2 BUSINESS A.M. FEBRUARY, MONDAY 12 - SUNDAY 18, 2018 NEWS Executive... Page 1 He said policies would be driven majorly by three considerations including politically expedient, economic necessity or imperative, and materially convenience in response to electoral pressure caused by Obasanjo’s letter which will force greater efficiency and speedy response by incumbent, embolden opposition forces to coagulate, leading to greater transparency in public sector “Aggressive tax collection/excise duties is not politically expedient for the government but it is of economic necessity and materially convenient. Minimum wage review is politically expedient, economic necessity but not materially convenient”, he asserted. He forecast that money supply growth would increase in Q1 while Primary Treasury bills issue would be much lower than maturing bills as the average stop rates of Treasury bills in February/March will decline to 11- 12 per cent per annum with interbank interest rates falling in tandem. “Interest rate to decline despite no Monetary Policy Committee (MPC) meeting as the correlation between M2 growth and Consumer Price Index (CPI) had broken down in 2017. “The more positive correlation is CPI and the credit to the private sector as once credit availability is abundant at good rates -average rate 21 – 25 p.a., productivity and output will increase and bring the price level down. The fear that excess liquidity will lead to transmission effects on prices and markets is overblown, with growth increasing simultaneously oil price, production revenue,” he noted. On global developments, he said the drop of the pound to 1.18 against the dollar in 2016 reduced Nigerian Diaspora remittances by over $3bn as 30 percent of Nigerians in the Diaspora are in the United Kingdom. The proposed changes to the tax laws would achieve the following: increase and diversify government revenue, simplify paying taxes and doing business, promote MSMEs, protect vulnerable persons, and remove obsolete, ambiguous and contradictory provisions in the law. Companies to gain additional reliefs as new tax laws underway STEVE OMANUFEME NIGERIAN CORPO- RATES AND ELIGIBLE NEWS taxpayers are expected to gain some reliefs when the ongoing tax law reforms are approved and implemented, according to details of the recommendations of the National Tax Policy Implementation Committee (NTPIC) seen by business.a.m. The NTPIC had on Friday, February 2, 2018, presented its progress report on the review of tax laws and regulations, and proposed tax reforms to Kemi Adeosun, the minister of finance. The recommendations are put together in two Executive Orders and five Amendment Bills as follows: Executive Orders Value Added Tax Act (Modification) Order; Review of Goods Liable to Excise Duties and Applicable Rates Order; 2017 Amendment Bills Companies Income Tax Act (Amendment) Bill; Value Added Tax Act (Amendment Bill); Customs, Excise, Tariff etc. (Consolidation) Act (Amendment) Bill; Personal Income Tax Act (Amendment) Bill; and Industrial Development (Income Tax Relief) Act (Amendment) Bill. The proposed changes to the tax laws, according to Taiwo Oyedele, the vicechairman of the committee, would achieve the following: increase and diversify government revenue, simplify paying taxes and doing business, promote MSMEs, protect vulnerable persons, and remove obsolete, ambiguous and contradictory provisions in the law. Some of the major areas of the recommendations by the NTPIC include reviews of the Company Income Tax Act, Value Added Tax Act, Customs Excise and Tariff Act (CETA), Personal Income Tax Act (PITA)/ Pension Contribution, and Industrial Development (Income Tax Relief) Act (IDI- TRA) and Tertiary Education Trust Fund (Establishment, Etc.) Act. The mandate of the committee was to carry out reviews of tax laws and regulations in accordance with the rec- L-R:Adeniyi Oshinowo, Admiral and commandant, National Defence College; Peter Danke, deputy commandant and Kemi Adeosun, minister of finance and representative of Vice President of Nigeria, Yemi Osinbajo, at a lecture delivered on behalf of Osinbajo by Adeosun, to the Course 26 participants of National Defence College in Abuja N20bn daily revenue under threat as maritime workers plan to force govt.’s hand on port access roads Ajose Sehindemi REVENUE ESTIMAT- ED at about N20 billion NEWS that the Nigerian government earns daily from activities at the Apapa ports are under threat from a proposed strike action being planned by workers unions in the maritime industry, who are trying to force the hand of the government over the state of access roads leading to the ports in Apapa, Lagos. The workers want the government to fix the roads into Apapa, host to Nigeria’s two most utilized ports, the Tin Can and Apapa ports. The town accounts for 80 percent of Nigeria’s export and import activities, earning for the government about N20 billion daily, according to Paul Gbededo, ommendations of the NTP, while taking into consideration the Economic Recovery and Growth Plan (ERGP) and the Ease of Doing Business Plan. One major boon of the recommendations is deletion of Section 16(7) of CITA, which restricts carry forward of losses by insurance companies to four years and replacing it with a new subsection that allows indefinite carry forward of losses. There is also an amendment of Section 19 of CITA to avoid double taxation of retained earnings on which tax has been paid and exclude exempt profits from excess dividend tax. Others are deletion of commencement rule provisions to reduce the impact of double taxation on new companies, amendment of Section 31(2)(a)(ii) to allow for indefinite carry forward of losses made by companies during their commencement period, deletion of Section 39(1)(e) to remove bureaucracy regarding ministerial approval for loan obtained for group managing director of Flours Mills Nigeria plc, one of the country’s food companies. Jonathan Nicol, who is president of the Shippers’ Association, Lagos State (SALS), had earlier said the country was already losing N1 trillion annually as a result of cargo diversion to ports in neighbouring countries due to bad roads to Lagos ports. He said the losses arose from import duties and other charges not paid to Nigerian ports. Aliko Dangote, Africa’s richest man and president, Dangote group, had also disclosed that N140 billion was being lost weekly to traffic gridlocks on the roads leading into the two ports because of the perilous and dilapidated state. Haruna Omolajomo, executive secretary, Association of Bonded Terminal Operators in Nigeria, said his association is seeking a common front gas projects and to improve ease of doing business, and deletion of other overlapping and obsolete provisions On value added tax, the committee recommended that Section 2 and 46 of VATA be amended to include “intangible property” as a chargeable item and define ‘taxable supplies”, respectively. The inclusions cover guidelines on turnover thresholds for VAT registration and giving the ministry of finance the power to amend the threshold, and inclusion of a section imposing obligation to self-account for VAT on recipients of taxable supplies by nonresident companies (NRCs), regardless of whether the NRC charged VAT on its invoice or not. Overlapping and obsolete provisions in the VATA were equally recommended for deletion as well as modification of Part 1 and 2 of the First schedule to VATA, through an Executive Order, to include residential property leases or rentals, shared of all maritime groups to confront the challenge posed by the continued neglect of the port access roads by the federal government. Omolajomo said the association has started to rally other interest groups with the objective of jointly declaring a state of emergency on the port access roads. He said groups like the Association of Nigerian Licensed Customs Agents (ANLCA), National Association of Government Approved Freight Forwarders (NAGAFF) as well as truck owner groups like NARTO, AMATO and JCOST should align with the Maritime Workers Union of Nigeria (MWUN) in declaring a state of emergency on the port access roads. He said the government has failed in its responsibility to provide the necessary infrastructure for port businesses to thrive. passenger –transport services, life insurance as VAT exempt goods/services and deletion of obsolete provisions Regarding Customs Excise and Tariff Act (CETA), NTPIC recommended the introduction of a specific rate system in addition to the existing ad valorem rate system for tobacco and alcoholic products and the inclusion of eight additional items to the list of goods manufactured in Nigeria that are subject to excise duties in line with ECOWAS directive. For individual tax payers, the Personal Income Tax Act (PITA)/ Pension Contribution, the mode of delivery of notice of objection is modified to include delivery in person, by courier or via electronic mail, to accommodate developments in ICT. Other modifications include the admissibility of the different names adopted by State Revenue Authorities admissible by the law and deletion of overlapping and obsolete provisions. Omolajomo said the level of federal government’s neglect of the roads has got to the point where all hands must be on deck to forcefully draw government’s attention to the lives that are being lost daily and businesses ruined by the failed roads. He said: “Government should understand that the sector is a key factor to economic growth and must be given the urgent attention needed to encourage and complement the entrepreneurial spirit of the private sector. “Only a fraction of the revenue generated daily from the ports is needed to rehabilitate and reconstruct the ports access roads,” he said. He wondered why government has failed to realise the enormous harm being done to the economy by neglecting the roads. “I am in total support of what the Maritime Workers Union of Nigeria plan to do to ensure that the roads are fixed for once,” Omolajomo said.
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