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150 Wealthy Nigerians Face Asset, Tax Probe

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  • 150 Wealthy Nigerians Face Asset, Tax Probe

The Federal Government has engaged Kroll, a United Kingdom-based forensic and assets-tracing firm, and some other foreign firms to trace the assets of very wealthy Nigerians at home and abroad.

The names of 150 very wealthy Nigerians are on the list for the first batch of the exercise, which is expected to last for some months.

The Minister of Finance, Mrs. Kemi Adeosun, confirmed at a press briefing in Lagos on Thursday that the government had engaged some foreign firms to trace the local and foreign assets of some high net worth Nigerians.

She, however, refused to give the names of the other foreign firms the Federal Government had engaged for the exercise nor names of the wealthy Nigerians whose assets are being traced.

Adeosun said the objective of the exercise was to match the lifestyle of the wealthy individuals with the amount of tax they were paying to the Federal Government.

According to her, the government is building the profile of people to encourage them to pay the right taxes before wielding the big stick in terms of prosecution at the end of the nine-month window given for the payment of all outstanding taxes under the newly introduced Voluntary Asset and Income Declaration Scheme

She said, “How much we recover from their purses is not as important as getting people into the tax net and paying the right taxes. Majority of people who are paying taxes at the moment are the Pay As You Earn; most of the people whose taxes are being deducted at source. But the people who are evading taxes are either the people who own their businesses or the high net worth individuals.

“And ordinarily, they are supposed to pay the biggest share of the tax revenue. What is happening now is that the lower-end people are carrying more of the burden, which is unfair. Everybody has to carry their fair share according to their level of income. That is how progressive taxes work all over the world.

“Remember that tax is one of the instruments the government uses to redistribute income; to take from the rich to support the poor. That is very fundamental. Not only do we recover money from the people, it (VAIDS) is meant to ensure that people pay the right taxes going forward.”

She added, “The firms that we are using to trace assets internationally are working alongside the projects that we have locally.

“And that project puts together records of property ownership, foreign exchange allocations, company ownership from the Corporate Affairs Commission, and even private jet registration so that we can build profiles of people so that we have an idea of how much tax should this person be paying according to his or her lifestyle.

“And then we compare it with how much tax they are actually paying, and that is giving us a lot of information that hopefully will encourage people to come forward to do the right thing.”

According to the minister, the Federal Government is looking at realising about $1bn from the VAIDS.

Speaking earlier at an interactive session for executives and business owners on the VAIDS hosted by PwC Nigeria, Adeosun said while most developing countries had tax to Gross Domestic Product ratios above 20 per cent, Nigeria had a low of six per cent.

In a bid to address this anomaly, she said the Federal Ministry of Finance had set up the VAIDS in collaboration with all 36 states of the federation.

Specifically, it is expected to increase Nigeria’s tax to GDP ratio from the current six per cent to between 10 per cent and 15 per cent, broaden the national tax base, curb tax evasion and discourage illicit financial flows.

The Executive Chairman, the Lagos Inland Revenue Service, Mr. Ayo Subair said, “We have seen the positive impact taxpayers’ money can make at the state level in terms of social services, administration of government and infrastructure development.”

According to the Head of Tax, PwC Nigeria, Mr. Taiwo Oyedele, paying taxes is not particularly easy anywhere in the world for anyone who has expended time, energy and other resources to earn the income.

However, he said, “It is necessary for there to be an organised society for the benefit of all. We organised this session to discuss the background, design and structure of the VAIDS, key objectives, legal framework and the step-by-step process for declaration, remediation and resolution.”

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

Economy

NNPC To Resume Oil Exploration In Sokoto Basin

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The Nigerian National Petroleum Corporation on Thursday announced plans to resume active oil exploration in Sokoto Basin.

A statement issued in Abuja on Thursday by NNPC spokesperson, Kennie Obateru, said the corporation’s Group Managing Director, Mele Kyari, said exploration for crude would resume in the Sokoto Basin.

The statement read in part, “Kyari also hinted of plans for the corporation to resume active exploration activities in the Sokoto Basin.”

The NNPC boss disclosed this while receiving the Governor of Kebbi State, Atiku Bagudu, who paid Kyari a courtesy visit in his office on Thursday.

In October 2019, the President, Major General Muhammadu Buhari (retd.), had during the spud-in ceremony of Kolmani River II Well on the Upper Benue Trough, Gongola Basin, in the North-East, said the government would explore for oil and gas in the frontier basins across the country.

He outlined the basins to include the Benue Trough, Chad Basin, Sokoto and Bida Basins.

Buhari had also stated that attention would be given to the Dahomey and Anambra Basins which had already witnessed oil and gas discoveries.

Kyari restated NNPC’s commitment to the partnership with Kebbi State for the production of biofuels, describing the project as viable and in tandem with the global transition to renewable energy.

He said the rice production programme in the state was a definite boost to the biofuels project.

Kyari said the linkage of the agricultural sector with the energy sector would facilitate economic growth and bring prosperity to the citizens.

He was quoted as saying, “We will go ahead and renew the Memorandum of Understanding and bring in any necessary amendment that is required to make this business run faster.”

The Kebbi State governor expressed appreciation to the NNPC for its cooperation on the biofuel project.

Bagudu said the cassava programme was well on course but the same could not be said of the sugarcane programme as the targeted milestone was yet to be attained.

Kebbi state is one of the states that the NNPC is in partnership with for the development of renewable energy.

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Economy

Nigeria To Benefit As G-20 Approves Extension Of Debt Relief Till December

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Finance ministers of G-20 countries have approved an extension of debt relief for the world’s poorest nations till December 2021.

David Malpass, World Bank president, made the announcement at the virtual spring meeting, on Wednesday.

TheCable had earlier reported that the G-20 countries will meet this week to consider an extension of the debt freeze.

The G-20, is a group of finance ministers and central bank governors from 19 of the world’s largest economies, including those of many developing nations, along with the European Union.

G-20 countries had established a debt service suspension initiative (DSSI) which took effect in May 2020.

Nigeria had benefited from the initiative which delivered about $5 billion in relief to more than 40 eligible countries.

The suspension period which was originally set to end on December 31, 2020 was extended to June 2021.

Malpass said the extension to December 2021 will boost economic recovery and promote job creation in low income countries.

He urged countries to be transparent in their approach to the debt service payment extension.

“On debt, we welcome a decision by the G20 to extend the DSSI through 2021. The World Bank is also working closely with the IMF to support the implementation of the G20 Common Framework,” he said.

“In both these debt efforts, greater transparency is an important element: I urge all G20 countries to disclose the terms of their financing contracts, including rescheduling, and to support the World Bank’s efforts to reconcile borrower’s debt data more fully with that of creditors.

“Participation by commercial creditors and fuller participation by official bilateral creditors will be vital. I urge all G20 countries to instruct and create incentives for all their public bilateral creditors to participate in debt relief efforts, including national policy banks. I also urge G20 countries to act decisively to incentivize the private creditors under their jurisdiction to participate fully in sovereign debt relief efforts for low-income countries.

“Debt relief efforts are providing some welcome fiscal space, but IDA countries need major new resources too, including grants and highly concessional resources. From April to December 2020, the first DSSI period, our net transfers to IDA and LDC countries were close to $17 billion, of which $5.8 billion were on grant terms.

“Our new commitments were almost $30 billion, making IDA19 the single largest source of concessional resources for the poorest countries and the key multilateral platform for support. To recover from COVID, much more is needed, and we welcome the G20’s support for advancing IDA20 by one year.”

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Economy

IMF / Fiscal Monitor Report April 2021 Forecast

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Unprecedented fiscal support by governments during the pandemic has prevented more severe economic contractions and larger job losses, but risks remain of long-term scarring the International Monetary Fund says in its Fiscal Monitor report released on Wednesday (April 7) in Washington, DC.

Meanwhile, such support, along with drops in revenues, has raised government deficits and debt to unprecedented levels across all country income groups, said Vitor Gaspar, Director of the Fiscal Affairs Department at the IMF.

The first lesson one year into COVID-19 is that fiscal policy can act timely and decisively. The fiscal policy response was unprecedented in speed and size looking across countries. We also learned that countries with easier access to finance or stronger buffers were able to give more fiscal support. They’re also projected to recover faster,” said Gaspar.

Average overall deficits as a share of GDP in 2020 reached 11.7 percent for advanced economies, 9.8 percent for emerging market economies, and 5.5 percent for low-income developing countries. Countries’ ability to scale up spending has diverged.

“So, what have we learned? We’ve learned that fiscal policy is powerful and that sound public finances are crucial in order to enable that power to be used to the fullest,” stressed Gaspar.

Gaspar urged policy makers to balance the risks from large and growing public and private debt with the risks from premature withdrawal of fiscal support, which could slow the recovery.

“In the spring 2021, we emphasize differentiation across countries. Moreover, COVID-19 is fast evolving, as are the consequences from COVID-19. The fiscal policy must stay agile and flexible to respond to this fast-evolving situation.” Said Gaspar.

He also warned that the targeting of measures must be improved and tailored to countries’ administrative capacity so that fiscal support can be maintained for the duration of the crisis—considering an uncertain and uneven recovery

“Moreover, countries are very different in their structures, in their institutions, in their financial capacity and much else. Therefore, policies and policy advice have to be tailored to fit.” Said Gaspar

Gaspar concluded his remarks by emphasizing that global vaccination is urgently needed, and that global inoculation would pay for itself with stronger employment and economic activity, leading to increased tax revenues and sizable savings in fiscal support.

“A fair shot, a vaccination for everybody in the world may well be the highest return global investment ever. But the Fiscal Monitor also emphasizes the importance of giving a fair shot at life success for everyone. It documents that preexisting inequalities made COVID-19 worse and that COVID-19 in turn made inequalities worse. There is here a vicious cycle that threatens trust and social cohesion. Therefore, we recommend stronger redistributive policies and universal access to basic public services like health, education, and social security,” said Gaspar.

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