- NECA Opposes Stamp Duty Payment on Share Capital
To encourage the establishment of more companies in the country, the Nigeria Employers’ Consultative Association has called on the Federal Government to stop the payment of stamp duty on share capital.
The association suggested that a minimum flat fee should be introduced for the stamp duty payment, while responding to questions on how some proposed bills and amendment to some acts would affect private sector operators.
The employers’ group also called on the government to address the issue of appointment of auditors by Micro, Small and Medium Enterprises as contained in sections 357, 370-375 of the Companies and Allied Matters Act CAP C20, LFN 2004.
The Director-General, NECA, Mr. Olusegun Oshinowo, stated that for the country to improve on its ranking of ease of doing business and attract more investors, the act must align with international best practices that called for the elimination or reduction of payment of stamp duty on minimum share capital.
According to NECA, other clauses, which relate to multiple dictatorship and definition of small companies as provided in CAMA should be reviewed.
It said, “We also advocate that the requirement of a minimum share capital be abolished. Government should reduce significantly, or eliminate completely, the payment of stamp duty on share capital. Alternatively, a minimal flat fee should be introduced for the payment of stamp duty and incorporation/filing fees together regardless of the share capital of the company, in order to encourage the establishment of more companies.
“We believe that the MSMEs should be exempted from the requirement to appoint auditors whilst their annual turnover remains below a pre-determined threshold; exempt the MSMEs from the requirement to file audited financial statements along with their annual returns; and the format of the financial statements for the MSMEs should be simpler than for larger companies.”
The Senate had promised to fast-track the passage of over 40 priority bills recommended by the National Assembly Business Environment Roundtable, which would improve the Nigerian business environment and bring the country out of recession.
Commenting on the planned review of the Companies Income Tax Act, Oshinowo warned that the interpretation of Section 19 of the Act by the Federal Inland Revenue Service to impose an additional tax of 30 per cent corporate tax on dividend paid out of retained earnings after paying a 30 corporate tax to the government would amount to double taxation.
According to him, this will provide an incentive for companies to distribute all profits made in a particular financial year to shareholders even when there is compelling need to reinvest such profits in the business.
He added, “This policy encourages capital flight and incidental increase in the demand for foreign currency for repatriation instead of reinvestment, which is not good for the country. We request that the FIRS should issue a circular or financial order exempting retained earnings of all companies as long as corporate tax had earlier been paid in order to facilitate reinstatement of profits so as to generate more employment in Nigeria.
“Government must walk the talk by ensuring that all its agencies should guarantee that any policy they will be introducing henceforth must facilitate the ease of doing business and commerce, and not create bottlenecks.”
The association, however, approved of the National Development Bank of Nigeria (Establishment) Bill, the National Road Fund (Establishment) Bill, and the Petroleum Industry Bill all of which were aimed at improving the business environment in the country.
South African Government to Sell Stake in South African Airways to Takatso Consortium
The South African government is selling a 51% stake in South African Airways (SAA) to Takatso consortium, which will initially commit more than 3 billion rand ($221 million) to give the struggling airline a new lease of life.
SAA has been under a form of bankruptcy protection since December 2019, but its fortunes worsened during the COVID-19 pandemic and all its operations were mothballed in September 2020 when funds ran low.
The airline is one of a handful of South African state companies that depend on government bailouts, placing the national budget under huge strain at a time of rapidly rising debt.
The partnership with Takatso will alleviate that financial burden, public enterprises minister Pravin Gordhan told journalists on Friday as the state would no longer provide any funding to the airline, which exited administration in late April after receiving 7.8 billion rand from the government. read more
Gordhan added that the government will retain a 49% stake with the intention of eventually listing the airline to address future funding requirements.
“The objective of bringing in an equity partner to SAA is to augment it with the required technical, financial and operational expertise to ensure a sustainable, agile and viable South African airline,” he said.
The consortium includes pan-African investor group Harith Global Partners and aviation group Global Aviation, Gordhan said.
Following the announcement, co-founder and consortium Chair Tshepo Mahloele told Reuters that 3 billion rand should be sufficient to operate the airline for 12 to 36 months.
The government could dispose of more of its ownership stake going forward, he added.
“They aren’t married to this 49%,” he said. “They won’t be putting more money into this asset.”
An initial public offering for the airline is unlikely to happen within the next three years, and SAA would first need to become profitable, Takatso Chief Executive Gidon Novick said.
Novick said Takatso would seek to relaunch SAA as soon as possible, prioritising first domestic service followed by regional destinations.
International long-haul routes would follow but would be selected carefully, and SAA would also work to forge partnerships with major carriers.
“We’re going to be competing with the greatest airlines in the world, and we need to be mindful of that,” Novick said.
The airline’s subsidiaries meanwhile will be evaluated, in particular Air Chefs, SAA Technical and low-cost airline Mango, Gordhan said, noting that “anything can happen” when asked if some could be shut down.
SAA will continue to be domiciled in South Africa and the government will have a “golden share” of 33% of the entity’s voting rights and certain areas of national interest, Gordhan said.
($1 = 13.5379 rand)
Coca-Cola Partners NGOs To Clear Plastic Waste In Nigeria
Coca-Cola Nigeria has said it partnered with non-profit organisations to reduce plastic pollution across the country.
In a statement on Thursday, it said it would be doing more to promote environmental sustainability as part of efforts to commemorate World Environment Day.
It stated that it had introduced initiatives to protect the environment through its philanthropic arm, the Coca-Cola Foundation.
Coca-Cola said that it supported the Statewide Waste and Environmental Education Foundation to launch the Eko Beach Race 2021 themed ‘A race against plastic pollution.’
The event had in attendance 2,000 youths, students and sports enthusiasts who participated in a marathon race and beach clean-up.
SWEEP Foundation’s President, Obuesi Philips, stated at the event that it “was geared towards recognising the growing contributions of sport to the realisation of societal development.”
The drink maker also partnered with the Aid for Rural Education Access Initiative to host the “Recycle and Win” festival.
It included community outreach and clean-up programmes in Kwara, Kano, Kaduna, Yobe and Oyo States. Coca-Cola said that 10 tons of plastic bottles were recovered through the process.
The Director, Public Affairs, Communications and Sustainability at Coca-Cola, Nwamaka Onyemelukwe, urged Nigerians to adopt more eco-friendly practices while emphasising the urgency of the current global situation.
Onyemelukwe stated, “At Coca-Cola, we recognise there is a packaging waste problem globally and especially in Nigeria, which is why we pioneered the World Without Waste initiative to engineer innovative solutions to tackle this challenge.
“World Environment Day presents an opportunity for us to act on this mandate as seen by the number of environmental sustainability initiatives we have supported in collaboration with local implementing partners.”
RAK Unity Petroleum to Shutdown as Shareholders Approved Liquidation
Shareholders of RAK Unity Petroleum Company Plc, at the company’s 18th Annual General Meeting, held on Friday, 4th June 2021, agreed that the company be wound up voluntarily in accordance with the provisions of the Companies and Allied Matters Act 2020.
The company disclosed in a statement signed by Olubukola Olonade-Agaga, ALSEC nominees Limited Company Secretary.
The liquidation is subject to the approval of the members of the Company in the general meeting.
The statement in part, “THAT Mrs Chinwe Chiwete of the law firm of EPIC Legal of Block 74, Plot 22B, Emma Abimbola Cole, Lekki Phase 1, Lagos be appointed liquidator for the purposes of winding up of the Company, subject to the approval of the members of the Company in the general meeting.”
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