Business
‘Oil Price Drop ’ll Not Change Tax Payment’
Given that oil prices have
fallen globally with its attendant effects on every sector of the economy in Nigeria in particular, a tax expert, has said that the development would not affect the pattern of tax payment of the individual public servant.
Senior partner at Ikata Ikata and Company, Mr. Iduonku Ikata who stated this in an exclusive interview with our correspondent in Port Harcourt, Wednesday said the fall in oil prices would not affect the tax process of the individual worker.
He said since the individual worker pays tax under the Pay As You Earn income tax arrangement, such taxes were paid based on some parameters.
Ikata explained that with the 2001 amended “Beta” income tax pact, there is in place what is known as the consolidated relief allowance that government pays to all tax payers.
The tax consultancy expert explained that the government applies some exemptions to workers through their contributions to the National Housing Fund (NHF) and the contribution to the Staff Retirement Saving Scheme (PENCOM).
According to him, when all these are factored in, we then find out that the fallen oil price will not affect tax payers under this category.
However, the tax firm’s boss revealed that the opposite was the case for corporate organizations.
“Indeed, fallen oil prices will affect corporate income tax because such taxes are paid by corporate entities,” he said.
Further, he said for companies whose business activities are oil related, their total revenue or revenue generated at the end of the day would surely affect their turn over and the cost of doing business would be affected.
He said since the naira has been devalued it means corporate organisations would spend more to enable them execute the same job.
When this happens he further explained it means your profit by the end of the day will reduce.
“Therefore reduction in profit till affect the tax by the amount they pay,” he said.
In the circumstance, Ikata said the corporate entity would pay less tax, even as he said it would have been better if he (corporate) had paid more tax and made up profit.
“But now most of what could have accrued to them as profit has been eaten up by the devaluation of the naira.”
“That is how the fallen oil prices has affected the tax incidence on tax payers and the paying process,” he said.
On which sector bears the brunt of the development, the tax expert said it was the country’s economy.
“The economy, of course the economy is worse off generally because the government would have realised this and come up with a means of running expenditure because company income tax will be lower now,” he said.
“Payment of tuition fees for undergraduate/postgraduate studies shall be subject to a maximum limit of $25,000.00 per semester,” the Manual states.
The expansion of international card limits also reflects growing confidence among lenders that foreign exchange liquidity has improved enough to support retail dollar transactions.
Speaking recently at the BusinessDay 14th Annual CEO Forum in Lagos, CBN Olayemi Cardoso, governor of the CBN said buying and selling activities now increasingly determine outcomes in the foreign exchange market, unlike in the past when market participants relied heavily on routine Central Bank interventions.
According to Cardoso, Nigeria’s net foreign exchange reserves have risen from just over $3 billion at the start of the reform programme to more than $40 billion, while gross reserves have climbed to about $52 billion, providing stronger confidence for investors and enabling the Central Bank to reserve interventions for periods of market stress rather than day-to-day liquidity management.
The restoration and expansion of international naira card spending limits are increasingly being seen as one of the clearest signs that the benefits of the CBN’s foreign exchange reforms are beginning to reach households, students and businesses making legitimate cross-border payments.
The Secretary-General and Chief Executive Officer, WEC, Dr Angela Wilkinson, disclosed this in a statement, last Thursday.
“Nigeria’s participation comes at a pivotal time as the country seeks to expand energy access, strengthen energy security, accelerate gas development and mobilise the capital required for industrialisation and sustainable economic growth.
“WEC Nigeria will convene leaders from across the energy ecosystem, apply the WEC’s globally recognised Energy Trilemma framework to Nigeria’s unique context, and promote evidence-based dialogue, practical collaboration and informed policymaking.
“It will also ensure that Nigerian and broader African perspectives contribute meaningfully to global energy conversations,” she said.
Wilkinson expressed confidence that Nigeria would play a significant leadership role at the World Energy Congress scheduled for Riyadh in April 2027 and beyond.
The statement also quoted the Chairman of WEC Nigeria, Isa, as describing the country’s participation as an opportunity to deepen national and African leadership within the global energy community through practical solutions tailored to regional development priorities.
He said the platform would promote collaboration across sectors and attract sustainable investments into Nigeria’s energy sector.
The Chief Executive Officer of WEC Nigeria, Wunti, was quoted in the statement as saying that the council would connect leadership, evidence and investment to build a secure, affordable and sustainable energy system.
“This system will be capable of driving economic growth and shared prosperity.”
According to him, the platform will also connect Nigerian institutions and businesses with international knowledge, technology, partnerships and investment opportunities through the World Energy Council’s global network.
Recall that WEC, founded in 1923, is the world’s oldest independent and impartial community of energy leaders and practitioners, advancing informed, collaborative and practical action across the global energy system.