The Federal Government has hunted down 700,000 firms that have never paid taxes as it seeks new revenue sources to offset low oil prices that have pushed the country into its first recession in more than 20 years.
The Executive Chairman, Federal Inland Revenue Service, Tunde Fowler, said in an interview with Reuters that he also expected 10 million individuals to be discovered by December and made to pay taxes for the first time.
Nigeria slid into recession in the second quarter and militant attacks on oil facilities in the Niger Delta region have cut crude production, which provides 70 per cent of government revenues, by around a third.
The government, struggling to fund a record N6.06tn budget that aims to stimulate growth by tripling capital expenditure, set for the FIRS a target of raising N4.95tn in taxes this year, up from N3.73tn in 2015.
However, the FIRS does not appear to be on track to meet its target for tax collection so far this year, but experts believe it can do better in future.
“We collected a little over N2.3tn so far, from January to August 31. It is almost at par with last year but take into consideration that the economy is going through a little slowdown,” Fowler said.
He explained that revenue from Value Added Tax had increased by 25 per cent year-on-year and corporate income tax held steady over the same period, but petroleum profit tax was expected to have halved, mainly due to low oil prices.
Fowler, appointed last year after a stint as tax chief in Lagos where monthly tax revenues surged by 70 per cent in the four years to December 2012, said the FIRS was expecting to generate N5.2tn in 2017.
The tax chief said a new unit created at the start of the year had deployed inspectors armed with laptops to update databases, registering businesses and individuals who are then tracked to check whether they have paid taxes, with business executives saying they were getting “aggressive” visits from tax inspectors.
“We have been able to add about 700,000 companies and we expect to add about 10 million individuals across the nation by December,” said Fowler, adding that this would bring the total of registered individuals to 20 million.
John Ashbourne, Africa analyst at Capital Economics, said Fowler’s target of doubling the number of taxpayers was “ambitious” and would be hard to achieve in a country where “paperwork is often lacking.”
But he said the projections for 2017 were “quite achievable,” adding, “Revenue will almost certainly be much, much higher next year, but this is primarily due to the devaluation of the naira, which has boosted the local-terms value of each oil barrel that is exported.”
Even a doubling of the number of individuals paying taxes in Africa’s most populous nation of 180 million inhabitants, where 80 per cent of the workforce is employed in the informal sector, leaves the FIRS with an uphill struggle.
Stanbic IBTC Obtains Approvals, License to Establish Life Insurance Subsidiary
Stanbic IBTC Holdings Plc on Friday announced that it has obtained all required Regulatory Approvals and a license from the National Insurance Commission to establish a wholly-owned Life Insurance subsidiary, Stanbic IBTC Insurance Limited (SIIL).
In a statement signed by Chidi Okezi, Company Secretary, Stanbic IBTC and released on Friday, the bank said “The establishment of this new subsidiary essentially complements the bouquet of product offerings by Stanbic IBTC as it continues its goal of being the leading end-to-end financial solutions provider in Nigeria. In this regard, SIIL will aim to facilitate long term insurance for already financially included individuals and will seek to become the preferred Insurer in the Life Insurance Business.
“Stanbic IBTC Holdings PLC, a member of Standard Bank Group, is a full-service financial services group with a clear focus on three main business pillars – Corporate and Investment Banking, Personal and Business Banking and Wealth Management. The group’s largest shareholder is the Industrial and Commercial Bank of China (ICBC), the world’s largest bank, with a 20.1% shareholding. In addition, Standard Bank Group and ICBC share a strategic partnership that facilitates trade deals between Africa, China and select emerging markets. Standard Bank Group is the largest African financial institution by assets. It is rooted in Africa with strategic representation in 21 countries on the African continent.
“Standard Bank has been in operation for over 158 years and is focused on building first-class, on-the-ground financial services institutions in chosen countries in Africa; and connecting selected emerging markets to Africa by applying sector expertise, particularly in natural resources, power and infrastructure.”
World Bank to Discuss New $1.5 Billion Loan Request From Nigeria
The Finance Minister, Budget and National Planning, Mrs. Zainab Ahmed, on Friday said the Federal Government has met all the conditions for a fresh loan of $1.5 billion from the World Bank.
The minister disclosed this on Bloomberg TV.
She said the multilateral financial institution is in the final stage of approving the loan. The minister explained that the loan will be discussed in the bank’s next meeting and possibly be approved in the same meeting.
In June, the Senate approved the borrowing plans but the World Bank pushed back demanding Nigeria fulfill the conditions attached to the $3.4 billion loan received from the International Monetary Fund (IMF) in May.
Some of the conditions were to increase revenue generation by upping VAT, the introduction of tariff reflective electricity bill, the removal of subsidy and the unification of the nation’s foreign exchange.
Most of which the Federal Government has done despite protests from most Nigerians who called the new policies anti-people given their current situation.
Nigeria Realises Over N400 Billion from Company Income Tax in the Third Quarter of 2020
The Federal Government realised N416.01 billion from Company Income Tax (CIT) in the third quarter of the year, according to the latest report from the National Bureau of Statistics (NBS).
This was 3.48 percent higher than the N402.03 billion generated in the second quarter of the year and represents a decline of 20.13 percent year-on-year from N520.89 billion realised in the third quarter of 2019.
A breakdown of the report showed the professional services sector including the telecoms generated the highest amount of CIT at N55.52 billion during the quarter, while the manufacturing sector followed with N42.03 billion.
The banking and financial institutions realised N24.05 billion while the mining generated the least and closely followed by Textile and Garment Industry and Local Government Councils with N120.93 million, N167.51 million and N321.72 million generated, respectively.
The report added that out of the total amount realised during the quarter under review, a sum of N244.70 billion was generated as CIT locally. The federal government collected N70.34 billion as foreign CIT payment and the remain N100.97 billion was received as CIT from other payments.
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