Tobi Aminu

The Rivers State Internal Revenue Service (RIRS) has unveiled a new tax for the informal sector, promising to be fair in its collection. The RIRS Chairman, Mr Adoage Norteh, made the disclosure at a news briefing in Port Harcourt on Monday. The chairman said that members of the public would begin to pay for every space they would use aside from their stores, offices and business spaces. “If you want to put up a business in any corner of the state, we may not ask you not to do so but we will ask you to pay a fee because that space belongs to everybody in the state”, NAN quoted him as saying. “We want to face those informal people whose addresses are not known, those who are selling by the roadsides and earn income. “For instance, the taxi people on the streets that make traffic flow difficult, the street sellers among others,” he said. Norteh said that the aim was to develop the state. The chairman said that the agency did not engage in multiple taxation. “There is a lot of noise about multiple taxation, we don’t engage in it; it has been a thing of the past since we came on board, and we insist that people will not be harassed provided they do the right thing,” he said Norteh further said that the agency would collaborate with relevant authorities in the state to effectively implement the policy. He told journalists that the tax would not be flat but would depend on the size of the space. He said hat the agency would meet with stakeholders including transporters and traders before collection of the tax. “The agency will be fair in the collection of the new taxation,” Norteh said.   Source: The Nation

If the country is to reduce unemployment and stimulate economic growth, the federal government has been advised to take bold steps which includes raising the Value Added Tax (VAT). Proshare, an online financial information service hub, stated this in a report titled: ‘Proshare Confidential,’ obtained yesterday.While the report stressed that in times of slow growth, economists would typically not prescribe raising taxes, it stated that since Nigeria currently has the lowest VAT in West Africa at five per cent, the government could be bold to increase the tax by at least 200 basis points, pushing the rate up by two per cent. It noted that if this is implemented, the government should therefore concentrate the additional revenue in infrastructural developments that helps to drop the cost of doing business and citizen transactions to create headroom for consumption which would spur business growth. This, over a period of 36 months, it stated, could reduce the cost of distribution of goods and services, thereby resulting in massive savings in logistics costs which could turn up as major improvements in corporate bottom lines and additional tax income; successfully closing the revenue-expenditure gap. “It’s all about productivity enhancement and not hand-outs to the most vulnerable in the society the way it is done. “You protect the most vulnerable by establishing public safety nets such as unemployment benefits, health services, state subsidised housing etc – all of which has to be paid for from the increase in productivity (translating to tax revenues), plugging of leakages through system/process improvements and adjusting the fiscal regime of taxes of tariffs to spur growth in the short term which will be clawed back to attain near equilibrium (illusory to get an optimum) as progress is attained,” the report stated. In its review of 2019, it described the year as a “watershed for several countries across Africa as they enter election cycles that could make or mar their future.” It pointed out that in Nigeria, the battle for the country’s political and economic soul has become vicious with every arm of government easy fodder for political henchmen determined to keep their paymasters, godfathers and muppets in the business of governance. Unfortunately, this it stated meant that Nigeria’s 2019 federal fiscal plan would be more of a concession to tradition rather than a programme of action to building a resilient economy that can sustain a population growth of 2.9 per cent per annum. It also faulted the federal government’s 2019 Appropriation Bill.   Source: Investors King

Dr Abiodun Adedipe, a member of the Nigerian Economic Summit Group, says that increasing tax rates is not the cure all for growing tax revenue in Nigeria. Adedipe, also a management and financial consultant, said this at a programme with the theme: “The Drivers, Enablers and Obstacles to Our Growth”, organized by Platform Nigeria in Lagos on Wednesday. “The situation is like flogging a dead horse. With the research we have made in taxation, we realized that when you raise tax rates, you will only have those in the tax net to bear that burden. “Rather, we should creatively and innovatively think of how to bring those outside the tax net into the system. “There is a principle in economics that says people respond to incentives. Our tax system does not provide for redress. If I have any complaint about my tax, there is no window to present such complaint. We have to look into this. “Also, people willingly pay tax in other parts of the world because the taxes are working in their life. Nigeria needs leaders who are trustworthy, who the citizens can trust with their money and funds,” he said. Adedipe also suggested how the power problem in the country could be resolved and how to ensure adequate privatization of institutions. “In Nigeria today, when we privatize, we only convert public monopolists to private monopolists and so, they deliver no value like we have in the power sector. “We need to begin to add a clause for adequate capital when we privatize. If our DISCOs do not have the capital to do what they are supposed to do, there is a simple way to get the power sector in Nigeria to work. “Mandate the DISCOs to meter all consumers in the country. Once they do that the revenue they generate from estimated billing will drop. When this happens, they will sit up and they will realize that providing power to the entire value chain is relevant and critical to their revenue base. “There are lots of entrepreneurs who want to make money and they will realize that to make money, power needs to be generated. “That will, however, make the DISCOs not think about only themselves, but how to distribute power adequately to make money from consumers and with this we can solve the power problem,” he said. Adedipe said that a change of the Nigerian story was in the hands of the elite in the country and not the government. According to him, the elites are the well exposed but they act on enlightened self-interest and they have access to power but they abuse power. “The elites take loans and mostly, do not want to repay. There is over N5 trillion on AMCON’s balance sheet, which if we can convert only N2 trillion and put it into funding this economy, we will go some distance. “They love bailout when their money pots are drying up but make dubious arguments on subsidies that impact the bottom of the pyramid. “They also earn the most but pay the least taxes and levies and they also know how things should work in the country but pursue enlightened self interest always. “We need to stop talking ill of Nigeria and walk the talk and act accordingly,” he said.   Source: PM News

The Nigerian economy appears to be facing a new threat as oil companies operating in the Niger Delta continue to face fresh opposition to crude oil export. This trend may impact projections negatively, CHIKA IZUORA,writes. The Nigerian Liquefied Natural Gas (NLNG), is facing the burden of proving it is transparent in dealing with issues of tax remittances, having paid about N14.6 trillion to government coffers in the last nine years. CHIKA IZUORA examines the feud between the company and the Maritime Administration and Safety Agency (NIMASA), over issues of tax evasion. The Nigerian Maritime Administration and Safety Agency (NIMASA) and Nigeria Liquefied Natural Gas (NLNG) Limited, have been at loggerheads as a result of perceived conflict in the enabling Acts of both organisations: the Nigeria LNG (Fiscal Incentives, Guarantees and Assurances) Act 1990 on one hand; and Nigerian Maritime Administration and Safety Agency Act 2007, Merchant Shipping Act and Coastal and Inland Shipping Act on the other hand. The NLNG is one of the prime beneficiaries of the pioneer status policy of the federal government on gas monetisation and flare reduction. The NLNG Act is based on initial terms of contract between government and private shareholders of the company. The NNPC holds overriding 49 per cent financial interest in the company, while Shell Gas BV owns 25.6 per cent operating interest. Also, Total has 15 per cent in the company, while Eni International N.V.S.a.r.l holds the remaining 10.4 per cent interest. The terms include incentives, concessions, guarantees and assurances in letters to lenders for the NLNG Trains 4 and 5 expansion by ministry of finance, ministry of justice and Office of the Attorney-General of the Federation, and the Central Bank of Nigeria (CBN). The main thrust of the guarantees and assurances are to assure protection of foreign investments by the non-breach of the NLNG Act which, in recognition of its sanctity, has been protected by all administrations of the federal government right from inception. The terms of the contract were modelled after similar packages of incentives flaunted by other competing countries such as Qatar, Oman, Malaysia, Angola, and others to attract investors in gas liquefaction and export. Expectedly, the legal frameworks, commercial incentives and sanctity of contracts built into the NLNG Act formed the springboard for the company’s rapid growth from a single train gas processing company to an efficiently run six train company with one of the healthiest balance sheets among biggest commercial enterprises in Africa. Section 2 of the NLNG Act provides the company tax waivers and other incentives for its investments in facilities to harness Nigeria’s gas resources for exports. But NIMASA contends that its establishment laws exempt only military vessels from its various revenue payments. Thus, whereas NIMASA insists that its levies were applicable to NLNG, the latter argues that fiscal incentives embedded in the NLNG Act exempt it from such levies and charges. A cross section of legal experts whose opinions were sought on the matter declared that whereas they did not have all the facts of the matter but stressed that when two laws that confer rights contend, the first in time takes precedence and consequently overrides the later.    Source; Leadership