NRTC Business Potpourri

In this week’s NRTC Business Potpourri, Roland Bayode gives a quick round up of the trending business news in Nigeria.

Budget 2022: Self-employed Nigerians make lots of money, should pay tax – APC Rep Fakeye

A member of the House of Representatives, Olufemi Fakeye has called on the Federal Government to tax self-employed Nigerians as they allegedly earn lots of money.

Fakeye, a member of the All Progressives Congress, representing Boluwaduro, Ifedayo and Ila Federal Constituency of Osun State. While commenting during the plenary session on the 2022 budget on the floor of the house stated that taxing small businesses will generate enough income for the government to boost its revenue.

He added, “I think our tax reform should be such that every Nigerian has a chance to contribute. Go out there and talk to 80 percent or 90 percent of the citizens, a lot of them who are self-employed don’t pay tax anymore. I pay attention to revenue shortfalls for the government. Growing up, I recall everybody paid taxes. Whether you are a farmer, your daddy was a carpenter, whatever he did for a living, he paid tax. Now we have inclined to forgive everybody their taxation except those who have an income where the tax is taken out of your income and the rest paid to you.

However, he questioned why do the Federal Inland Revenue Service or tax organisations, or even the tax joint boards when widening the tax net, shy away from finding a way to make people pay, stating that small companies with an annual turnover of not more than N25 million are exempt from paying the Company Income Tax under the Finance Act 2020, and these people make a lot of money but they don’t get to pay anything. So I think that is an area I would like to see revenue-boosting.

World Bank economist: Buhari, lifting 100 million Nigerians from poverty ambitious

The World Bank Lead Economist in the Middle East and North Africa region’s Poverty Reduction and Economic Management Group, Tara Vishwanath, has described the goal of the Nigerian President, Muhammadu Buhari, to lift 100 million Nigerians out of poverty in 10 years as ambitious.

Vishwanath, made this statement during a virtual World Bank media discussion on COVID-19 and jobs in Nigeria on Thursday in response to a question by a journalist. She stated that it was a very ambitious goal, which could only be achievable if precise rapid policies are put in place to provide opportunities in the labour market and boost investors’ confidence.

However, she added, “My short answer is that it is an ambitious goal. It is an ambitious goal but over a decade, many things can happen.”

FG’ll pay foreign debts before other obligations – CBN Governor, Godwin Emefiele

The Governor of the Central Bank of Nigeria, Mr Godwin Emefiele, has said at the ongoing International Monetary Fund/World Bank Annual Meetings in Washington DC, that the Federal Government will ensure the payment of foreign debts before settling other obligations.

Emefiele, while answering questions during the press briefing said, “We have ensured that any of our debts due is given utmost priority, particularly foreign debt. And we ensure that wherever we are going to find the dollar, we would pay any of our debts, even before we service any obligation. That is a rule if it is Nigeria’s authentic sovereign debt.”

However, the CBN governor, added that when Dangote refinery begins production latest by July 2022, it will be a major foreign exchange saving source for the country.

Tax reliefs deprive FG of N5.16tn in 12 months

The Federal Government has recorded a loss of about N5.16tn to tax reliefs granted on Value Added Tax, Company Income Tax and Petroleum Profit Tax in 2020.

This figure was reached, after analysing data from the 2022-2024 Medium-Term Expenditure Framework and Fiscal Policy Strategy report. According to the MTEF/FSP report, out of the N4.3tn tax gap, about N900bn is attributable to exemptions laid down in legislation, while the remaining N3.4tn is attributable to the compliance gap, and as a result of this, the current estimated loss due to policy gap might be too low and the compliance gap too high.

The report, also stated that the country lost N457bn to CIT waivers from large tax offices and medium tax offices, compared to the N1.1tn in 2019, representing a decrease of N634bn, of which Nigeria compares poorly to regional peers and the Organization for Economic Co-operation and Development benchmark with regards to CIT collection efficiency.

However, the Chairman, Federal Inland Revenue Service, Muhammad Nami, recently put the number of taxpayers in the country at 41 million, but he lamented that despite the high numbers of taxpayers in the country, compared to South Africa’s four million taxpayers, Nigeria earned far lower than what South Africa generated from Personal Income Tax.

The FIRS boss added that, “the number of billionaires in Lagos alone are more than the number of billionaires in the whole of South Africa but yet what we generated as Personal Income Tax by Lagos State Government is just less than N400bn, compared to the total personal income tax paid in South Africa last year which is about N13tn”.

Blame Nigeria’s high debt service on large expenditure, says finance minister

The Minister of Finance, Zainab Ahmed has blamed Nigeria’s high debt service to revenue ratio on the country’s large expenditure base, during an interview with Bloomberg TV on Friday, noting that a large proportion of Nigeria’s budget caters to payroll.

According to the minister, “Our debt service to overall revenue is high because we have a very large expenditure base. With a large proportion of our budget dedicated to payroll, and Mr President had decided from the beginning of his administration that we were not going to disengage staff. So, there are salaries and pensions to be paid. And also, we have to fund the judiciary and the legislative arms of government.”

However, She expressed hope in the current rise in oil prices stating that the rise would help the country earn more revenue from the sales to other countries, but noted that the repurchasing of petroleum products from other countries due to stagnant refineries reduces the revenue Nigeria earns.

It’s dangerous to link your SIM to another subscriber’s NIN – NCC

The Nigerian Communications Commission has advised telecommunication subscribers not to allow their National Identification Numbers to be linked to another person’s Subscriber Identity Module (SIM) cards.

The NCC Director, Consumer Affairs Bureau, Efosa Idehen, while speaking on ‘the Benefits of NIN-SIM Integration’, during the third run of its Telecom Consumer Town Hall aired on the radio, said;

“On no account should a telecom consumer, however circumstanced, allow another person to register a SIM with another person’s NIN. If the person, whose SIM is linked to your line, uses their own SIM for any crime or form of atrocities, it is easy to be traced to you and then, you will be dealt with because the SIM is linked to your NIN.”

He, however adviced that these precautions are meant to protect the true owner of the NIN from any liabilities or negative consequences arising from the use of other person’s SIM.
Also at the radio programme, the NCC further stressed that the deadline for NIN-SIM integration remains.

ILO partners renewable energy agency on employment

The Directors-General of the International Renewable Energy Agency and the International Labour Organization have signed an agreement to reinforce their cooperation to promote employment and decent jobs for women and men in an energy transition that leaves no one behind.

In a statement on the ILO’s website, the ILO Director-General, Guy Ryder said, “The rapid deployment of renewable energy is indispensable to the pursuit of the Sustainable Development Goals. Making such a transition conducive to decent work creation, with more and better jobs, while ensuring a just transition for all is essential.

Also, IRENA Director-General, Francesco La Camera, said, “We have seen significant progress in renewable energy deployment, which is reflected in the continuously increasing number of workers in the sector worldwide, but it is uneven across geographies and communities.

“Progress that is not just or inclusive is not sustainable. Achieving a green economy can not be done without creating opportunities for all, making sure that all groups of society have access to decent, well-paying jobs.”