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FIRS Explains Tax Waivers on Penalties



tax relief
  • FIRS Explains Tax Waivers on Penalties

The Federal Inland Revenue Service (FIRS) yesterday explained that its recent decision to grant tax waivers on penalty and interest was part of the federal government efforts to improve the ease of doing business among micro, small and medium scale enterprises (MSMEs) in the country.

The waiver to MSMEs on tax penalties and levies is from 2013 to 2016.

Speaking yesterday in Lagos at a public-private dialogue (PPD) which focused on: “Tax and regulatory policy framework for MSMSE in Nigeria,” organised by the National Association of Small and Medium Enterprises (NASME) with the support of Deloitte and Enable2, the Chairman of FIRS, Mr. Babatunde Fowler, noted that in terms of the waivers, MSMEs have to apply before the close of the window on December 31, while adding that another condition which the MSMEs have to fulfill was the payment of 25 percent of the outstanding taxes.

He stated that it was the desire of the federal government to give waivers on interests and penalties to MSMEs, stressing that the government was working to reduce the tax burden on the citizens. He expressed optimism that before the end of the year, the new tax law will become effective.

Fowler explained that due to the nature of business and the level of record keeping of MSMEs, his agency decided to give them extra time to present their records. The FIRS boss said his agency would also educate the MSME operators on all the charges, dues, levies or even penalties are not taxes.

He added: “Going forward we believe by next year everyone should be complying in terms of taxes, and the issues of tax holidays will not arise.

We have also deployed technology free of charge to all states of the federation, including the state government so that the tax portion can be remitted directly; even the state tax and the federal portion are remitted directly.

“Within the allowable structures, we will assist the states through programme capacity; we have to understand that there is a little federal and the state can do. They have their own constitutional independence; therefore there is a limit to how far we can go.

“The federal government does have the MSMEs as it number one priority because we believe that for any economy to work, you (MSMEs) have to work. Those who have assets in excess of 300 million are at the top scale. In terms of the waivers, the taxing authorities in Nigeria are distinct. We do have the prerogative to make policy on the federal taxes.

“The state’s internal revenue service boards are totally autonomous and they also have to make separate policies. This has slowed the duplication of taxes in Nigeria. What we have discovered is that there are now illegal charges collected by some officials who call themselves revenue operators at the local government level.”

In her remark, the Minister of Finance, Mrs. Kemi Adeosun, represented by the Director of Technical Service Department, Hajia Larai Shuaibu, noted that as part of measures to encourage businesses with a tax system that is easy to understand, the government constituted the National Tax Policy Review Committee (NTPRC) to review the National Tax Policy Document.

She stated that the exercise was setup with a view to addressing the modalities for simplifying the processes and reducing the tax burden on small businesses.

Adeosun called for the review of qualification for lower income tax rate applicable to small businesses in line with current economic realities, adding that the income tax rate for small businesses should be further reduced as an incentive to encourage compliance and promote MSMEs.

She noted that the review would be a continuous exercise, as a means of evolving global best practices and keeping with the domestic socio-economic realities. According to her, government has initiated the process of working towards having some recommendations of the committee as part of its 2017 fiscal Policy Measures.

The Minister added: “The Ministry of finance shall work with the legislature to ensure that the requisite changes to tax laws are enacted together with the Appropriation Act of the same year. This would require the executive to timely present the tax laws as executive bill for the timely consideration of the National and State Houses of Assemblies.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade experience in the global financial markets.

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Merger and Acquisition

Reactions as Equinix is Set to Acquire Nigeria Based MainOne in a $320 Million Deal



Equinix, yesterday, announced its intended acquisition of MainOne, a leading West African data centre and connectivity solutions provider, with a presence in Nigeria, Ghana and Côte d’Ivoire. The acquisition has been pegged at $320 million.

The acquisition is expected to close Q1 of 2022 subject to the satisfaction of customary closing conditions including the requisite regulatory approvals.

Following the announcement, several people are already expressing their views about the intended acquisition.

Aside from the many congratulatory messages and accolades showered on the Funder of Mainone, Mrs Funke Opaka, some believe that there are suspicions in the deal.

A Twitter user Osamarine Victor Asemota said “who wants to do a Twitter space conversation about the MainOne deal tonight? We should do more analysis of these things more often. Something doesn’t quite sit right with me on it. Was it competition they were afraid of? Why not sell to Google or Facebook?”

Subsidy? If mainOne has at least 3 fibre termination in every state, lots of folks like me would walk around last-mile coverage, if their bandwidth cost would be reasonable. At supposedly less than 20% capacity utilization, deeper penetration would be the deal-breaker,” another Twitter user wrote.

“I am actually shocked to read about the deal just this morning. There was no indication that it was going to happen. And to be selling to a relatively unknown buyer again! I remember stories about the owner in the papers about some management issues, maybe that contributed to it,” Adewale wrote.

Mainone had $200MM in debt financing right? They weren’t making enough to make a dent on those debts in the last 8 years. Their valuation isn’t that low.”

“You only know the true story of a company when you have access to their financial records. Most stories on Internet about companies’ successes are half-truths,” Francis wrote.

MainOne was founded in 2010. The company has enabled connectivity for the business community of Nigeria and beyond. MainOne’s assets include:

Three operational data centres, with an additional facility under construction expected to open in Q1 2022. These facilities will add more than 64,000 gross square feet space to Platform Equinix, in addition to 570,000 square feet of land for future expansions.

An extensive submarine network extending 7,000 kilometres from Portugal to Lagos, Accra and along the west African coast, with landing stations in Nigeria, Ghana and Côte d’Ivoire.

A terrestrial network of more than 1,200 kilometres of reliable terrestrial fibre in Lagos, Edo and Ogun States. Connectivity to terrestrial sites extends across 65 PoPs (points of presence) in cities across Portugal, Nigeria, Ghana and Cote d’Ivoire.

Access to key internet exchanges enabling low latency to key global networks, including Amazon, Microsoft, Apple, Google and Facebook.

An estimated 800+ business-to-business customers, including major international technology enterprises, social media companies, global telecommunications operators, financial service companies and cloud service providers.

Nearly 500 employees and a management team with a deep understanding of local and international markets.

The acquiring company, Equinix, on the other hand is comprised of 237 data centres across 65 metros and 27 countries, providing data centre and interconnection services for over 10,000 of the world’s leading businesses.

In a statement released yesterday MainOne founder, Mrs Opaka, expressed her delight with the acquisition. “Equinix will accelerate our long-term vision to grow digital infrastructure investments across Africa. I thank our founding shareholders led by Mr. Fola Adeola, MainStreet Technologies, AFC, PAIDF, FBN, Polaris and AfDB for investing in the MainOne vision to bridge the Digital Divide in Africa. With similar values and culture to what we have jointly built in twelve years, Equinix is the preferred partner for our growth journey. The MainOne team is excited about the partnership created through the acquisition, and we look forward to building our next chapter together,” she said.

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Meet the New Ecobank Managing Director Designate, Mr Lawal Jubril



Lawal Jubril

Ahead of the retirement of Mr Patrick Akinwuntan, the current MD of Ecobank, Mr Jubril Lawal has been announced as the new managing director designate of Nigeria operation and regional executive of Ecobank. He is to replace Mr Akinwuntan come January 2022 when his retirement will be due.

Meanwhile, the appointment is still subject to the approval of the Central Bank of Nigeria, the Bank said in a statement on Monday.

Speaking of his expertise in the banking sector, the Monday statement intimate that Jubril Lawal joins Ecobank having been a versatile senior banking executive and digital transformation specialist for over 28 years with Guaranty Trust Bank Plc. He has deep involvement and experience in digital and retail banking, corporate and commercial banking, credit risk management and corporate finance.

Mr Mobolaji Lawal holds a Bachelor of Law degree from the Obafemi Awolowo University, Ile-Ife and a B.L. from the Nigerian Law School. In addition to this, he possesses a Master of Business Administration from Oxford University, United Kingdom.

Similarly, to his credit, he has several completed management and banking developmental programmes. He is a trained management expert at institutes such as Harvard Business School, Stanford Graduate School of Business among others.

Apart from his certifications and academic qualification, he was an Executive Director at GTBank Plc Nigeria, and Non-Executive Director at both GTBank Ghana and Nigeria Interbank Settlement Systems Plc.

He is reputed to have led the team that envisioned and implemented GTBank Plc’s retail and digital banking strategy to achieve industry-wide leadership over a ten-year period. He has introduced new products and solutions that have helped to deepen payments and access to digital financial services in Nigeria

Upon the announcement, several positive and assuring comments have been rolling in for the new MD. From the CEO of Ecobank Group to the Chairman of the bank’s board, it has all been extortion and expression of their strong belief and confidence that Mr Lawal coming on board is a great decision.

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Merger and Acquisition

MainOne to be Acquired by America’s Equinix in a $320m Deal



MainOne - Investors King

Nigerian and West African data centre and cable service provider, MainOne is close to being acquired by an American internet company in a deal that is touted to have a value of $320 million.

In a release by Equinix, the $320 million deal is expected to be sealed and signed in the first quarter of 2022, pending the satisfaction of conventional closing conditions, including the required regulatory approvals.

A Public Relations personnel from MainOne confirmed the deal, but stated that he had access to limited information. He was however convinced that the deal would be a total buyout.

MainOne was founded in 2010 by Funke Opeke, a Nigerian. The company has over 1,000 kilometres of reliable terrestrial fibre networks across the southern region of the country, while also owning and operating a subsea network from Nigeria to Portugal (in Europe).

The company also has digital infrastructure assets including three data centres (which are operational) across the western area of Africa. It also has another facility under construction, which is set for a launch in Q1 2022. These facilities have helped the company enable connectivity for Nigeria’s business community.

Equinix, on this background believes that MainOne is one of the most thrilling tech businesses to come out of Africa. Charles Meyers, the CEO and President of Equinix which has its headquarters in California, stated that the acquisition of MainOne would be the first step in the company’s strategy to become a leading African carrier neutral digital infrastructure company in the long term.

Meyers said that MainOne’s leading position in interconnection and its experienced management team are critical assets in Equinix’s bid to become the leading neutral provider of digital infrastructure across Africa.

Meyers noted that the growth in data consumption in Africa is one of the fastest in the whole world, and MainOne’s infrastructure, customer relationships and operating capability will extend Equinix’s reach and boost opportunities for customers based in Africa and other parts of the world.

It was agreed in the deal that all members of the MainOne management team, including the CEO will continue in their respective roles. Equinix will also take on MainOne’s about 500 employees, but it is unclear what will happen to them under the new dispensation.

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