BusinessDay 28 Feb 2018

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18 BUSINESS DAY C002D5556 Wednesday 28 February 2018 Tax Issues Prospects for tax collection brighten as FIRS initiatives yield fruits STEPHEN ONYEKWELU The Federal Inland Revenue Services (FIRS) tax initiatives aimed at broadening Nigeria’s tax base and increasing collection are yielding some results. The core functions of FIRS is to assess, collect, account and enforce payment of taxes as may be due to the government or any of its agencies. Tax collection has become critical because Nigeria faces a huge infrastructure deficit as documented in the recently launched Nigeria Economic Recovery and Growth Plan (ERGP). According to the ERGP (2017 – 2020), Nigeria needs to invest $3 trillion in infrastructure over the next 30 years. An efficient tax system is pivotal in making this happen. Some of the tax initiatives designed to improve efficiency in the tax system include: innovation, convenience and transparency (ICT); amnesty: waiver of penalty and interest; intensive registration of taxpayers and extensive nationwide tax audit exercise. Others include: review and revision of national tax policy, tax laws and regulations; bringing tax offices closer to taxpayers; Voluntary Assets and Income Declaration Scheme (VAIDS); tax awareness initiative: Thursday declared as a Tax Thursday and multilateral/bilateral taxation agreements. Tunde Fowler, Executive Chairman, Federal Inland Revenue Services’ (FIRS), said at the 2018 edition of Nigeria Economic Outlook, organised by Deloitte that FIRS’ adoption of e-Services as a medium to achieve Innovation, Convenience and Transparency of its operations has ensured that every effort is made to improve its efficiency in collections and tax administrations. The adoption of these e-Services has not only reduced the taxpayers’ burden but also improved FIRS efficiency in collections and tax administrations. The e-Services include: e-Registration, online registration of taxpayers in order to do business with FIRS. Others are: e-Stamp Duty, Automation of stamp duty levied transactions from the comfort of your home or office; e-Tax Payment, electronic payment of taxes through any of FIRS preferred payment channels. Nigerian Inter-Bank Settlement Services (NIB- SS), Remita, Quickteller (Interswitch), Etranzact Payment Gateway; e-Receipt, an electronic notification will be automatically sent to the taxpayer’s email and/or phone within 24 hours after payment and its verification; e-Filing, automation of FIRS core tax processes. The tax amnesty programme has yielded some fruits as well. As part of efforts by the Service to promote voluntary compliance and shield taxpayers from the burden of carrying forward tax liabilities arising from penalty and interest, the Service granted a waiver of penalty and interest for three years (2013-2015). All defaulting taxpayers are considered, provided that such taxpayers come forward to declare their indebtedness, pay at least 25 perecent of the outstanding amount and present a payment plan on the outstanding tax liability that is acceptable to the Service. This window was opened from 5th October to 24th November, 2016. A total of 2,400 companies took advantage of the window, from which FIRS realised about N27.086 billion, down payment. The intensive registration of taxpayers has recorded some success. FIRS in collaboration with other relevant government agencies (such as Corporate Affairs Commission, Central Bank of Nigeria, Nigeria Customs Services) undertook a massive nationwide registration exercise of new taxpayers in 2016. The impact is that over 814,000 new corporate taxpayers registered by end of 2016. Over N120 billion accrued from the exercise, according to Fowler. Extensive nationwide tax audit exercise has advanced both the broadening of tax base and increase in revenue collection. FIRS has conducted audit in collaboration with experienced tax audit firms on a sectorby-sector basis. The tax audit firms facilitated and gathered data from taxpayers’ records while FIRS carried out relevant reviews, assessment and collection of the revenue due from the tax liabilities that arose. This led to increased compliance across all tax types and all taxpayer categories. Over 15,000 noncompliance stickers were pasted on identifiable business premises and recalcitrant taxpayers were enforced upon and over N35.65 billion recovered. Voluntary Assets and Income Declaration Scheme (VAIDS), VAIDS is an initiative designed to encourage voluntary disclosure of previously undisclosed assets and income for the purpose of payment of all outstanding tax liabilities. It is being implemented by the Federal Inland Revenue Service in collaboration with the 36 States and FCT Internal Revenue Service. It offers a grace period from July 1, 2017 to March 31, 2018, for defaulting taxpayers to voluntarily declare their true tax status and pay to government what they owe over an agreed period of time. The scheme is expected to help expand Nigeria’s tax base and improve the low tax to Gross Domestic Product (GDP) ratio from the current 6% to between 12 percent to 15 percent in the first instance, and so far N17 billion has been result of this initiative from federal taxes. United Capital series VAIDS: Regularising your tax status Regularising one’s tax status under the Voluntary Asset and Income Declaration Scheme (VAIDS) can only be done by remitting all applicable taxes to the relevant tax authorities including the FIRS and SBIRS, depending on the type of tax in issue. Payments are to be made by quoting the entities full name and a reference Tax Identification Number (TIN) through a Bank. The Bank is expected to issue a payment receipt when payment is made. For persons or entities who have never paid tax, application for a TIN would be the first step before payment can be made. However, the Scheme recognizes that many tax defaulters who are willing to comply may be cashstrapped. Thus, VAIDS avails defaulter the opportunity to enter into arrangements to pay outstanding tax liabilities in installments. At the discretion of the relevant tax authority, defaulters may be granted up to 3years to pay up their tax liability, but with the obligation to pay the interest accrued on the outstanding balance. Where a defaulter is unable to determine his/her tax liability, the scheme also made provision for agents of the relevant tax authorities to help calculate such tax liability. But this can only be done after a defaulter has registered for VAIDS by filing the declaration form. …Identifying willful tax evaders On expiration of the March 31, 2018 deadline, all taxpayers who fail to take advantage of the Voluntary Assets and Income Declaration Scheme(VAIDS) and are later found to have under-declared their income or assets will be treated as willful tax evaders and will, therefore, face the wrath of the law. Accordingly, the Federal Inland Revenue Service (FIRS) has been reported to have engaged on retainership, the service of some of the world’s leading asset tracking and recovery firms to assist in tracking the true assets of those who have not participated but are believed to have underpaid their taxes. The FIRS also plan to “Name and Shame” defaulters to reveal the identities of tax evaders to the public. This is to be supported by criminal prosecution, and recovery of taxes due with full penalties and interest. Furthermore, the Relevant Tax Authorities (RTAs) are in the process of profiling certain categories of non-compliant taxpayers for ongoing audits and investigations, in line with the tax compliance reforms. A small team within the Ministry of Finance has, therefore, been quietly gathering information to assess degree of tax compliance over the past 15 months. We advise clients to regularize their tax status to avoid any the reputational risks that may arise thereafter. IMF, World Bank, others want countries to strengthen tax systems IHEANYI NWACHUKWU Domestic resource mobilisation presents a particular challenge for developing countries, which struggle to raise sufficient revenue to provide basic services, such as road infrastructure, healthcare, and public safety. Research indicates that at least 15 percent of GDP in revenue is necessary to finance these basic services, but in almost 30 of the 75 poorest countries, tax revenues are below this 15 percent threshold. Amid these findings, major international organisations have called on governments from around the world to strengthen and increase the effectiveness of their tax systems to generate the domestic resources needed to meet the Sustainable Development Goals (SDGs) and promote inclusive economic growth. The international organisations are International Monetary Fund (IMF), Organisation for Economic Cooperation and Development (OECD), United Nations (UN) and World Bank Group. They noted that all countries need to pay greater attention to the spillovers from their tax policies and step up their support for stronger tax systems. They made the call at a conference organized at UN headquarters by the Platform for Collaboration on Tax (PCT) which provided a unique opportunity to discuss the role of tax in ending poverty, protecting the planet and ensuring prosperity for all. Governments and relevant stakeholders also need to continue to work together on establishing a fair and efficient system of international taxation, including efforts to fight tax evasion and tax avoidance. During a three-day conference at UN headquarters on “Taxation and the SDGs”, ministers and deputy ministers of finance, tax authorities, and senior representatives from civil society, private sector, academia, regional and global organisations debated the key directions needed for tax policy and administration to meet the SDGs by 2030. This rose includes: how to mobilise domestic resources for development; tax policies to support sustainable economic growth, investment and trade; the social dimensions of taxation (income and gender inequality, human development); as well as capacity development and international tax co-operation. As an era of unprecedented international co-operation on tax is underway with the advent of initiatives like the Automatic Exchange of Information, the Base Erosion and Profit Shifting (BEPS) project, and the active engagement of the UN Tax Committee—all these initiatives create new opportunities for the enhanced participation of developing countries in international tax policy discussions and institutions, but also new challenges to fully realising the benefits of international co-operation on tax. The conference aimed to provide guidance to countries and other stakeholders on how to better target tax efforts to achieve broader development goals. Insights from the conference helps inform and shape the future work of the PCT members and partners, including the IMF, OECD, UN and World Bank.
Wednesday 28 February 2018 BUSINESS DAY 19 SHIPPING LOGISTICS MARITIME e-COMMERCE Terminal operators seek total repair of port roads to save businesses ...SIFAX says total reconstruction not palliative needed Stories by UZOAMAKA ANAGOR-EWUZIE Worried by the negative impact of the poor state of the roads leading to the Apapa and Tin-Can Island seaports, terminal operators and owners of container off-dock terminals, have again called on the Federal Government to intervene in repairing the roads to ease the suffering of port businesses within Apapa metropolis. According to them, the situation of the roads especially the Tin-Can and Coconut axis of the Apapa-Oshodi Expressway, has gone beyond the state of carrying out palliative, as the road now require total reconstruction to ease movement of cargo out from the ports. Oliver Omajuwa, general manager, SIFAX Off-Dock Limited, urged the Federal Government to urgently fix the road, saying that rehabilitation of the road has been necessary in order to save Cross section of 2018 INTELS WEPSS intakes. businesses from shutting down due to the deplorable state of the Tin Can–Coconut port access road. Omajuwa, who made the appeal in a statement issued at the weekend on the back of the on-going palliative measures currently embarked upon by different stakeholders, said that the situation of the road has gone beyond palliatives. He noted that with the early rains coming in February, gives clear indication that 2018 might likely be a year of INTELS to train 125 women in 2018 WEPSS empowerment programme As part of its corporate social responsibility (CSR), INTELS Nigeria Limited has admitted 125 persons to take part in this year’s Women Empowerment Programme Synergy Scheme (WEPSS). WEPSS was established in 2013 with the vision of empowering 5,000 community women over a 20-year period through training in fashion design and tailoring. To date, more than 500 several women have been empowered through the project. Silvano Bellinato, director of INTELS Nigeria Limited, said recently that the company ENL Consortium Nigeria Limited, the operator of Terminals C and D of the Lagos Port Complex Apapa, has emerged the Most Outstanding Maritime Operator of the Year 2017, at the Independent Awards organised by Independent Newspapers at the weekend. The award was in addition to similar honour bestowed on the company when it won the Port and Container Terminal Development Award at the prestigious Seatrade International Award held in Dubai, United Arab Emirates. Vicky Haastrup, executive vice chairman/CEO of ENL Consortium, who dedicated the award to “all the hardworking management and staff” of the company, said that all hands must be on deck to promote the development of the maritime sector. Haastrup, who doubles as the chairman of Seaport Terminal Operators Association of Nigeria (STOAN), said ENL Consortium has made substantial investment in human and materemains resolute in enhancing the lives of people in its area of operation and commitment to the development of communities in the area. He said that INTELS has acquired and made available over 300 specialised sewing machines and built a 5000-square metres garment manufacturing factory at the Federal Lighter Terminal, Onne for the purpose of the training. At the commencement of this year’s training session in Onne last week, Abhina Ajmani, head of WEPSS, said that the training is held once every six months and this year marks the fifth session. According to him, about 700 women applied for admission into the 2018 programme, who were mostly WASSCE holders but only 125 were admitted. “This training is free and lasts for four months per set. Everything has been done to ensure the beneficiaries give their full commitment to acquiring skills that will empower them for life,” he said. Dorothy Egbe, a 2016 beneficiary and graduate of WEPSS, said the programme was transforming the lives of women in Rivers State. “WEPSS has been of great help to me. I learnt new skills and acquire an industrial sewing machine at no cost. I now sew clothes for myself, my family and friends. “I am still in my final year in school. After I am done with my studies, I plan to start sewing full time, on a commercial scale. I am equally improving on what I was taught, learning how to make designs. I intend to direct my focus on sewing women and children’s clothes,” she added. heavy rains, with devastating effects on businesses operating in the axis as well as other road users. “With the deplorable state of the Tin-Can and Coconut axis of the Apapa-Oshodi Expressway, there has been tremendous delay in container transfers from various ports. This has resulted in loss of revenue as the off-dock operators cannot charge client until containers are successfully received at their terminals,” he said. According to him, for every day containers were delayed due to the bad access road, bonded terminals operating around lose revenue in storage, idle man-hour, electricity wastage because the terminals must be powered whether the containers come in or not and pay overtime and inconvenience allowances to staff as well as other cost. Omajuwa said that the road situation poses very difficult time for businesses located around the Coconut axis as their bottom line was eroded with various interventions on the road. He explained that once every two weeks, companies like SIFAX provides its own palliative on the road by filling some bad portions at Coconut and Sunrise axis with about 50 truck-loads of hardcore stones. “Sometimes when container-laden trucks were stuck in the craters on the road, the company moves out its equipment such as reach stackers and others to salvage the situation. The palliative measures embarked upon by stakeholders, whose businesses are located around the axis is not moving as expected,” he added. Omajuwa said that the road, which is in terrible state, has become a threat to the existence of businesses around Coconut area. “Though the government has handed over the reconstruction of the road to Dangote Construction Company starting from Oworonshoki, we urge, as a matter of urgency, that the reconstruction of the stretch of road should start at the coconut axis. Vicky Haastrup “This has become necessary because when the rainy season comes, businesses will be forced to shut down and this would amount to revenue loss for the government and private companies while workers would also not be spared as job loss usually comes with failed businesses,” he said. Speaking at a different occasion at the weekend, Vicky Haastrup, executive vice chairman/CEO of ENL Consortium, said that despite the successes recorded by the Federal Government’s port concessioning programme, that the dilapidated state of the port access roads has remained challenging to port business. The major challenge facing terminal operators today is the dysfunctional state of the Wharf Road and the Apapa-Oshodi Expressway. These roads are the major arteries of both the Apapa and Tin-Can Island ports. If these roads are given due attention by government, Nigerians will enjoy more benefits of port concession,” she added. ENL Consortium emerges Maritime Operator of the Year rial resources to enable the country realise the benefits of port concession. “We have quality staff working with us and I am happy to dedicate this award to the hardworking, committed and patriotic staff of ENL Consortium, who works day and night to ensure that ships were promptly discharged and cargoes were delivered in good time to their owners. “When we came into the port in 2006, the terminals were at ground zero. Nothing was working. The equipment were not functional, there were endless ship queues even as touts called the shot. The morale of workers was at its lowest ebb,” Haastrup said. Haastrup also said that terminal operators have turned the story around with good conditions of service for dockworkers and modern cargo handling equipment to ensure that ships are discharged in good time. According to her, terminal operators embarked on massive civil engineering works to develop the terminals and raised operational standard to what is obtainable in the ports of advanced countries. “To put an end to touting, I personally led the battle against the category of people called ‘wharf rats’ who were a menace to the system. Today, the terminal is professionally run. Things are working well inside the port and our country is the better for it,” she added. Ade Ogidan, managing director of Independent Newspapers, said the awards was organised to recognise and honour individuals and corporate organisations that have made significant contributions to nation development.
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BusinessDay 28 Feb 2018

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