Connect with us

Finance

We’re Profiling Rich Nigerians for Tax Payment – Adeosun

Published

on

minister-of-finance-kemi-adeosun
  • We’re Profiling Rich Nigerians for Tax Payment

The Minister of Finance, Mrs. Kemi Adeosun, on Thursday said that the Federal Government was currently profiling high net worth individuals to ensure that what they currently own as assets correspond with the amount they were paying as taxes.

She said this via a video posted on her Facebook page where she responded to questions from Nigerians about the implementation of the Voluntary Asset and Income Declaration Scheme.

The VAIDS offers a grace period from July 1, 2017 to March 31, 2018, for tax defaulters to voluntarily pay back to the government what they owed.

In exchange for full and honest declaration, the government promises to waive penalties that should have been levied and also waive the interest that should have been paid on overdue taxes.

In addition, those who declare their tax obligation honestly will not be subjected to any investigation or tax audit after the nine-month grace period.

The minister said Nigeria had one of the lowest tax compliance rates in the world with a tax to Gross Domestic Product ratio currently standing at six per cent.

She stated that with such a low tax-to-GDP ratio, the government needed to do all it could to shore up the tax revenue.

Adeosun explained that in the last 15 months, the Ministry of Finance had been building a database of high net worth individuals through information received from both local and international sources.

For instance, she explained that while the assets of some of the high net worth individuals had been obtained by the ministry through local sources, their assets owned abroad were obtained from the Panama Papers as well as other information supplied by countries, which Nigeria had tax treaties with.

The minister said a situation whereby policemen and other low income earners were paying taxes through deductions from their salaries, while high net worth individuals who should pay more, were evading payment was unacceptable to the government.

She added that the ministry would use technology to improve the rate of tax compliance.

Adeosun stated, “We only have 14 million taxpayers out of the 70 million active people. We are sharing tax information with other countries and this will help us draw a picture of taxpayers and their lifestyles.

“We are profiling high net worth individuals to enable us determine if what they pay as tax corresponds with their lifestyles. For 15 months, we have been doing that at the Ministry of Finance, and we are looking at their assets not only in Nigeria, but abroad.”

She explained that the Federal Government would implement its policy on luxury taxes.

The minister added, “We signed something yesterday (Wednesday) on luxury goods like champagne, brandy, whiskey, wines, and high-end jewellery. We’ve signed something that will bill access charge on first class and business class tickets; we are just doing the final parts of the implementation and we also want to try and amend the taxpayer book on high-end luxury cars.

“If we move our tax-to-GDP ratio up, it means we will be able to provide more services to our people. Many of the things we are not able to do are functions of the fact that we don’t have enough money.”

She explained that for the country to be called a rich nation, the citizens must be ready to pay the right amount of taxes to enable the government build roads, schools and other infrastructure.

Adesoun added, “We need to build more schools; we need to build more hospitals; we need to build more roads. This is not rocket science. Every country has challenges; there is nothing we are facing that other countries haven’t faced. Every poor nation has a very poor tax compliance rate, and every rich nation has a high compliance rate. So, we want to be a prosperous nation.

“So, what is in it for the citizens? If everybody pays, there will be far more money in the pool to be spent on the services that we need.

“These things are what we call public goods, and they are funded from taxes. If you have been all around the country, you’ve seen the need, you’ve seen the number of people that are living in poverty; we can lift people from poverty if we have the right money.”

She expressed satisfaction with the rate of response from Nigerians on the VAIDS scheme, adding that many companies are now willing to take advantage of the nine months amnesty period.

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

Banking Sector

FCMB Group Posts 22.1 Percent Decline in Profit in H1 2021

Published

on

FCMB - Investors King

FCMB Group Plc, a leading financial institution in Nigeria, recorded a 22.1 percent decline in profit after tax in the first half (H1) of 2021 despite zero COVID-19 restrictions.

The lender gross earnings dipped by 4.02 percent from N98.179 billion achieved in the first half of 2020 to N94.228 billion in the period under review, the bank disclosed in its unaudited financial statements seen by Investors King.

Net interest income also moderated by 5.25 percent from N45.379 billion reported in H1 2020 to N42.998 billion in H1 2021. While net fee and commission income increased to N12.934 billion in the period under review, representing an increase of 33.51 percent from N9.688 billion achieved in the same period of 2020.

Net trading income drop from N3.925 billion in H1 2020 to N2.639 billion in H1 2021, this represents a decline of 32.78 percent.

Other revenue sheds 39.7 percent from N7.555 billion in H1 2020 to N4.552 billion in H1 2021. Profit before minimum tax and income tax decreased by 24.2 percent to N8.911 billion in H1 2021, down from N11.071 billion recorded in H1 2020.

The bank paid N450 million as minimum tax and income tax of N903.797 million to push profit after tax down by 22.1 percent from N9.701 billion in H1 2020 to N7.557 billion in H1 2021.

The lender realised N974.744 million from foreign currency translation differences for foreign operations. This brings the total comprehensive income for the period N8.545 billion.

Earnings per share dipped from N0.49 H1 2020 to N0.38 in H1 2021.

Continue Reading

Banking Sector

Ecobank Grows Profit After Tax by 29 Percent to N62.6 Billion in H1 2021

Published

on

Ecobank - Investors King

Ecobank Transnational Incorporated, a leading lender in Nigeria and across Africa, grew gross earnings by 13 percent to N442.9 billion in the first six months ended June 30, 2021.

The bank disclosed in its unaudited financial statements released through the Nigerian Exchange Limited and seen by Investors King on Monday.

Revenue expanded by 15 percent to N334.9 billion in the period under review while operating profit before impairment charges rose by 33 percent to N138.3 billion.

The bank grew profit before tax to N85.3 billion in the first half of 2021, up by 33 percent when compared to N64.133 billion recorded in the same period of 2020.

Profit after tax increased by 29 percent to N62.6 billion, up from N48.535 billion recorded in the corresponding period of 2020. Total assets expanded by 6 percent to N11.022 trillion with loans and advances rising by 7 percent to N7.861 trillion.

However, total equity was down by 1 percent to N803.2 billion.

Speaking on the bank’s performance, Ade Ayeyemi, Ecobank Group CEO, said: “We saw continued and sustained resilience in our performance, which is indicative of the success of our ‘execution momentum’ drive. As a result, we generated a return on tangible equity of 16.1% versus 15.2% a year ago and increased diluted EPS and tangible book value per share by 19% and 6%, respectively. In addition, profit before tax increased 23% to $210 million.”

“Group revenues rose 7% to $825 million, despite the challenging operating environment with the third wave of coronavirus infections threatening economic recovery. Our diversified pan-African business model continued to rise to the challenge. Revenues grew 13% and 6% in our Commercial and Consumer businesses, while our focus on growing the trade business led to increased trade assets.

The slowly increasing business and spend activity drove a 20% rise in our Payments business’s revenue to $90 million. Deposits growth was strong, with total deposits now over $19 billion, an increase of $1.0 billion in the second quarter and $2.4 billion in a year, driven by our omnichannel strategy. Though loan growth remained
flat, we are focused on providing support to MSMEs for growth,” Ayeyemi added.

“I am proud of the team’s hard work in driving efficiency, which continues to reflect in our cost-to-income ratio of 58.7% ahead of guidance and progressing well toward our medium-term goal of approximately 55%. In addition, credit quality continued to be exceptionally strong. As a result, our NPL ratio of 7.4% is a substantial improvement from the prior year’s 9.8%, as we also build reserves to insulate the balance sheet with an NPL coverage ratio of 86.7% and pushing towards our nearterm target of 90%,” Ayeyemi continued.

“We successfully raised $350 million Tier 2 Sustainability Notes in June, the first-ever by a financial institution in sub-Saharan Africa and first to have a Basel III-compliant 10-year non-call 5 structure outside South Africa in 144A/RegS format. The Bond was 3.6 times oversubscribed, demonstrating strong confidence in the Ecobank Group and our commitment to the sustainability of our communities and their social needs. I am deeply grateful to all stakeholders and must thank our clients for continuing to put their trust in Ecobank for their diverse banking needs.” Ayeyemi concluded.

Continue Reading

Finance

Africa Prudential Posts 24 Percent Decline in Profit for H1 2021

Published

on

African Prudential - Investors King

African Prudential Plc, a digital technology business provider in Nigeria, has reported a 24 percent decline in profit after tax to N830 million in the period ended June 30, 2021.

The company stated in its unaudited financial statements released on Friday. Below is a year-on-year comparison between the first half of 2021 and the first half of 2020.

Income Statement:

• Revenue from contracts with customers: N0.52 Billion, compared to N0.59 Billion in HY 2020 (12% YoY Decline);
• Interest Income: N1.15 Billion, compared to N1.28 Billion in HY 2020 (10% YoY Decline);
• Gross Earnings: N1.67 Billion, compared to N1.87 Billion in HY 2020 (11% YoY Decline);
• Profit Before Tax: N0.97 Billion, compared to N1.22 Billion in HY 2020 (20% YoY Decline);
• Profit After Tax: N0.83 Billion, compared to N1.08 Billion in HY 2020 (24% YoY Decline);
• Earnings Per Share: 41kobo. (54kobo in HY 2020)

Balance Sheet:

• Total Assets: N88.87 Billion, compared to N17.73 Billion as at FY 2020 (401% YTD Increase);
• Total Liabilities: N80.71 Billion, compared to N9.36 Billion as at FY 2020 (762% YTD Increase);
• Shareholders’ Fund stood at N8.16 Billion, a 2% YTD decline from N8.37 Billion as at FY 2020.

Comparing HY 2021 to HY 2020, we observed the following key items worthy of note:

Revenue from contracts with customers: During the period under review, Revenue from contracts with customers contracted by 12% year-on-year on the back of a significant renegotiation of fees rate by customers along our corporate actions revenue lines as well as slow sign off of contracts within the period in digital consultancy. However, revenue from register maintenance increased by 8%.

Interest income: While the company was bullish with 436% increase in the interest realized from bonds and also a 193% increase in the interest realized from short term deposits, there was a slight 10% year-on-year decline in interest income owing to a 4% decline in interest on loans and advances and a nil income on T-Bills relative to HY 2020.

Profit After Tax: On account of the business considerations around revenue and operating cost, PAT dereased by 24% year-on-year. Comparing HY 2021 to FY 2020, the following were observed in the Balance Sheet:

Total Assets: In the second quarter of 2021, the total assets increased 401% on the back of 7336% surge in cash and cash equivalents as well as an 70% increase in trade and other receivables.

Total Liabilities: The company total liabilities increased by 762% Year-till-date driven by a 829% increase in customers’ deposits which accounted for about 99% of the company’s liabilities.

Shareholder’s Wealth: Due to slight drop in earnings, total equity marginally declined by 2% year-to-date.

Continue Reading




Advertisement
Advertisement
Advertisement

Trending