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The German Environment Agency has advocated making cars with high carbon dioxide emissions more expensive given the boom in the purchase of sport utility vehicles in the country. “We must find measures to promote climate friendly transport, Federal Environment Agency president, Maria Krautzberger, told dpa on Tuesday. A proposal from the agency is an income neutral bonus penalty system for new vehicles. A penalty would be levied on cars with high CO2 emissions through a tax increase over several years. Also, bonus would be paid through targeted promotion of cars with low CO2 emissions. The agency made the comments after sales of SUVs increased sharply again in July.   Source: Punch

Oyo State government has promised that it will not increase tax on small and medium scale enterprises, SMEs, as a means of boosting its revenue base. Giving this assurance, the Chairman, Oyo State Board of Internal Revenue, BIR, Aremo John Adeleke, in a chat with newsmen at his office in Ibadan, stated that the State would re-visit the State’s tax net and capture areas not already captured in order to improve internally generated revenue. He added that Governor Seyi Makinde’s government would seek for ways to build and nurture the growth of SMEs in the State rather than to burden them with heavy tax that could drive them out of business. Adeleke stated, “It is in line with the promise of governor Seyi Makinde to empower small scale businesses in the State to propel growth in our economy. As he works assiduously to attract foreign and domestic investments to the State, he is also working to establish and sustain small and medium scale industries in Oyo State. So the idea of tax increament on businesses is not even to be discussed here. We will rather nurture them to grow and be self-sustaining than to over-burden them with tax”. “The government nonetheless expects all SMEs to comply with all extant tax laws, especially the ones on personal assessment of business proprietors, withholding tax and VAT payable to the State”, he added. Aremo Adeleke enjoined commercial vehicle owners and drivers as well as motorcycle riders and owners to collect necessary documents from approved agencies and tax stations under Oyo State internal Revenue Services instead of doing same in neighboring States. He said “We assure everyone of quick turnaround time of registering or renewing vehicle documents. We also promise all our patrons quick availability of number plates for all categories of vehicles.” Adeleke used the occasion to call on the staff of the board of internal revenue to be quick, responsive and work with utmost integrity and professionalism which he said was the best way to support the present administration in its drive for improved internally generated revenue.   Source: Punch

The federal government will soon come up with a resolution on issues bordering on the collection of stamp duties as well as the extension of Value Added Tax (VAT) exemption on capital market transactions, among others, the Vice-President, Prof. Yemi Osinbajo disclosed weekend. VAT charges on transactions in the capital market, which was suspended in 2014 by then Minister of Finance, Dr. Ngozi Okonjo-Iweala to encourage increased trading activities in the market, ended on July 24, 2019. Osinbajo, who was represented by the acting Director General of the Securities and Exchange Commission (SEC), Ms. Mary Uduk, at the awards night of the Association of Issuing Houses of Nigeria (AIHN) in Lagos, stated that VAT exemption, stamp duties and other issues were being addressed currently, adding that a resolution would be announced very soon. A press statement issued by the SEC Head, Public Communications, Efe Ebelo quoted Osinbajo as saying: “We have also commenced work on other aspects of CAMMIC’S requests that require government intervention and would be collaborating with many of you in the capital market community to successfully address them. “My Office is actually represented on the CAMMIC. I will therefore be receiving periodic reports on suggestions to further strengthen our support of your efforts and the market as a whole. “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 finance. “Let me therefore commend the Securities and Exchange Commission, CAMMIC and the capital market community for the laudable accomplishments so far recorded in the implementation of the master plan, especially in the areas of dematerialisation of share certificates, e-dividend mandate, facilitation of access to alternative investments as well as various initiatives to enhance the commodities eco-system.” The vice-president described the capital market as essential and key to achieving the economic goals of the present administration as enshrined in the Economic Recovery and Growth Plan (ERGP), noting that the administration has worked hard to ensure a stable macroeconomic environment, which is necessary to attract and sustain investment needed to propel the economy forward. He added: “We see the capital market as an important driver of our growth agenda and we will continue to collaborate with the capital market community to support its efforts to positioning our market to where it should be. This administration and especially my office has supported the ten-year Capital Market Master Plan implementation initiatives since inception in 2015.” He described AIHN as an important player in the Nigerian capital market and commended its members for directly contributing to the economy by aggregating the much-needed funding to support entities in the private and public sectors, adding that government and the private sector need to continue to work together to create sustainable businesses and provide the necessary jobs for the teeming youths. The ERGP of the Buhari administration, he noted, recognises critical sectors for financing to include agriculture, infrastructure, power and SMEs, but added that the government cannot do this alone. According to him, government must evolve from an omnibus provider of citizens’ needs into a force for eliminating the blockages that restrict innovation and market-based solutions. “In this regard, government has collaborated with the capital market community and particularly with members of your association in structuring novel arrangements to fund infrastructure development through instruments such as the FGN Sukuk Bond, FGN Green Bond, Infrastructure Funds as well as the planned trading of tax credit instruments. “Therefore, as you chart the course of the capital market for the next four years, I assure you of this administration’s support and I look forward to working with you and other stakeholders in the financial system to actualize a vibrant economy of our dreams,” he added. In his address, the President of AIHN, Mr. Chuka Eseka, expressed the need for the private sector and the capital market to play driving roles in achieving economic prosperity and development while partnering with the government at all levels. He emphasised the need for market operator role in the financial system value chain to be strengthened to enable the capital market deliver on its role as a catalyst of economic growth.   Source: This days

The Federal Inland Revenue Service (FIRS) may, from next year, ask banks to charge customers five per cent Value Added Tax for online purchases when using bank cards, its Chairman, Tunde Fowler, has said. Mr Fowler, who gave the hint in an interview with newsmen in his office in Abuja, also said the federal government was yet to take a decision on whether to increase VAT or not. Online purchases are increasingly becoming popular among Nigerians with online stores such as Jumia and Konga leading the pack. Many Nigerians also buy from popular Chinese online store, Aliexpress. Payments for such purchases are often made using bank debit and credit cards, and could soon attract the five per cent tax being considered by the FIRS. Although he acknowledged Nigeria was not fully ready for the growing global digitalised economy, the FIRS Chairman said, based on existing laws, the country will adopt a solution suitable to her peculiar circumstance. “We will address the issue of the digitalised economy very soon. There is no global solution to a digitalised economy. “Different countries have taken different solutions to address the problem. Nigeria has not taken a position yet. But, we are meeting to see if we can come up with a global solution that we can all adapt to. “With the existing laws in Nigeria, we can appoint the banks as agents. First of all, all those who make payments for purchases online using bank cards and instruct their bankers to pay, we will tell the banks that, going forward, everyone who gives instructions for service for purchase online, they should deduct five per cent VAT,” he said. “We are thinking that maybe early next year, we will advise banks to start deducting five percent VAT for all online purchases done locally,” he added. Also, the FIRS Chairman spoke on the lingering debate on an increase in the VAT rate from the current five per cent to either 7.5 per cent or 10 per cent. According to Mr Fowler, given a choice between increasing VAT rate and expanding the tax base, he will prefer the latter. “Of course, the first one will be the expansion of the tax base. The tax has to be fair. That’s where we started off. That’s why we have said we have redesigned and issued new tax certificates for VAT. “We have given to all registered taxpayers. We believe we should have effectively at least 1.5 million corporate taxpayers,” he said. He said the FIRS will prefer to address the issue of VAT rate ”after it has achieved its target of bringing all eligible taxpayers under the tax net”. Describing the VAT rate in Nigeria as the lowest in the world, apart from the United Arab Emirates (UAE) that has just introduced five per cent rate, he said VAT is a consumption tax, only payable by choice. “What that means is, if A wants to impress B, and takes B to eat at the Transcorp Hilton, A will pay VAT for services enjoyed. This is because of the environment. “The cost of the Coca Cola they will drink at Transcorp Hilton at N1,000 could have been bought at N100 in any supermarket without paying any VAT. “Also, A can buy chicken, with all the ingredients in the market, cook it and eat without any VAT. But, instead of spending N5,000 for that meal, if A decides to go to the Transcorp Hilton and spend N20,000, then A must pay VAT. It is a choice A has to make,” he added. He said the only exemption for VAT are items required by everybody, like education, medical services, which, regardless of choice, one is expected to have. Despite pressures from the International Monetary Fund (IMF) on the need to increase VAT rate in Nigeria, the FIRS chief said the Federal Government is yet to make any official pronouncement on the issue. “The IMF said Nigeria’s VAT rate is one of the lowest in the world. We had discussions back and forth on the benefits of the increase. My position is to first expand the tax net. “We crossed the N1 trillion mark in VAT last year for the first time. We are equally improving this year. At the end of 2019, if we can have everybody come under the tax net, sign for VAT, start remitting VAT, let’s look at the volume we can generate. “Then we can discuss the way we are, for government to take a decision as to whether VAT should be increased or not,” he said.   Source: Today