Business
FG Makes N10tn VAT Under Buhari
The Federal Government has raked in N10.1tn from the collection of Value Added Tax under the regime of the President Muhammadu Buhari.
Consequently, the Minister of Finance, Zainab Ahmed, had adviced the in-coming government to increase the VAT from the current 7.5 per cent to 10 per cent.
VAT is a 7.5 per cent consumption tax administered by the Federal Inland Revenue Service when goods are purchased and services are rendered, and it is borne by the final consumer.
Revenue generated from VAT is usually disbursed to the three tiers of government through the Federation Accounts Allocation Committee.
An analysis of reports obtained from the National Bureau of Statistics showed that the VAT earnings continued to rise annually throughout the eight-year period.
The country earned N759.4 billion in 2015, N777.5 billion in 2016, N972.4 billion in 2017 and N1.1 trillion in 2018.
VAT collections in 2019 amounted to N1.2tn, N1.5 trillion in 2020, N2.1tn in 2021 while N2.5 trillion was paid in 2022.
The Tide source reports that the significant increase in VAT collection in the past two years is not unconnected with the decision by the Federal Government in 2020 to increase the VAT rate from five per cent to 7.5 per cent. This was part of the tax reforms included in the 2019 Finance Act meant to help the government achieve its revenue projections.
Meanwhile, economists have cautioned against raising the VAT from 7.5 per cent to 10 per cent by the incoming administration, as they argued that it would stifle the country’s economic growth.
The Finance Minister, who made the call during a courtesy visit to the headquarters of Voice of Nigeria in Abuja recently, said, “VAT is one of the ways to increase revenue and we still have to increase VAT because, at 7.5 per cent, Nigeria has the lowest VAT rate in the world, not in Africa, in the world.
“In Sub-Saharan Africa, the African average is 18 per cent, when you increase your VAT, your Gross Domestic Product will grow.
“So, tax compliance has increased. As a result, we have also adjusted our VAT rate from five per cent to 7.5, even though our target was 10 per cent. But you know how it is in Nigeria, we are targeting 10 per cent by the second year, we did so to increase revenue”.
Reacting to the development, the Director, Centre for the Promotion of Private Enterprise, Muda Yusuf, said the advice was coming too early considering the previous increase in 2020.
He said it was better to bring more people into the tax net than to impose more burden on those in the tax net.
“The revenue performance from VAT has generally been excellent in recent years. My view is that it is perhaps too early to review it again, especially in light of all the challenges that businesses are facing.
“Businesses are the main contributors of VAT and there are some other taxes that have already been proposed under the finance bill like excise and telecom tax. So, we have to be careful so as not to increase the burden on businesses.
“The better thing is to bring more people into the tax net than to impose more burden on those in the tax net”, he stated.
Business
NOSDRA Targets Improvement On Oil Sector Environmental Regulations
The National Oil Spill Detection and Response Agency has vowed to improve environmental regulations in the petroleum sector by accelerating memoranda of understanding with industry operators, ensuring they align with international standards.
NOSDRA’s Director-General and Chief Executive Officer, Engr. Chukwuemeka Woke, disclosed this in Abuja while playing host to members of the Clean Nigeria Associates Board of Directors, according to a statement from the agency recently.
According to the statement, the visit underscored the agency’s collaboration with industry stakeholders to bolster environmental safety in oil spill detection and response.
Woke expressed gratitude for the CNA’s congratulatory message following his appointment and acknowledged the association’s recognition of NOSDRA’s regulatory role.
He assured CNA that the agency will prioritise their requests and expedite the MOU process to ensure that petroleum companies operate in compliance with global environmental standards.
CNA’s Chairman, Dr. Adeshina Sadiq, who also serves as the General Manager of Health, Safety, and Environment at Seplat Energy, conveyed the association’s congratulations to Woke.
He stated the CNA’s desire to deepen collaboration with NOSDRA and move the MOU beyond paperwork to practical implementation.
Sadiq also proposed that NOSDRA expand CNA’s role in the biennial Global Initiative for West, Central, and Southern Africa summit, advocating for broader regional participation in oil spill response efforts, including in the Gulf of Guinea.
He called for the inclusion of a CNA board member and an executive in future summits to enhance their engagement.
While expressing the association’s quest for regional positioning by collaborating in oil spill response beyond the shores of Nigeria, including the Gulf of Guinea, Sadiq, according to the statement, urged “NOSDRA to expand the representation of CNA’s participation in the biennial GI-WACAF summit to include a board member of the association and another from its executive”.
Business
Customs, Rep Collaborate On Economic Growth, Security
The Nigeria Customs Service (NCS), through its Industrial Area Command, is set to collaborate with stakeholders to strengthen security, foster economic growth and build a brighter future for the Amuwo Odofin Federal Constituency, Lagos State.
When the member representing the constituency at the House of Representatives, Hon.George Olawande, paid her a courtesy visit, the customs area controller, Odeworitse Rebecca, said the command will collaborate with the constituency in accordance with the comptroller-general of customs, Bashir Adeniyi’s policy thrust.
According to Odeworitse, the command is working diligently to facilitate trade, generate revenue, and identify new factories for excise control.
“The command is responsible for supervising, collecting, and accounting for excise duty from factories producing excisable goods. We work diligently to facilitate trade, generate revenue, and identify new factories for excise control. Therefore, all corporate social responsibilities (CSR) regarding community development are forwarded to the headquarters for approval of the CGC.
“The Lagos Industrial Area Command’s doors are opened and fully prepared to collaborate with our stakeholders to strengthen security, foster economic growth and build a brighter future for the constituency in accordance with the CGC’s policy thrust.
“Close collaboration between stakeholders and security agencies is essential for sustainable development”.
However, the CAC said in accordance with the World Customs Organization (WCO) theme for 2024 International Customs Day (ICD) celebration ‘Customs Engaging Traditional and New Partners with Purpose’, further stated that, the Lagos Industrial Area Command shares in the constituency’s belief and dedication to the community.
She further called for closer collaboration and continued partnership in ensuring the effective and efficient operations of the Service in Festac Town.
Speaking earlier, Hon.Olawande said he was on a collaboration tour to security agencies within the constituency towards community development of the constituency.
Business
FG, Russian Consortium Sign Agreement On Ajaokuta Steel Plant Rehabilitation
The Federal Government has signed an agreement with a Russian Consortium Company for the rehabilitation, completion and operation of the Ajaokuta Steel Plant and National Iron Ore Mining Company in Kogi State.
The Head, Press and Public Relations Department, Ministry of Steel Development, Salamatu Jibaniya, disclosed this in a statement recently.
According to the statement, the agreement was signed by the Minister of Steel Development, Shuaibu Audu, when he led a Nigerian delegation to Moscow, Russia, on a working visit.
According to the statement, “The Federal Government of Nigeria through the Honourable Minister of Steel Development, Prince Shuaibu Abubakar Audu, who led a Nigerian delegation to Moscow, Russia from 14th – 21st September 2024, on a working visit, has signed a Memorandum of Understanding (MoU) with the original builders of Ajaokuta Steel Plant Messrs, Tyazhpromexport (TPE) and members of their consortium namely; Novostal M and Proforce Manufacturing Limited for the Rehabilitation, Completion and Operation of Ajaokuta Steel Plant (ASP) and National Iron Ore Mining Company (NIOMCO) in Kogi State, Nigeria”.
It explained that the call was accepted by the Russian Federation when a consortium led by Messrs TPE visited the steel plant in Ajaokuta and the iron ore mining site at Itakpe in August 2024 for preliminary inspections leading to the invitation for the signing of the Memorandum of Understanding.
Audu said this is a bold step towards creating a sustainable base for the industrialisation of the Nigerian economy, noting that the revival of the steel sector will also reduce the importation of steel products into Nigeria, which is estimated at over $4 billion annually and will help save scarce foreign exchange.
The statement further said during the visit, the Nigerian delegation met with the Deputy Minister of Industry and Trade of the Russian Federation, Alexey Gruzdev, and the consortium, led by TPE, assured the Nigerian delegation of the readiness of the consortium to meet the expectations of the MoU with the Nigerian government.
In his remark, the Permanent Secretary, Ministry of Steel Development, Chris Isokpunwu, affirmed the commitment of the Nigerian government to revamp the Ajaokuta steel project and national iron ore mining company.
The President of Metallurgical Holding, “Novostal – M”, Demchenko Ivan Ivanovich, assured the delegation of their readiness to submit a detailed proposal for the project after the comprehensive audit of the plant.
The General Director of Messrs TPE, Egorov Sergei Anatolevich, and the Group Managing Director of Proforce Manufacturing Limited, Adetokunbo Ogundeyin, assured the Nigerian delegation of their commitment to the project because of its critical role in the overall economic development of Nigeria and requested the provision of an enabling environment by the Nigerian government.
“The parties expressed their optimism that the full implementation of the MoU will facilitate the revival of both Ajaokuta Steel Company Limited and National Iron Ore Mining Company and could create over 500,000 direct and indirect jobs for Nigerians and increase the size of the economy by billions of dollars thus contributing immensely to President Tinubu’s desire to grow the economy to over $1trillion by 2030″, the statement continued.
The steel company, located in Kogi State, was built between 1979 and functioned up till the mid-1990s, but it has become moribund.
In September 2022, the Nigerian government agreed to pay $496 million to settle an Indian firm’s claim over the facility.
The dispute followed the Federal Government’s revocation in 2008 of an agreement that handed control of the steelworks and the National Iron Ore Mining Company to the Indian firm.
In cancelling the deal, the Umar Yar’adua administration said the terms of the concession at the time were not favourable to the country.
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