could not register their businesses during the promo because of the Sallah holidays to do so. Adaguusu said, “From when the BIS started in October 2018 to July 31, the commission registered at least 220,773 MSMEs under the BIS window. The list is growing day by day. “Registration of their businesses will enable them own corporate accounts with banks, have access to loans, grants and other government interventions.” The commission urged members of the public to take advantage of the three-day extension to register their business names at the reduced cost of N5, 000. It said registration could be done online or at any of the commission’s offices nationwide.   Source: Punch

Namibia Joins International Taxation Initiative

Namibia has joined a consortium of over 130 countries seeking to tackle tax avoidance, improve the unity of international tax rules, and ensure a more transparent international tax environment. This was revealed by the Organisation for Economic Cooperation and Development (OECD) last Friday in an announcement made on its website. Namibia’s joining follows the European Union’s listing of countries which were non-cooperating in 2017 around the strengthening of local taxation rules in combating tax avoidance, which in certain cases fosters illicit financial flows and money laundering. The EU removed Namibia from the list in 2018 after the government made sufficient commitments to address the taxation concerns. Among the commitments made were subscribing to an inclusive framework, or implementing the base erosion and profit shifting (BEPS) minimum standards. The Namibian reported in June this year that Cabinet had directed the finance ministry to ensure that such commitments were attended to within this year. The BEPS project was founded in 2012 to address tax planning strategies used by multinational enterprises which exploit gaps and mismatches in tax rules to avoid paying tax. “Developing countries’ higher reliance on corporate income tax means they suffer from BEPS disproportionately. These practices cost countries US$100-US$240 billion in lost revenue annually”, read an explainer on the OECD website. The 15-action plan initiative addresses taxation challenges arising from digitalisation, limitation of interest deductions, harmful tax practices, the prevention of treaty abuse, permanent establishments, transfer pricing and mis-pricing, mutual agreement procedures, as well as multilateral instruments and mandatory disclosure for countries, amongst others. Minister of finance, Calle Schlettwein said in his budget speech this year that his ministry would be working on measures which would ensure tax loopholes costing government are closed off. “Key tax administration reforms will be implemented, such as leveraging regional and international tax cooperation as a mechanism to enhance national technical capacity in various areas of tax administration such as transfer pricing and illicit financial flows,” he stated. BENEFITS According to the OECD, the joining of countries such as Namibia ensures inclusiveness and participation in the development of international standards on corporate taxation. “As such, capacity-building support for developing countries is core to the inclusive framework, prioritising active, equal participation in the BEPS process, ” the explainer added. Other benefits include the deployment of tax inspectors without borders that aid in building tax audit capacity around the world, as well as assist developing countries to successfully implement their BEPS priorities. The OECD has 130 countries worldwide subscribed to its BEPS inclusive framework, with over 20 African countries such as South Africa, Zambia, Angola, Botswana and Mauritius also involved, while the Global Forum on Transparency and Exchange of Information for Tax Purposes has 154 members.   Source: All Africa

Tax: Responding to Oxfam’s inequality warning

Nigeria has continued to engage the attention of the world as a paradox of lack in the midst of plenty. As a country blessed with abundant human and natural resources, Nigeria has puzzlingly remained stuck in a perilous dalliance with poverty, coming across as a society where very few are outrageously well-heeled, while the clear majority continue to wallow in abject poverty. It is a scenario that has to change for the country to take the right steps forward. In a new report by Oxfam, an international development organisation, Nigeria was described as the powerhouse of inequality in West Africa. She is seen as a place where inequality has reached a crisis level, with the government showing very little or no commitment to alleviating it. This is quite disconcerting because Nigeria has no business with poverty if the country’s enormous resources are managed responsibly. Yet, it is not as if the report, co-authored with Development Financial International, a financial consultancy, has come as a total surprise to watchers of events in the oil-rich country. Where most oil producing countries have been able to deploy their immense yields from oil sales to enhance the quality of life of their citizens and develop their infrastructure to the level of first world countries, Nigeria, a major oil producer, has remained trapped in dysfunctional governance with primitive and decrepit social infrastructure. Oxfam’s report reinforces an emerging pattern that has been sustained over a period of time. In a similar report released last year, Nigeria was ranked worst for two years running on policies meant to reduce inequality. Out of 157 countries surveyed on their commitment to policies on labour rights, taxation and social spending – indicators for addressing inequality – Nigeria placed 157th. She shamefully trailed countries such as Uzbekistan, Haiti, Chad and Sierra Leone. With the exception of Sierra Leone, in this year’s report, Nigeria was once again trumped by these same countries. What really riles the authors of this report is that inequality continued to bloom at a time when the economy of the country was doing well. This was captured in a portion of the report that said, “Poverty in Nigeria is particularly outrageous because it has been growing in the context of an expanding economy, where the benefits have been reaped by a minority of the people, and have bypassed the majority of the people.” Nothing could be further from the truth, especially given some of the statistics the United Kingdom-based organisation relied on to arrive at its conclusions. Last year, it suddenly dawned on many that the world would not be able to meet the 2030 deadline of the United Nations Sustainable Development Goal for poverty elimination because of the rate of poverty in Nigeria. The country was officially crowned the poverty capital of the world, where more than 90 million people live on $1.9 per day and six people drop below the poverty line every minute. A critical look at the trajectory of poverty growth in Nigeria shows that, between 2000 and 2010, when the price of oil, the mainstay of the economy, rose to unprecedented levels, and annual economic growth averaged seven per cent, the number of people living below the poverty line grew from about 69 million to 112 million. This is “equivalent to 69 per cent of the population,” the Oxfam report stated. Oxfam said about $24 billion would be required to lift these unfortunate Nigerians out of poverty, ironically, an amount less than the combined wealth of the five richest Nigerians. Amidst this excruciating poverty, Paul Wolfowitz, a former World Bank president, stated that $300 billion of oil wealth was looted in the four decades to 2016. It is, therefore, easy to link poverty in Nigeria with large-scale corruption. Aside from corruption, the Nigerian conundrum can easily be traced to poor management of resources and astronomical cost of governance, among other reasons. People see politics, not as a call to service, but as the easiest means of accumulating wealth. A Nigerian senator, for instance, earns N13.5 million (about $37,000) monthly, as running cost, as against his counterpart in the United States, the richest country in the world, who grosses $174,000 annually. Governors also pocket billions of naira as security vote for which they render no account. On top of that, governors and the President hire thousands as aides, commissioners and ministers. Their foreign trips, funded by taxpayers, easily pass for a jamboree. On June 19, 2012, for instance, a former president, Goodluck Jonathan, travelled to Brazil for the United Nations Earth Summit with an entourage of 116 people. These are some of the bizarre ways that public funds are expended. The Nigerian authorities, therefore, need to take steps to address the issue of inequality if they are desirous of building a just, equitable, peaceful and prosperous nation that can be the pride of the continent. There is no surer ticket out of poverty than a solid education. To make a meaningful difference, education has to be affordable and equally distributed. Last year, American philanthropist, Bill Gates, faulted the lack of adequate social spending in the country. Nigeria has to start investing adequately in education to return the over 13.5 million out-of school children to school. Health facilities also need to be overhauled to prevent high infant and maternal mortality rate in the country. The issue of minimum wage should also be implemented as quickly as possible to ensure that what people take home at the end of the month can actually sustain them till the next payday. The rich must be taxed at a reasonable rate. At the current estimate of six per cent, Nigeria has one of the lowest tax compliance rates in the world. The tax system has to be reformed to ensure that those who should pay tax do so. Besides, the business environment has to be conducive to aid job creation and ensure that more people are captured in the tax net, not a situation described by Oxfam where

Nigerian govt considering VAT exemption extension — VP

The Federal Government is considering an extension of the value added tax (VAT) exemption on capital market transactions, Vice President, Yemi Osinbajo, has said. Also, the VP said the government is already taking steps to resolve the controversy over the collection of stamp duties. The VP spoke at the Awards Night of the Association of Issuing Houses of Nigeria (AIHN) in Lagos on Saturday. He was represented by the Acting Director General of the Securities and Exchange Commission (SEC), Mary Uduk. In 2014, then Minister of Finance, Ngozi Okonjo-Iweala, suspended VAT charges on transactions in the capital market to encourage increased trading activities in the market. That waiver period ended on July 24 this year. The VP said the government will soon announce the decision on how the issue, along with others, like the controversy over collection of stamp duties, have been resolved. Backstory. The Nigerian Postal Service (NIPOST) is of the view it should collect and keep stamp duties on electronic banking. This appears to contravene the constitutional requirement that all revenue collections by government ministries, departments and agencies should be transferred to the Federation Account. The NIPOST argues it should use monies realised from stamp duties collections to run its operations. The Chairman of the Federal Inland Revenue Service (FIRS), Tunde Fowler, recently the law confers on the revenue service the mandate to collect the money on behalf of the Federation Account. “The issue is now in court between the consultant (for NIPOST) and the government. So, pending the resolution of the controversy, the money is being warehoused in the CBN,” Mr Fowler said. “The position of government is that any money collected as stamp duty should be deposited in the federation account to be shared among the three tiers of government. “Government is working on a new bill to take care of this stamp duties. But, under the existing laws, it is the mandate of the FIRS to collect that money on behalf of the Federation Account,” he added. Other efforts to strengthen capital market. According to the VP, work has commenced on other aspects of Capital Market Master Plan Implementation Council (CAMMIC) requests requiring government intervention. He said government would collaborate with the capital market community to address the issues affecting it’s growth. “We all desire a capital market that would broaden access to economic prosperity by enabling the emergence of financially responsible citizens, accelerating wealth creation and wealth distribution, providing capital to small and medium scale enterprises, and catalyzing housing g finance,” the VP said. He described the capital market as key to achieving the economic goals of the present administration as contained in the Economic Recovery and Growth Plan (ERGP). According to the VP, government has worked hard to ensure a stable macroeconomic environment, to attract and sustain investment needed to move the economy forward. The ERGP recognizes critical sectors for financing to include agriculture, infrastructure, power as well as small and medium enterprises (SMEs). President of AIHN, Chuka Eseka, urged the private sector and the capital market to play driving roles in achieving economic prosperity and development by partnering with the government at all levels.   Source: Premium Time