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‘Naira Devaluation Affects Govt Business More’

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Following the global fall in
oil prices and the negative   effect on the naira, many especially the ordinary man on the street are questioning the rationale for government to continue with the same tax regime.
The thinking is that since individuals and corporate organizations purchasing power has fallen, it behoves the government to do something towards reducing taxes.
However, senior partner, Ikata, Ikata and Company, Port Harcourt, Mr Iduoku, Ikata has said that such reprieve was not possible on the part of the government.
Ikata, a tax expert, who spoke to our correspondent on Wednesday in an exclusive interview explained that government was the loser as the taxes paid presently were not enough to run government business.
According to him, since tax revenue has become a substantial component of government income, the government would not be in a hurry to lower tax rates.
He said even though government  was aware that the purchasing power of the ordinary man has dropped, what government could do was, only to introduce palliative measures.
Ikata said the drop in the value of the naira has shot up the cost of production for the government including cost of running government.
He said the Nigerian system was an import dependent economy and that most of the things that drive its activities are imported.
Explaining further, he stated, that if we were still importing petrol with the attendant subsidy costs, it means that government would pay more to secure the same amount of dollars that they used to spend before.
“The government which is now spending more naira to buy the same amount of dollars for petrol, cannot reduce the source of its income (tax), he said
Government, the tax expert pointed out, would not for whatever political reasons increase the price of petrol even as he said it was not logical to ask government to drop tax rates.
For instance, he continued, the same amount of tax that has been paid to government before the naira devaluation was the same being paid today.
This development according to him has increased government spending of more naira in contrast to the past.
In addition, Ikata explained that the argument in some quarters is that the reduction in taxes would encourage more people to be tax compliant.
This he said was because a lot of the tax payers evade tax on account that rates are high so if they are lowered the likelihood of more people paying taxes willingly would increase.
“If the tax rate is lowered some people can just walk into the tax offices and say look, I come to pay my tax” he said, with this tax reduction process Ikata said, people would be encouraged to surrender willfully to tax regimes even as he said the argument had nothing to do with the devaluation of the naira.
On possible palliatives, he said for any palliative that government would introduce in relation to the devaluation of the naira depends on the political will of government.
“The previous government came up with SURE-P but how did we benefit from the programme. So basically it remains a function of government’s political will to make sure that such palliatives work.

 

King Osila

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Traders Protest FG’s Move To Restore Festac Town

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The move by the Federal Government to restore Festac Town in Lagos to its original status has sparked up protest among traders occupying Agboju Amuwo Planks and Building Materials Market.
The traders on Wednesday, protested at the FHA office in Festac Town against the demolition of their market, following the demolition of illegal structures by the Federal Housing Authority (FHA) ahead of the restoration. 
The Tide recalls that there was a petition to the Minister of Works and Housing, Mr Babatunde Fashola, in 2020 about illegal structures that had taken over Festac Town.
Speaking at a stakeholders’ meeting on the restoration of Festac town organised by FHA, last year, its South-West Zonal Manager, Mr Akintola Olagbemiro, said, “This year, we commenced the restoration of Festac town, following the consent judgement from the court against illegal occupants of Festac land.
“Our action is to save the residents from the insecurity that has taken over the entire Festac town as a result of illegal structures everywhere”.
The chairman of allottees of First Gate to Third Gate, Mr Kole Olatunji, in his remarks at the meeting said the land from First Gate to Third Gate was allocated between 1985 and 1999, noting that with the consent judgment, original owners of the land as allocated should take over their plots.
But the chairman of plank market, Muhammed Bello, protested the seven-day notice given to traders to vacate the place without alternative arrangements.  
Bello said: “How do they expect us to remove our wares in seven days?
“What we want is that they should allow us to remain there and we will pay whatever amount they ask us to pay”.
Speaking in the same vein, the chairman of Cane Chair and Furniture Association, Emmanuel Okoye said: “We need freedom. Let them tell us where they want us to stay. That place was swampy. We filled the place with several millions of Naira which we got as loans.
“We also rely on loans to do our business. Whatever the government wants us to pay; we are ready to pay to remain there. We have been there for 27 years. What we lost to the demolition is over N300 million”.

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Fuel Tanker Explosion Kills Five, Injures Two In Ogun

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No fewer than five persons were on Wednesday burnt to death, while two others sustained first degree of injury in a fuel tanker explosion at Ajilete, along Owode-Idiroko road, in Yewa South local government area of Ogun State.
Eyewitness accounts revealed that a truck bearing 33,000 litres of petroleum product was descending the steep portion of the road when its tank suddenly detached from truck’s body and tumbled to the ground with a bang.
The explosion, the witnesses said, killed five persons on the spot, while two other persons were injured.
The Tide learnt that the seven victims were all residents of the area where the accident occurred.
Confirming the incident, the Federal Road Safety Corps (FRSC) Commander, Idiroko Unit, Akinwunmi Olaluwoye, said five deaths were recorded in the accident which occurred at about 8.15 am on Wednesday. 
According to him, the remains of the dead had been claimed by their families.
He disclosed that a bus and a motorcycle were also caught in a web of the explosion and razed.
He said, “no vehicle rammed into the tanker. The tank dropped off from the back of the tanker and exploded. The number of persons involved are seven; five dead, two injured.
“The driver had taken away the head of the truck as at the time we got there. But we have allowed the police to take charge and handle that aspect”.

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Travellers To Access $4,000  As CBN Boosts Forex Supplies

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Nigerians travelling abroad can now access a maximum amount of $4,000 foreign exchange from banks following the Central Bank of Nigeria’s (CBN) announcement to increase forex supplies.
The CBN had said in a recent statement that it had concluded plans to increase the amount of foreign exchange allocated to banks to meet legitimate needs.
This followed the warning by the CBN Governor, Mr Godwin Emefiele, to Deposit Money Banks to desist from denying customers the opportunity to purchase foreign exchange.
The purposes to access forex included Personal Travel Allowance, Basic Travel Allowance, tuition fees, and medical payments as well as Small and Medium Enterprises transactions or for the repatriation of Foreign Direct Investment proceeds, the CBN had stated.
Sources from some of the banks said those travelling on business trips could also access a maximum amount of $5,000 for each trip.
At a virtual Bankers’ Committee meeting last week, the bankers discussed how the CBN intended to assist with forex to ensure availability for the upcoming summer period and the return of students to school in September.
The CBN also said the BDCs would continue to have their weekly allocations.
The committee observed that the rates were going up.
It stated, “The CBN has said that all the banks must make availability at all times and anyone who wants to buy BTA, PTA, medical fees, student school fees and all the eligible invisible purchases to ensure that Nigerians are not forced to go and queue in the parallel market.
“So what the Central Bank is doing is to encourage all banks to make sure that there is available forex at all times, and that his information should be communicated on all our platforms.
“We are asking our customers to come to the branches and for BTA, for example, present the required documents, which are basically your international passport, your visa, your valid ticket and fill up the form in the bank.
“And what we have been instructed to do is ensure that we don’t turn anybody back and that we should request from the Central Bank once we exhaust the forex that we have.
“The idea is to have a hitch-free summer period and the resumption for children to go back to school. The idea is to ensure there is less pressure on the forex and then the rates will come down”.
Speaking during the virtual meeting, the Group Managing Director, Access Bank, Herbert Wigwe, said, “I think again as part of the Central Bank’s role in terms of price stability and the need to support small and medium enterprises, there was highlight of the need for banks to go and support SMEs who import small raw materials for them to set up their businesses”.
The Managing Director, Ecobank, Patrick Akinwuntan, said, “All banks are available to ensure forex need is met.”
Managing Director, Sterling Bank, Abubakar Suleiman, said the CBN had provided sufficient foreign exchange to meet the needs of all legitimate Nigerian travellers and therefore, the idea of going to any other market should not arise at all.

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