8 months ago

BusinessDay 12 Apr 2018


38 BUSINESS DAY C002D5556 Thursday 12 April 2018 NEWS Nigeria’s fiscal space gets boost as oil hits 4 year... Continued from page 1 FG extends VAIDS to June... Continued from page 1 taxpayers.” The President however warned that no further extension of time will be approved after June 30. The President added that a new date was also given, based on the conviction of the Ministry of Finance that the overall objective to increase compliance will be attained, and additional revenue will accrue. The statement also said that a fresh Executive Order will be made to give legal backing to the new timeline. According to Buhari, “for a nation of people who are competitive driven it is not a thing of pride that we are the lowest performer in tax to GDP, not just in Africa, but in the world.” “Hiding monies overseas, evading taxes by manipulation, and other unwholesome practices, have never developed a country, and for Nigeria to attain her true potential, these must stop.” Nigeria’s tax-to-Gross Domestic Product (GDP) ratio at just 6percent is one of the lowest in the world compared to India (16 supply from the Middle East in the near future, which is affecting the price of crude oil,” Afimia said by mail. The global oil marker rose as much as 3.9 per cent to $71.34 a barrel, blowing past its recent January peaks to reach a level last seen in December 2014. The change marks the biggest one day gain for the gauge since September. “The higher crude oil prices we are currently witnessing simply means more income for both OPEC and non OPEC producing countries which they should take advantage of,” Abayomi Fawehinmi, an energy analyst at a Lagosbased consulting firm said. The West Texas Intermediate benchmark advanced as much as 3.8 per cent to $65.84 a barrel, closing in on its recent January high of $66.66 a barrel. “Also, the Middle East has the highest concentration of the major oil producing countries, so any issues or tensions there will affect oil supply,” Fawehinmi said. Prices have firmed on escalating tensions in the Middle East as US President Donald Trump and its allies are considering military response against Syrian President Bashar Assad’s forces over alleged chemical weapons attack in western Syria. Also, France, Britain and Middle Eastern allies, including Saudi Arabia, have publicly acknowledged internal deliberations on how to address the suspected poison gas on Saturday in the rebel-held western Syrian city of Douma, which the Syrian American Medical Society has said killed over 48 people. Syria is not a major oil producer itself, however the wider Middle East region is the world’s most important crude exporter and tension in the region tends to put oil markets on edge. “Russia vows to shoot down any and all missiles fired at Syria. Get ready Russia, because they will be coming nice and new and “smart”. You shouldn’t be partners with a Gas killing Animal who kills his people and enjoy it,” Trump tweeted on Wednesday by 11.57 am. Russia and Syria swiftly reacted to Trump’s threat on Wednesday. Syria’s Foreign Ministry said it was not startled by the US’ “reckless escalation” via Trump’s tweets, the state-run news agency SANA reported, while Russian Foreign Ministry spokeswoman Maria Zakharova said in a Facebook post that “smart missiles should fly toward terrorists, not the legal government that has been fighting international terrorism for several years on its territory.” There are also concerns that the US could renew sanctions against Iran, a major Middle East oil producer with daily oil production of about 3.8 million barrels. Saudi Arabia’s foreign minister Adel al-Jubeir said on Tuesday it was uncertain whether talks concerning Europeans and the United States would be sufficient to fix the Iran nuclear deal’s flaws, and that Tehran’s “vision of darkness” had to be stopped. U.S. President Donald Trump gave an ultimatum to the European powers on January. 12, saying they must agree to “fix the terrible flaws” of the 2015 agreement or he would refuse to L-R: Segun Oloketuyi, MD/CEO, Wema Bank plc; Yinka Davies, legendary entertainment personality; Joseph Edgar, producer of widely acclaimed stage play Isale Eko; Ademola Adebise, deputy managing director, Wema Bank plc, and Moruf Oseni, executive director, retail bank, Wema Bank plc, at the Wema Bank head office in Marina, when the production crew of Isale Eko paid the bank’s management a courtesy visit. percent), Ghana (15.9 percent), and South Africa (27 percent). Most developed nations have tax-to- GDP ratios of between 32 percent and 35 percent. The International Monetary Fund (IMF) in a recent country report on Nigeria blamed the nation’s revenue administrators for the low tax collection in Africa’s largest economy. “The very low tax collection rates in Nigeria are a direct reflection of weaknesses in revenue administration systems and a high level of systemic noncompliance,” the IMF noted. “Estimates of tax potential from the literature suggest that a nonoil tax capacity of 16 to 18 percent would be optimal for a country with Nigeria’s economic structure and per capita income levels. This estimate implies space for additional tax collection of 12 percent of GDP.” The Voluntary Asset and Income Declaration Scheme (VAIDS) is a time-limited opportunity for taxpayers to regularise their tax status relating to previous tax periods and pay any taxes due. The Federal Government aims extend the U.S. sanctions relief on Iran. Speaking to reporters after talks in Paris, Foreign Minister Adel al-Jubeir said he believed France, Britain and Germany agreed that Iran’s ballistic missile program and regional activities had to be addressed, but they disagreed with the United States, Saudi Arabia and Israel on the need to revamp the accord. “The present US government is currently showing the world that it’s not a country that honours agreement, so it won’t be a surprise if they don’t honour the agreement which will likely increase the price of oil,” Luqman Agboola, head of research at Sofidam Capital said. Saudi Arabia Energy Minister Khalid al-Falih said on Wednesday that Saudi Arabia will not allow another supply glut, meaning that the de-facto leader of Organization of the Petroleum Exporting Countries (OPEC) would continue to suppress supply. Also, US crude inventories rose by 1.8 million barrels in the week to April 6 to 429.1 million, according to a report by the American Petroleum Institute (API) on Tuesday, compared with analysts’ expectations for a decrease of 189,000 barrels. to raise at least $1 billion into its coffers as tax revenue while bringing in 4 million new tax payers into the tax net. Aso Rock had engaged a leading international Asset Tracing and Investigation Agency (Kroll), to trace and track illicit flows and assets. The data mining efforts of the Federal Ministry of Finance domiciled in ‘Project Lighthouse’ is also meant to help identify a new batch of more than 130,000 high net worth Nigerian individuals and companies that have potential tax underpayments. “We have properties worth N2 trillion belonging to Corporate entities that do not pay tax and we have begun the process of selling them off. At the federal level, about N20 billion has been raised and we have received over 262 applications through VAIDS,” said Tunde Fowler, Executive Chairman, Federal Inland Revenue Service (FIRS). “We are compiling all the information and data so we can have a central data base to ensure adequate security for people’s information,” Fowler said. Tax authorities have collected data from a number of sources including land registries of the Governments of Lagos, Kaduna, Kano and Adding to rising storage levels, the US Energy Information Administration said on Tuesday that it expects domestic crude oil production in 2019 to rise by more than previously expected, driven largely by growing US shale output. In its monthly short-term energy outlook, the agency forecast that US crude oil output will rise by 750,000 barrels per day (bpd) to 11.44 million bpd next year. Last month, it expected a 570,000-bpd year-over-year increase to 11.27 million bpd. That will likely make the US the world’s biggest oil producer by 2019, surpassing Russia which currently pumps out almost 11 million bpd. Rising oil prices would be welcome by the cash strapped Muhammadu Buhari-led government which campaigned in 2015 on the bases of stopping all forms of subsidy payments on petroleum products but has however been secretly doling out billions of naira annually as subsidy under the disguise of “underecovery” on petrol alone to oil contractors and their cronies in the NNPC. •Continues online at Ogun States as well as the Federal Capital Territory (FCT) and also have been able to request and receive data from a number of nations including traditional tax havens. For the overseas data the Federal Government has used exchange of information protocols. Under these protocols, information relating to bank records and financial filings for tax purposes is obtained from tax havens like British Virgin Islands and Mauritius that are signatories to information sharing agreements. The FIRS has also been unearthing tax payer’s data using Bank Verification Number (BVN), foreign exchange (FX) application, land registry, company dividends, car registration, Corporate Affairs Commission, and foreign property ownership. “The focus right now is on those that make substantive amount in Nigeria that have not declared or are underpaying their taxes,” according to the FIRS chairman. Nigeria has signed the Multilateral Competent Authority on Common Reporting Standards, which allows for exchange of financial account information. “We need to stop relying on oil and rebuild our revenue base. In order to achieve this we have to fulfill our tax obligations. This is Buhari meets... Continued from page 4 Gadaffi of Libya. When he was killed, the gunmen escaped with their arms. We encountered some of them fighting with Boko Haram. Herdsmen that we used to know carried only sticks and maybe a cutlass to clear the way, but these ones now carry sophisticated weapons. The problem is not religious, but sociological and economic. But we are working on solutions.” President Buhari lamented that “irresponsible politics” has been brought into the farmers/herders’ crisis, but assured that enduring solutions would be found, and justice done to all concerned. On Leah Sharibu, the schoolgirl from Dapchi still being held by insurgents, reportedly because she refused to renounce her Christian faith, the President said: “We are managing the matter quietly. Making noise would not help. We are collecting as much intelligence as possible, working with the Red Cross and other international organizations. There are too many fraudulent people around, who claim they can do this and that. We won’t deal with them. That was how we got the Dapchi girls back, and the Chibok girls.” Archbishop Welby said it was always a delight to see President Buhari, “whom I have tremendous respect for,” adding: “You have my best wishes on your recent decision. I read your declaration speech. We are neutral as a church, but we will pray for you. Great statesmen are those who run for the good of their country. We will be praying for you.” Japaul losses hit... Continued from page 4 interest expense spiked by 118.01 percent to N4.61 billion in December 2017 from N2.11 billion as at December 2016. The company’s share price gained 7.55 percent to close at 57 kobo per share while market capitalization stood at N3.57 billion. Japaul Oil & Maritime Services Plc provides marine offshore construction, marine equipment leasing, and oilfield marine support services. something we must all get right,” said Kemi Adeosun, Nigeria’s Minister of Finance. The President urged Nigerian companies and individuals to join government in the rebuilding mission, “and do the right thing by taking this window of extension to regularize.” He added that the right thing may not be convenient or comfortable, “but in the long run, we will all have a nation we can be proud of.” President Buhari further urged tax authorities to use the extension window to perfect plans to prosecute those who fail to regularize their tax status. President Buhari had last year launched the Economic Recovery and Growth Plan (ERGP), and the VAIDS tax amnesty a first in the series of reforms that will transform the tax system and provide sustainable predictable funding for all tiers of government. The IMF however says the current strategy of relying on strengthened collection efforts and one-off initiatives such as the Nigerian Voluntary Asset and Income Declaration Scheme (VAIDS) as a first level intervention, “may not be that effective in delivering higher revenues in a sustainable manner.”

Thursday 12 April 2018 FRSC calls spare parts dealers for collaboration on safety in Anambra Spare parts dealers in Anambra State have been advised to support the campaign for enhanced motor traffic safety on Nigeria roads. Sunday Ajayi, sector commander, Federal Road Safety Corps (FRSC), Anambra, gave the advice at the New Spare Parts Market in Nkpor, Idemili Local Government Area, Anambra State, on Wednesday. Ajayi, who addressed the traders during safety campaign tour, said spare parts dealers are critical stakeholders in ensuring safety on the nation’s roads. The FRSC official attributed usage of fake spare parts as factors that causes most vehicular accidents, said if dealers would insist in selling genuine parts the accident rates would reduce. He said the agency would extend the campaign to other major stakeholders in the state to sensitise them Buhari must follow due process on $1bn security fund - Reps scribe KEHINDE AKINTOLA, Abuja House of Representatives has called on President Muhammadu Buhari to follow due process before drawing down the $1 billion security fund from Excess Crude Account (ECA). Abdulrasak Namdas, chairman, House Committee on Media and Public Affairs, gave the House position in an interview with Legislative correspondents in Abuja. Namdas (APC-Adamawa) said the National Assembly was yet to give any approval of $1 billion from the ECA to fight insurgency. He maintained that the normal practise in Nigeria is that any amount to be withdrawn from the federation account must have approval National Assembly to make public its l2018 budget, increase public trust KEHINDE AKINTOLA, Abuja Leader of the Senate, Ahmad Lawan on Wednesday, reiterated the resolve of the National Assembly towards making public its 2018 budget in line with the provision of Freedom of Information Act. According to the timeline scheduled by the leadership of the Senate and House of Representatives, the report of the 2018 budget is expected to be laid other floor of both Chambers on Thursday, April 19, 2018 and passed on Tuesday, April 24, 2018. Lawan (APC- gave the assurance during a press briefing on the forthcoming National Assembly Open Week, scheduled to hold between 25th to 29th June, 2018 at the premises of the National Ason the need to key into the campaign. Ajayi noted that if stakeholders collaborate and check factors that promote road accidents, the country would be better for it, and appealed to leadership of the traders to key to the commission’s drive of flushing out fake spare parts dealers in markets across the state. The FRSC official also educated the participants on the need to heed to safety rules and obey other necessary safety codes while driving. The sector commander urged vehicle owners to first go to driving schools before driving, as most of the accidents on the roads were manmade and avoidable. Chairman of the traders union, Aloysius Ozokwelu, commended the sector commander for the enlightenment and education of his members. from the National Assembly. “We are hoping that this will be brought before us before any amount is withdrawn. Although from the presidency we have heard some explanations that the president has not approved. “What we have been told is that the National Executive Council (NEC) has given its tacit approval and that it will still come to the National Assembly. But until we approve, no single amount can be taken from that account,” the Adamawa lawmaker said. In a separate interview with BusinessDay, Pally Iriase, Majority Deputy Chief Whip expressed optimism that the Executive will transmit the request on the $1 billion security fund to the National Assembly. sembly complex, Abuja. Some of the activities scheduled for the four-day event are: interactive session with the Executive arm of government on the Economic Recovery and Growth Plan (ERGP); interactive session with Judiciary arm of government on pre and post elections adjudication and constitutional separation of powers; interactive session with trade unions on economic growth and industrial relations; interactive session with traditional rulers and pressure groups and interactive session with civil society organisations on accountability and service delivery in governance as well as interactive session with women, youth and student groups. Lawan explained that the Open Week was aimed at C002D5556 BUSINESS DAY 39 NEWS L-R: Aillen Allkins, corporate vice president, Microsoft; Hakeem Fahm, commissioner for science and technology, Lagos State; Akin Banuso, GM, Microsoft Nigeria; Yaniv Natan, founder, Tek Experts, and Olawole Familoni, deputy vice chancellor, University of Lagos, during the official opening ceremony of Tek Experts office in Lagos. Pic by Pius Okeosisi FEC approves N61.4bn contracts TONY AILEMEN, Abuja in Plateau State for the construction of 44.625 kilometres for N19.392 billion, the 81km As part of efforts to improve infrastructure across the country, Federal Executive Council (FEC) has approved various contracts worth N61.4 billion. The dredging of the Escavos and Warri Seaport as well as replacement of the bad navigational aids at the port took the biggest chunk of the approvals at N13 billion. Ministers of power, works and housing, Babatunde Fashola, interior, Abdulrahman Danbazzau, education, Adamu Adamu, water resources, Suleiman Adamu, and transportation, Rotimi Amaechi, took turns to explain their ministries’ memos while briefing State House correspondents after the meeting presided over by Vice President Yemi Osinbajo. Fashola said the FEC also approved contracts for the Baban Lamba-Sharam Road fostering public perception and involvement in political dialogue and ensure greater public trust in governance. He maintained that Nigerian citizens have every right to understand the operations of the Legislature by promoting transparency and accountability. “Many Parliaments, including the National Assembly, are increasingly providing the pubic with information on their budgets, expenditures and financial activities. “Thirdly, parliamentary openness has also taken the form of direct engagement within the policy making process by providing citizens access to information about the laws under consideration, as well as opportunities to influence legislative deliberations. Lagos-Ota-Abeokuta road, which contract variation was approved from the initial N22 billion to N56.7 billion, and the Port Harcourt end of the Enugu to Port Harcourt road, which was awarded at the cost of N6.03 billion. According to Fashola, We will resist attempt to lift ban on Oando shares, shareholders tell SEC Group of shareholders under the aegis of the Proactive Shareholders Association of Nigeria (PROSAN), Trusted Shareholders Association of Nigeria (TSAN) and the Oando Shareholders Solidarity Group (OSSG), have threatened to take legal action if the Securities and Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE), lift the suspension on sale of Oando shares on NSE floor. Leaders of the groups, who on Wednesday made their position known to the press in Lagos, faulted SEC’s claim of carrying out forensic audit of Oando plc, and accused the commission of not doing anything tangible on the issue. Clement Ebitimi, coordinator of OSSG, who vowed that his group would in- “The Lagos-Ota-Abeokuta road was first awarded in year 2000, and it has since been left uncompleted because they was no budgetary provisions for it. “This administration in trying to move this contractor to site stated the revision of the rate. So the revised rate were brought to council today and a revision of N22 billion was approved for the 81 kilometres road, bringing the total contract price to N56.701 billion. “The third approval was for the section four of the Enugu Port Harcourt Road, the part between Abia and Port Harcourt, particularly in Port Harcourt that has been problematic and has failed severally. We have a contractor there but we needed to change the design because of the storm water drainage needs and the high water tables there so that the road does not fail. “FEC also approved an inter-ministerial committee to advise government on the best methods of disseminating information of the achievements of the current administration “At the end of the day, the council decided to set up an inter-ministerial committee to fashion out a marshal plan with the Ministry of Information to advise government on how policies and programmers could be better disseminated. In particular, to advise government on how the ministry and its agencies can deliver on its own mandate.” Education minister, Adamu Adamu, said FEC also approved the establishment of the first full Army University stitute legal action against SEC and the NSE if the technical suspension on Oando shares was lifted without the conclusion of the forensic audit, said the leadership of SEC had not handled the crisis as it should. Ebitimi, therefore appealed to the Presidency and the National Assembly to intervene in the interest of Nigerians and the economy. Also, Taiwo Oderinde, national coordinator of PROSAN, said, “Contrary to the impression out there, the forensic audit of Oando ordered since last year by SEC is not being done. They are only buying time while helpless Nigerian shareholders are suffering. “SEC’s report indicted Oando management. The management should be removed for the audit to take place. This is a manage- to be located at Biu in Borno State. The Ministry of Water Resources had in their memo highlighted the challenge of urban water supply, which is regressing. Other include the need to improve sanitation, which it said had “decreased over time.” The minster said, “We have not be able to meet the Millennium Development Goals and that works services in the rural areas are unsustainable, and spending on water sector has declined by .7% to 72% of the GDP in 2010. “We had three prayers for the council to approve the action plan: to declare a state of emergency on water and sanitation sector; to approve the establishment of Water, Sanitation and Hygiene Fund for the country. This fund will be one that federal, states and international donors can put in money so that we can begin to address the crisis water and sanitation sector in the country. ment that has been in place for over 19 years. After the audit, if they are innocent, they should be restored to take their position.” On his part, Mukhtar Mukhtar, national president, TSAN, who said the ordered forensic audit was not being carried out, questioned why the management of a company being audited be allowed to continue in office. He said the shareholders had also petitioned the House Committee on Capital Market and other Institutions, accusing the SEC of protecting Oando from probe. While commending the House Committee on its efforts to sanitise the capital market and to make it one of the best in the world, he said the time had come to take decisive action on the forensic audit of Oando.

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