Connect with us

Economy

55% of VAT Revenue Generated From Lagos –Adeosun

Published

on

minister-of-finance-kemi-adeosun
  • 55% of VAT Revenue Generated From Lagos

The Minister of Finance, Mrs. Kemi Adeosun, on Tuesday said that 55 per cent of the revenue generated by the Federal Government from Value Added Tax receipts was being collected from Lagos State.

Adeosun, according to an online publication, TheCable, said this during a meeting with members of the Progressive Governors’ Forum in Birnin Kebbi.

She explained that the balance of 45 per cent was being generated from the remaining 35 states of the federation and the Federal Capital Territory.

Giving a breakdown of the receipts from VAT, the minister said while Lagos accounted for 55 per cent, 20 per cent was coming from the FCT.

She added that Rivers, Kano and Kaduna states accounted for six per cent, five per cent and one per cent, respectively.

In February this year, based on analysis of FAAC allocations, Lagos State received the sum of N6.14bn from VAT revenue, while Kano, Kaduna and Rivers got N1.66bn, N4.23bn and N1.33bn, respectively.

For the month of April, Lagos State received the sum of N7.04bn from VAT revenue, while Kano, Kaduna and Rivers got N1.84bn, N1.19bn and N1.78bn, respectively.

Cumulatively, Adeosun noted that the four states and the FCT accounted for 87 per cent of the entire VAT collections.

She described the tax compliance rate in the country as very low, adding that this was why the Federal Government was taking proactive steps to improve the rate of voluntary compliance.

She said, “There is no poor country that has a high tax compliance rate, and no rich country that has a low one. Fifty-five per cent of Nigeria’s VAT is collected in Lagos State; 20 per cent in the FCT; six per cent in Rivers; five per cent in Kano; and one per cent in Kaduna.

“I’m hoping that one day, the finance commissioners (of the states) will stop needing to come to Abuja monthly to share FAAC (Federation Account Allocation Committee’s monthly sharing of federally collected revenue) because IGR will be sufficient.”

Based on allocation from FAAC, the Federal Government gets 15 per cent of VAT revenue, while the states and local governments get 50 per cent and 35 per cent, respectively.

According to the National Bureau of Statistics, the sum of N204.77bn was generated as VAT in the first quarter of 2017 as against N207.35bn generated in the fourth quarter of 2016.

Out of the total VAT generated in the first quarter of this year, N126.64bn was received as non-import VAT locally, while N31.72bn was generated as non-import foreign VAT.

The balance of N46.41bn was generated as Nigeria Customs Service import VAT.

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.

Continue Reading
Comments

Economy

AfCFTA: Nigeria-South Africa Chamber Advocate Single Africa Passport, Free Visa

Published

on

African Continental Free Trade Area (AfCFTA)- Investors King

The Nigeria-South Africa Chamber of Commerce (NSACC) has called for a single Africa passport and a free visa to ensure the success of the Africa Continental Free Trade Area (AfCFTA) agreement.

Speaking on Thursday in Lagos during the chamber’s September Breakfast Forum, with the theme: `Perspectives on the Africa Continental Free Trade Area in Relation to Nigeria’, its President, Mr. Osayande Giwa-Osagie noted that AfCFTA would boost intra-African trade by 22 percent, adding that its implementation would impact positively on the Nigerian economy.

AfCFTA is a single continental market that adopts free flow of goods, services, and capital, supported by the free movement of persons across Africa.

Giwa-Osagie however said Nigeria must diversify its economy in order to harness the gains of the agreement.

“Current intra-African trade rated at 15 to 17 percent is low and the AfCFTA is expected to boost intra-African by 22 percent. Challenges to its implementation are lack of infrastructure, political instability and lack of economic diversification.

“This gives rise to the need for Nigeria to diversify its economy to harness the gains of the agreement. Given the importance of the free movement of people, there is a need for a free visa for Africa and a single Africa passport.

“While the implementation would help boost the Nigerian economy, the impact would be limited if there are no free movement of people,” he said.

Mr Jesuseun Fatoyinbo, Head, Trade and Transactional Services, Stanbic IBTC Bank, said the business community needed more clarification on tariff reduction or elimination under the agreement.

According to him, the little information available to corporate organisations with regards to tariffs may lead to holding back on investments.

“We have noted increased interests from global multinationals and other corporates in setting up facilities in Africa aimed at serving the continent and exporting abroad.

“So more transparency around tariff reductions both in terms of timelines and details of goods could prompt companies to act,” he said.

Fatoyinbo also called for more attention to the digitisation of trade processes across the continent. “Currently, trade in Africa is largely reliant on physical documentation and this is a major impediment. Policymakers need to prioritize regulatory amendments that allow for the digital signatures, a digital certificate of origin, digital bills of lading, and other documentation,” he added.

Continue Reading

Economy

Nigeria Borrows $4 Billion Through Eurobonds as Order Book Peaked at $12.2 Billion

Published

on

Eurobonds - Investorsking

The Federal Government of Nigeria has raised a fresh $4 billion through Eurobonds, according to the latest statement from the Debt Management Office (DMO).

Nigeria had set out to raise $3 billion but investors oversubscription peaked at $12.2 billion, enabling the Federal Government to raise $1 billion more than the $3 billion it announced.

DMO said “This exceptional performance has been described as, “one of the biggest financial trades to come out of Africa in 2021” and “an excellent outcome”.

Bids were received from investors in Europe, America, Asia and several local investors. The statement noted that the quality of investors and the size of the Order Book demonstrated confidence in Nigeria.

The Eurobonds were issued in three tranches, details, namely seven years–,$1.25 billion at 6.125 per cent per annum; 12 years -$1.5 billion at 7.375 per cent per annum as well as 30 years -$1.25 billion at 8.25 per annum.

The DMO explained that the long tenors of the Eurobonds and the spread across different maturities are well aligned with Nigeria’s Debt Management Strategy, 2020 –2023.

The Eurobonds were issued as part of the New External Borrowing stipulated in the 2021 Appropriation Act. DMO noted that the $4 billion will help finance projects state in the 2021 budget.

Nigeria’s total debt stood at $87.239 billion as at March 31, 2021. However, with the $4 billion new borrowing, the nation’s debt is now $91.239 billion. A serious concern for most Nigerians given the nation’s weak foreign revenue generation and rising cost of servicing the debt.

Continue Reading

Economy

CIBN Banking and Finance Conference 2021: Structural Transformation and Growth

Published

on

Coronation Merchant Bank - Investors King

Today we highlight one of the sessions, ‘Economic Recovery’, at the recently concluded CIBN Banking and Finance conference. This was a hybrid event in Abuja, Lagos and partially virtual last week. The Covid-19 disruptions have created demand and supply shocks in the global system while unlocking new opportunities for growth.

Given the pre-existing financing challenges and growing spending needs, many developing countries are in dire need of financial support. As a result of the pandemic, the financing gap for the sustainable development goals increased by 70% (over USD4.2bn). The speaker on this session, Amina J. Mohammed, Deputy SecretaryGeneral of the United Nations and Chair of the United Nations Sustainable Development Group focused on structural transformation, technology, finance and sustainability.

Recent developments such as the allocation of the USD650bn in Special Drawing Rights (SDR) were highlighted during the session. Although the SDR offers improved liquidity into the system, Africa is set to receive only USD32.2bn (or 6.4% of the total amount). Therefore, it is important that the funds are channeled towards well-targeted sectors that can contribute to sustainable development.

The banking and finance sector plays a crucial role. The Africa Continental Free Trade Area (AFCFTA) agreement offers an opportunity for the financial sector to work within a continental market of 1.2 billion people. According to Amina J. Mohammed, three main actions areas will reshape the financial sector and support stronger recovery.

The first, better customer engagement with a dynamic range of relevant products and services that go beyond bank-based financing mechanisms and offer innovative financial products tailored to specific needs of business ecosystems. Second, the adoption of new operating models to drive efficiency and inclusion. Third, a deliberate focus on enabling sustainable development investing.

Furthermore, Nigeria’s banking and finance industry is well positioned to drive specific UN sustainable development goals such as inclusive and affordable credit, especially for micro, small and medium-sized enterprises. The industry can also provide support towards climate change.

Technology also featured in the discussion points. Undoubtedly, technology is a catalyst for growth across economies and the pandemic has further exposed the deficit within the sector across developing countries. Investments in digital infrastructure need to be rapidly expanded and scaled up to boost socio-economic development.

The speaker commended the FGN’s efforts on its push towards sustainable economic recovery. Some policy and regulatory reforms highlighted include, regulation of fintechs and related services to strengthen payment systems and regulate data protection; the green bonds which Nigeria first issued in 2017 in support of green projects, including solar energy and the modernisation of the Nigerian stock exchange that has given rise to a new operational structure and leadership.

These are laudable steps. However, we note that there is still room for improvement. To achieve double-digit GDP growth and sustainable development, structural transformation should remain on the FGN’s priority list.

Continue Reading




Advertisement
Advertisement
Advertisement

Trending