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Overseas Profits: Companies Want Tax Relief

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Many American companies will love to move the big pot of money they make overseas back to the United States, saying they can use the money to create jobs, just as they are pushing in Congress for a tax break to do so The Tide source states.

Critics say there is a big problem with that idea: It has been tried before, and it does not work.

But as Congress continues to grapple with mounting budget deficits, and amid talk of revamping the tax system, the corporate tax holiday could get traction.

Generally, the US corporate tax rate stands at 35 per cent, the highest in the industrialised world. But companies don’t have to pay that rate on profits made outside of the United States. So lots of companies shelter profits offshore.

The tax holiday would lower the corporate tax rate to 5.25 per cent for big companies such as the bill’s proponents including Google, Oracle and Cisco if they move their overseas profits to the United States.

Proponents say the move would bring as much as $1trillion into the United States, spur big companies to create jobs and give Treasury more revenue to work with to slash mounting federal deficits.

But tax holiday opponents, including Treasury Secretary Timothy Geithner, are skeptical.

They say a similar holiday in 2004 didn’t spur companies to hire more or grow.

Nevertheless, last week, a bipartisan group of lawmakers filed a bill that would reduce the corporate tax rate to 5.25 per cent on offshore earnings brought back to the United States.

The measure has big guns behind it. Leading the way is a group called WIN America, which stands for Working to Invest. Now, that includes three dozen major corporations, including some in technology, energy and health care.

The US Chamber of Commerce supports it as does House Majority Leader Eric Cantor. So does Andy Stern, who used to run the Service Employees International Union.

“While fundamental tax reform will take time, repatriation is an interim step that we can take to encourage businesses to bring investment back into our country,” Cantor said in a statement.

One company in the coalition pushing for the tax holiday is the drug maker Pfizer, whose untaxed foreign profits topped $48.2bn in 2010, according to accounting expert, Jack Ciesielski.

But independent research suggests that the holiday might not do much for the economy or deficits.

The Joint Committee on Taxation estimates while tax revenue would jump by $25bn in the first few years, it would ultimately cost taxpayers $80bn over the next decade.

In a congressional hearing last week, an economic policy specialist for the Congressional Research Service, Jane Gravelle, said a similar corporate tax holiday that Congress passed in 2004 didn’t create new jobs to the economy, as intended. Instead, companies paid shareholders and hoarded money overseas anticipating another tax holiday.

“We’ve seen this movie before. After the 2004 tax holiday, corporations parked even more money offshore in anticipation of a sequel,” said a Treasury Department official. “If Congress were to offer a second stand-alone tax holiday, companies would have an even bigger incentive to keep their profits overseas in the hopes that it would become a trilogy.”

Geithner has said in testimony to Congress that he wants “comprehensive reform” that lowers corporate tax rates, broadens the base and gives incentives for people and companies to invest more in the United States.

The business community, itself, isn’t unified in support of a one-time tax holiday.

At the same hearing last week, a panel of chief financial officers said they thought a one-time tax holiday would be a mistake. The group included Edward Rapp of Caterpillar, Mark Buthman of Kimberly-Clarke, Greg Hayes of United Technologies and James Crines of Zimmer Holdings.

“Done in isolation, I don’t believe it accomplishes the goal of leveling the playing field,” Crines said in the hearing.

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Maritime

Shippers’ Council Registers 160 Port Operators

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The Nigerian Shippers Council (NSC) says it has registered 160 Port stakeholders into its Regulated Port Service Provider and Users platform since the initiative began in 2023.
Executive Secretary, NSC, Mr Pius Akutah, made the disclosure on the sideline of a sensitisation programme by the commission for port operators in Lagos, with the theme, “Regulated Port Service Provider and Users”.
Represented by the Director, Consumer Affairs, Chief Cajetan Agu, Akutah emphasised the significance of the programme for stakeholders.
He said the sensitisation programme was the second edition after its commencement during the last quarter of 2023.
The Secretary said the 160 registered port operators consist of agencies, terminal operators, shipping companies, individual port users as well as service providers.
“We invited the ports stakeholders for enlightening them on the processes for online registration of Regulated Port Service Provider and Users.
“We have demonstrated to them how to register and how to make payment and we were able to present before them the various categories of the registration.
“The rate of payment is also in the registration. The payment of each group depends on the operation. A shipper pays N30,000, terminal operators and shipping companies pay N300,000, truckers also pay N30,000, while some pay N50,000 and N100,000.
“The Council was able to intimate them on the benefits, because port users benefit more as we help to interface on reducing port charges from time to time”,  Akutah said.
He said  that there was a need to continue to work with port operators to stop delays and eliminate high costs to make the port efficient.
Also speaking, the Deputy Director, Stakeholders, Service, NSC, Mr Celestine Akujobi, said “the sensitisation exercise was important for the council to enable us bring all the port stakeholders together”.
According to him, this is to avoid challenges during the implementation of the council’s responsibilities.
“By the time we introduce sanctions on defaulters, no operators will complain that he or she is not aware of the registration.
“I’m happy with the turnout of this sensitisation. This shows that the operators are well informed of the statutory friction of the council as the port regulator.
“The final implementation will commence as soon as we discover that all the operators have keyed into the portal.
“We are engaging other ports across the country and we’re hopeful that before the last quater of 2024, the council will implement sanctions on defaulting operators”, Akujobi said.
Earlier, Vice Chairman, National Association of Government Approved Freight Forwards (NAGAFF), Dr Ifeanyi Emoh, said  port challenges were enormous, adding that they originated from some of the government agencies.

Emoh urged the council to look into regulating other government agencies, so that there could be a window through which they can collect port charges collectively instead of indiscriminately.

By: Chinedu Wosu

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Business

Chivita, Hollandia Reward Outstanding Trade Partners At Annual Conference

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Chivita| Hollandia (CHI Limited) leading fruit juice and value-added dairy manufacturer in Nigeria has rewarded its long standing distributors at the recently held 2024 Distributor Conference. The event with the theme, “Break Boundaries Exceed Expectations” served as a platform to recognise and reward the exceptional contribution of the distributors and wholesalers who play a critical role in Chivita|Hollandia (CHI Limited) success and business goals for the year.
The Distributor Conference was held in two sessions. While the morning session featured keynote addresses, industry insights and brand immersion experience, the evening session was a cultural display of elegance and funfair that culminated in the award presentation and recognition of the contribution the trade partners made to the company in the 2023 year under review.
A key highlight of the event was the award ceremony which acknowledged outstanding trade partners in various regions across the country. The awards recognized commitment, dedication, and outstanding performance in areas of sales growth, brand promotion, and market expansion.
Eelco Weber, Managing Director, Chivita|Hollandia (CHI Limited), stated that the company’s success story is incomplete without the strong partnerships it has built with trade partners. “Today, we celebrate not only the achievements, but the collaborative spirit that has made our growth possible” he said.
Bola Arotiowa, Chief Commercial Officer, Chivita|Hollandia (CHI Limited), in his statement revealed that, the event which was first of its kind will continue to be an annual meeting to enable the company work more closely with its distributors, share insights and action points, help the trade partners familiarize themselves with the company’s goals and objectives for each year, and serve as a driver for mutual success.
“Our distributors are the backbone of Chivita|Hollandia (CHI Limited). Their relentless efforts in distributing our products, promoting our brands, and expanding our reach across the nation is truly commendable. As the bridge between us and our valued consumers, it is very important to reward their hard work and dedication for being an essential part of the Chivita|Hollandia (CHI Limited) family. Together, we will continue to deliver great products to our conusmers which in turn will deliver value to them”, Mr. Arotiowa added.
Speaking at the conference, HajiyaBilikisuSaida, Chief Executive Officer of Smabirm Nigeria Limited, who won the Outstanding Distributor of the Year in North 1 region, and got a reward of two million Naira worth of Chivita|Hollandia (CHI Limited) products expressed delight at the company’s recognition, and stated that the awards served as a way to inspire distributors to do more and put in more effort, which in turn would help both the distributors and the company to grow.
Other outstanding performance distributors of the year rewarded with a two million Naira worth of Chivita|Hollandia (CHI Limited) stock include, Sunny Chuks Limited for East 1 region, MRS FA & Sons Limited for East 2 region, Hussakas Ventures for North 2 region, Rookee 1388 Ventures for Lagos 1 region, Pik N Pil Ventures for Lagos 2 region, FaithJoe Event Management Limited for West 1 region, and Progress Family Nigeria Enterprise for West 2 region.
The annual Distributors Conference aims to strengthen the bond between Chivita|Hollandia (CHI Limited) and its trade partners. This collaborative approach fosters mutual growth and ensures the continued success of the brands in the Nigerian market.
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Business

AXA Mansard Backs Female-Owned MSMEs With N1.4m Grant

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A global leader in insurance and asset management, AXA Mansard, has supported three female-owned MSMEs with business grants totaling 1.4 million to boost their operations.
This, the company said, is part of its commitment to women and the Medium, Small, and Medium-scale Enterprise (MSME) sector in the country.
The three businesses were successful at the International Women’s Day Pitch Competition, organised in partnership with SME 100 Africa in Lagos.
According to the Head of Marketing, AXA Mansard, Olusesan Ogunyooye, the competition, which is aimed at supporting female entrepreneurs in Nigeria, “is another way AXA is demonstrating its commitment to the causes of women and stimulating the MSME sector in Nigeria”.
The business pitch competition received numerous entries from women across different sectors, but after a rigorous selection process, shortlisted participants were selected to participate in the competition.
Ogunyooye said “the programme provided a unique opportunity for women from various works and socio-economic classes to showcase their innovative ideas and solutions in sectors such as food, tech, fashion, and fragrance, creating an atmosphere filled with excitement, enthusiasm, and a strong sense of community”.
He stressed the importance of investing in women, saying it is not just the right thing to do, but also aligns with AXA’s purpose of acting for human progress.
He explained that AXA believes the future of women should not be at risk, hence investing in their economic empowerment is a crucial part

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