Tobi Aminu

MTN Nigeria, on Friday, admitted to a technical disagreement between it and the Federal Inland Revenue Service on how the 2015 fine should be treated for tax purposes. Mr Onome Okwah, Manager, Public Relations and Protocol, Corporate Affairs/Corporate Relations, MTN, disclosed this in a statement in Lagos. According to him, the organisation’s attention has been drawn to media reports regarding the status of taxes relating to the 2015 fine imposed on MTN. He, however, added that while the monies had been paid to FIRS, MTN had taken the disagreement to the Tax Tribunal set up by the FIRS Chairman and Minister of Finance and were awaiting its decision. “MTN remains fully compliant with the Nigerian tax laws and will abide by the findings of the tribunal. “The company is committed to meeting its fiscal responsibilities and contributing to the social and economic development of Nigeria. “Since incorporation in 2001, MTN has invested more than N2 trillion in the Nigerian economy and has paid more than N1.7 trillion in taxes, levies and other regulatory fees. The News Agency of Nigeria reports that Mr Babatunde Fowler, Chairman, FIRS, recently accused MTN of deducting tax from the N330 billion fine it paid to the Nigerian Communications Commission. Fowler maintained that fines and penalties for regulatory infractions were revenues paid to the Federal Government and should not be subjected to any tax deduction. NCC had in October 2015 imposed a N1.04 trillion fine on the telecommunications giant for alleged non-compliance with the deadline set by the commission to disconnect all unregistered SIM cards. The regulator reduced the fine to N780 billion in December 2015, having taken into consideration the stability of the telecommunication sector. The fine was further reduced to N330 billion after MTN had agreed to be listed on the Nigerian Stock Exchange.   Source: Punch

HMRC plans to introduce new rules for taxpayers and intermediaries on cross-border tax planning, and which might affect British residents’ who buy overseas properties. Thinking of buying a holiday home in the Dordogne? The taxman needs to know HMRC plans to introduce new rules for taxpayers and intermediaries on cross-border tax planning, and which might affect British residents’ who buy overseas properties. It is not uncommon for those buying this type of property to be offered alternative ways of holding the asset. If the main benefit is the avoidance of tax the details will need to be reported to HMRC. HMRC acknowledges that one of the primary purposes of their proposals is to refine the requirement to report tax planning where cross-border transactions are involved. The taxman is aware that historically UK residents have acquired overseas assets with undeclared income and have used offshore structures to hide the asset from the tax authorities. HMRC is concerned that unless they are informed at the time of the transaction there is a risk that tax could be lost. HMRC is interested in the source of the funds used to acquire the holiday home, how the maintenance costs are paid, whether the letting of the property generates rental income or whether a capital gain is made when the property is sold. If HMRC is told of the acquisition of the property, this will allow them to consider if there were any concerns with how the taxpayer funded the property and met the running costs. HMRC also wishes to gather information on tax planning solutions offered to taxpayers to judge whether one of the benefits would be the avoidance or evasion of taxes. The government has undertaken to share this information with other EU member states to ensure that cross-border transactions are not used for this purpose. Brits with overseas assets have been under the spotlight since the mid-noughties, as HMRC has continued to target offshore income and gains not previously reported. Starting in January 2016, data was gathered by banks under the OECD’s Common Reporting Standard (CRS) for the automatic exchange of information. This required the participating tax authorities to exchange information with the country in which the account holder was tax resident. HMRC has also cracked down on marketed tax avoidance schemes, and the facilitation of tax evasion by professionals and intermediaries both inside and outside the UK. The government is consulting on new legislation that will require the disclosure of cross-border tax avoidance arrangements. The requirement to report will apply even when the planning is not adopted, all that is necessary is that the promoter has made the planning available to or discussed it with the taxpayer. All parties involved will need to disclose details of the planning, with taxpayers required to report the planning on their personal tax returns. Under the terms of the OECD Directive, the relevant tax authorities will use the information to target tax avoidance and evasion and, where appropriate, share the information with EU member states. The consultation document makes it clear that there may need to be a report made, even where the planning may be in line with and in the spirit of the law. HMRC’s concern is that there is a risk that avoidance or evasion of tax could still be one of the main benefits of the planning.   Source: Legit

Many stakeholders in the Nigerian maritime industry are worried about the import tax imposed on new vessels. They say this may put them at a competitive disadvantage among other African countries in a free market. A former Director General of the Nigerian Maritime Administration and Safety Agency, Mfon Usoro, observes that whereas aircraft brought into Nigeria are registered at zero per cent duty, a shipowner is required to pay 14 per cent of the cost of a new vessel as tax. According to her, this makes people still patronise a temporary importation route because it is cheaper for them than to pay tax and register their vessels in Nigeria. On AfCFTA, Usoro, who spoke at a public lecture recently, said the fear of operators was that of competitiveness. She said, “If you are charging import tax on a Nigerian flagged vessel at 14 per cent of the cost of the vessel and above, South Africa charges zero import tax. “For the Nigerian flagged ship, there is a multiplier effect on everything that is dependent on that trade or vessel. It means the operational cost in South Africa is low; everything is low. So, they cannot compete with Nigeria who is already setting the shipowner up for failure. “So, we are afraid that the business that should come to us will go to other countries that are competitive.” She added, “The point is not about dumping because there are ways we can stop the goods from coming in.  It is competitive pricing. If you want us to buy goods from Nigeria instead of buying from Togo, if your goods are more expensive than those of Togo, why should we buy from you? If your port charges are higher than Togo port charges, how will your goods be competitive?” In addition to this, operators also decry the lack of conducive environment in the maritime sector. The President, Seaports Terminal Operators Association of Nigeria, Mrs Victoria Haastrup, says, “I am suffering; my people are suffering because of the enabling environment that is just not there. “When a ship comes from China, Europe and anywhere in the world, when it berths, you cannot be sure of when it will be able to discharge and go back. And time is of essence to ships. You know what that is costing the importers and the charterers. “In other parts of the world, there is automatic digitisation. Right from the control room, ships are being discharged; you don’t see a single human being. “You sit in your house, log onto the Internet and you can clear your goods without going to the ports. But that cannot happen in Nigeria.” Analysts lament that apart from lack of full automation, the poor condition of roads linking the ports result in trucks spending months on the road trying to access the ports. Stakeholders in the productive sector of the economy had for years reportedly been reluctant to embrace trade pacts that would open the Nigerian market to competition from outside. The high cost of doing business in Nigeria, according to them, is bound to make them vulnerable when pitched against operators in low-cost business environment. Nigeria occupied the 146th position out of 190 countries in the 2018 World Bank Ease of Doing Business rankings. This was even as Ghana, Nigeria’s close neighbour and competitor in the African market, ranked 114, while Cote d’Ivoire ranked 122, Togo ranked 137. Other countries that will compete with Nigeria in the free trade market are Rwanda, which ranked 29; Kenya, 61; Senegal, 141; Egypt, 120; Mozambique, 135 and Jamaica, 75, among others. While reacting to President Muhammadu Buhari’s signing of the pact on July 7, the Director General, Manufacturers Association of Nigeria, Segun Ajayi-Kadir, said, “We shall work together to prevail on the government to do its bit by providing the conducive atmosphere. The infrastructure challenge that constitutes supply constraints should be removed.   Source: Punch