October 15, 2019 – Sunmola David & CO

NESG advocates reduction in taxes, competitive economy

The Nigerian Economic Summit Group has emphasised the need for the government to reduce the number of taxes levied on businesses in the country. The NESG said out of about 3,000 forms of taxes operational across the country from the federal to the local government level, only four of them generated 96 per cent of government revenue. Ogun State, preparatory to the group’s summit slated for October 7 and 8. Jaiyeola also urged the Federal Government to ensure that modes of finance were prepared together with the budget. He said, “You can spend all the time analysing budget. The question is, to what extent do we take it seriously? Not only that we should have a budget, but also we should also have a finance bill. You don’t talk just about the budget; you also talk about how to get the money to fund the budget. “Part of the work we have done recently is to tell the government that there are so many taxes. There are over 3,000 taxes across Nigeria from federal to state and local government levels. Only four provide 96 per cent of government revenue. Part of the things we are telling the government is to streamline the taxes.” Jaiyeola stated that the theme of the summit, “2050: Shifting Gears,” would examine how the government could prepare for Nigeria’s population projected to be the third biggest in the world by 2050. The NESG CEO said the office of the Minster of Finance, Budget and National Planning had agreed to work with the group, noting that the summit would identify the key things to drive the economy. He explained that after the event, a “green book” which is a summation of all the agreements reached at the summit would be presented to the Federal Executive Council for consideration. “We also distil the conclusion into policy commissions where we have about 45 thematic areas, ranging from health, education, agriculture, infrastructure and even sport. “The policy commission is a collection of public and private sectors. Their role is to constantly engage the government to ensure implementation. “By 2050, it is established that if we go on present trajectory, Nigeria will be the third most populous nation in the world. The question is: how do we embrace that? “Our vision is that Nigeria must be an economy that is competitive, market-driven, innovative and inclusive. Part of our major problems is lack of inclusion.” Jaiyeola commended President Muhammadu Buhari for its new Economic Advisory Council and also urged the government to listen to its recommendations. Source: Punch

NESG advocates reduction in taxes, competitive economy Read More »

Oyo exempts churches, mosques from tax net

TAX SERVICES / Tobi Aminu

The Oyo state government at the weekend exempted churches and mosques from paying levies and taxes to the coffers of the state. The government position was in sharp contrast to the immediate past administration which stipulated certain amount of money to be paid by religious houses, corporate bodies, among others as security levies. The Executive Assistant to Governor Seyi Makinde of Oyo state, Rev. Idowu Ogedengbe made this known at the thanksgiving mass to celebrate the 70th year birthday of the Catholic Archbishop of Ibadan diocese , Most Rev . Gabriel Abegunrin held at the Church of Ascension, Bodija, Ibadan. Ogedengbe spoke as the Publisher of the defunct Third Eye newspapers, Chief Akanni Aluko; the Ooni of Ife, Oba Adeyeye Enitan represented by Oba Fayemi Olumayowa; the President , Catholic Bishops Conference of Nigeria, Most Rev. Augustine Akubueze; Ekerefe of Erefe of Ife , and members of Olubadan Advisory Council including High Chief Eddy Oyewole nodded with enthusiasm. He clarified its position on the controversy on whether places of worship in the state are to pay taxes or not, following the criticism that greeted the move during the last administration. Though, he stated that any places of worship that do business , such as establishing of schools, university, hospital, bakeries, and so on must pay tax to the government since it was a profit making venture. Source: Punch

Oyo exempts churches, mosques from tax net Read More »

High tax regime slowing business growth — Expert

TAX SERVICES / Tobi Aminu

The Head, Tax and Corporate Advisory Services, PwC Nigeria, Taiwo Oyedele, has said the high company income tax rate in the country is a disincentive for business growth. Oyedele, while speaking during the Finance Correspondents Association of Nigeria annual workshop, themed ‘Unlocking opportunities in Nigeria’s non-oil sector’, said Nigeria had one of the highest company income tax rates globally. According to him, Nigeria is among the top 10 in the world with highest income tax rate. Oyedele said, “We pay Company Income Tax at 30 per cent, education tax at two per cent and 10 per cent withholding tax on whatever is left. “If you add it together, it is more that 40 per cent already. If you now make a mistake of having a group and you say it is a holding company, that is another 30 per cent. Who does that?” Oyedele revealed that there existed a commencement rule, which was supposed to punish start-ups during commencement by making them pay tax twice. He noted that to address the challenge, operators in the private sector should focus on demanding removal of some of the disincentives that affected business operations. He said, “What I keep saying to government is that I can insist that I have a small pot and I must get 60 per cent of the pot by all means or I allow the pot to be big enough and then get 10 per cent of it. “Government must remove tax disincentives. One thing I am asking the business community is stop asking the government for incentives because they will think they are doing you a favour. Ask them to remove the disincentives that are not allowing us to do business.” Oyedele called on the authorities to change their thinking about taxation, saying the current approach had only made compliance difficult. According to him, the thinking of citizens around taxation is completely upside down. He said, “As a government, I should help you make money so that you can pay me tax; It is just common sense. Nigeria has a tax system that does not allow businesses to thrive, whether you are small or big. “The reason Nigeria cannot make money from tax, and it is not a curse, is that it continues to beat up the people at the bottom of the ladder. But they cannot give you what they do not have.” Oyedele said if the government could focus on the top one per cent rich and big companies, they would get the desired tax results. Source: Punch

High tax regime slowing business growth — Expert Read More »

NASS must pass bill on VAT increase before implementation, Falana tells FG

Tax news / Tobi Aminu

Human Rights Lawyer, Femi Falana, has called on the Federal Government to propose a Money Bill to the National Assembly before the implementation of the increase in Value Added Tax. Falana told the News Agency of Nigeria in Abuja that the National Assembly erred by inviting the Minister of Finance and the Executive Chairman of Federal Inland Revenue Service to clarify issues of VAT increment. According to him, provisions of the constitution states that the President ought to have presented a Money Bill to be passed by the NASS before the increment. “It’s illegal. Under a democratic dispensation, you cannot impose tax or increase tax without a law made by the National Assembly or the State Assembly as the case may be. “In this case, it has to be realised that we are not under a military dictatorship. “By virtue of section 59 of the Nigerian Constitution, any increase, levy or tax will have to be presented to the National Assembly by way of Money Bill by the President, it has to be passed into law. “The Senate erred in law by inviting them to come and clarify. The National Assembly has invited the Minister of Finance and the Federal Inland Revenue Services to come and clarify. “No, the National Assembly must insist on its powers under Section 59 to pass a law to increase VAT or any tax, there can be no taxation without legislation. “The Federal Executive Council has no power under the Constitution to increase VAT or any tax in the country,” Falana said. NAN recalls that the Federal Executive Council had last Wednesday approved the increment of VAT from 5 per cent to 7.5 per cent. The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, had explained that the increase would only begin after the VAT Act was amended by the National Assembly and after consultations with the state and local government areas as well as the Nigerian populace. Source: Punch

NASS must pass bill on VAT increase before implementation, Falana tells FG Read More »

P&ID representatives plead guilty to fraud, tax evasion

TAX SERVICES / Tobi Aminu

Two representatives of the Process and Industrial Development Ltd on Thursday pleaded guilty before the Federal High Court in Abuja to charges of fraud and tax evasion instituted against them in respect of the contract leading to the recent controversial judgment of a British court empowering the firm to seize about $9.6bn worth of Nigerian assets. The Economic and Financial Crimes Commission on Thursday arraigned P&ID Ltd, Virgin Island, its Nigerian affiliate, P&ID Nigeria Ltd on 11 counts of fraud and tax evasion. While P&ID Ltd, Virgin Island was represented by its Commercial Director, Mohammad Kuchazi, P&ID Nigeria Limited was represented by Adamu Usman, who is also a lawyer. Both men pleaded guilty to all the 11 counts read to them before Justice Inyang Ekwo on Thursday. Kuchazi was represented by his lawyer, Dandison Akurunwua, while Usman represented himself. They were accused of, among others, fraudulently claiming to have acquired land from the Cross River State Government in 2010 for the gas supply project agreement which led to the $9.6bn judgment. After the defendants pleaded guilty to the 11 counts, an EFCC investigator, Usman Babangida, was called to the witness box for review of facts which was not opposed by the defence. Documents relating to the controversial 2010 gas supply contract and EFCC’s investigation activities were tendered and admitted by the judge as exhibits without objection from the defence. The judge then went on to pronounce the two firms represented by the two men guilty. The prosecution led by Bala Sanga has asked Justice Ekwo to order the winding up of the company as the sentence for the offences. Source: Punch

P&ID representatives plead guilty to fraud, tax evasion Read More »