Economy

Petrol Import Loss Hits N1.4tr

Published

7 years ago

April 6, 2018

Petrol Import Loss Hits N1.4tr

Nigeria records about N1.4 trillion yearly as under-recovery from its importation and sale of Premium Motor Spirit at N145 per litre, Petroleum Resources Minister Ibe Kachikwu said yesterday.

He spoke at a meeting in Abuja where stakeholders in the Liquefied Petroleum Gas (LPG) sector met to review the challenges of the LPG market.

Kachikwu explained that it was time Nigeria began to look at alternative fuel sources, such as LPG, which are clean and less expensive.

He said President Muhammadu Buhari would in the next two months launch an infrastructure rebirth plan with which the country would leverage to attract private finance to upgrade her oil and gas infrastructure.

Said the minister: “Clean energy is very essential and we need to move away from complete utilisation in our transport sector of only PMS which is creating a lot of under-recovery of N1.4 trillion per annum of exposure to the government.

“At the end of the day, we begin to go into other components of cleaner fuels and rely less on the PMS that is gotten from out of the country.”

Asked to clarify if the figure on petrol under-recovery was annually and how the government felt about it, Kachikwu replied: “Yes, currently. That is being addressed at a very high level and I don’t want to go into that.”

In March, the Nigerian National Petroleum Corporation (NNPC) disclosed that its expenditure on petrol subsidy was N774 million daily, and that 50 million litres was consumed across the country everyday.

NNPC’s Group Managing Director Dr. Maikanti Baru described the amount as “under-recovery”, adding that the huge fund was due to the proliferation of filling stations in communities with international land and coastal borders across the country.

Kachikwu also indicated that the government would launch an infrastructure rebirth plan for the oil and gas industry. The rebirth plan he noted, will enable private investors put in money in key infrastructure assets across the entire value chain of the sector.

“I think government is focused in all the areas. We are hoping to launch an infrastructure rebirth map for the oil sector over the next two months, and I hope His Excellency, the President will launch that.

“The effect is that it will be to open up tariff and create policy positions that will enable people to actually go in and invest in critical infrastructure that is needed because anywhere you go, whether it is distribution of petroleum products massively through trucks and rather than through pipelines, whether it is being able to take crude into refineries or distribute gas throughout the country, infrastructure is so key.

“There are lots of stranded gas and power everywhere. Distribution is key; infrastructure is key. We need to find a way of finding enough incentives to enable the private sector go in very bullishly and put the money where it is supposed to be,” he explained.

On the significance of the LPG meeting, Kachikwu said: “Coming from this meetings we are having, we will come up with recommendations of what DPR needs to do to deepen licensing issues and enforcement issues, but over and above just going after individuals who have done it wrongly; what are the incentives, schemes and structures we need to put in place, and it just goes to tell u where the storage capacities for the gas we have been buying; where are the official distribution and sales centers? If we deepen the regulation, deepen the licensing and enforcement, we should be able to get there.”

He noted: “But, like you know, we already have a gas policy which was approved at FEC and all of this is in there. What this group is going to do is to take a piece of that as it concerns LPG and say how we can take that policy document and expand and activate the whole LPG.”

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Samed Olukoya

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

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Economy

House of Reps Warns Tinubu Against Multiple Tax Burdens on Nigerians

Published

1 day ago

October 12, 2024

Bassey Marshall

Company Income Tax (CIT) - Investors King

The House of Representatives has warned President Bola Tinubu against imposing multiple taxes, levies, and charges on Nigerians already struggling with subsidy removal and higher electricity bills.

During Thursday’s plenary session, the member representing Anambra East/Anambra West Federal Constituency, Mr. Peter Aniekwe, called for the adoption of a motion on urgent public importance.

Investors King reported that the motion was co-sponsored by the House Minority Leader, Rep. Kingsley Chinda, and four others.

In defense of the motion, Aniekwe noted that the government’s introduction of additional taxes, which he described as sometimes unnecessary, only adds an undue burden on Nigerians.

He emphasized the need for the government to strike a balance when imposing taxes that are essential for revenue generation.

Aniekwe said, “The imposition of multiple taxes, levies, and charges at various levels of government only serves to exacerbate the financial strain on citizens, particularly those in low-income brackets, many of whom are already struggling to meet basic needs such as food, healthcare, housing, and education.

“The introduction of additional and sometimes unnecessary taxes, including consumption taxes, service taxes, and levies on essential goods and services, places an undue burden on the masses, further widening the inequality gap.

“While taxation is necessary for government revenue, a balance must be struck between revenue generation and the economic well-being of citizens, particularly at a time when many families and businesses are still recovering from the economic impact of global and local challenges.

“The government’s primary responsibility is to alleviate the economic challenges faced by the masses, ensuring policies that promote economic development, social welfare, and prosperity for all citizens.”

After Aniekwe’s defense, the House of Representatives adopted the motion.

The House cautioned the Federal Government against multiple taxation and mandated the committees on Finance and FIRS to, within three weeks, conduct a thorough review of existing tax laws and policies to streamline tax collection processes and eliminate redundant or overlapping taxes.

The committee was also tasked with identifying areas of double taxation at all levels for necessary action.

Economy

Boosting Nigeria’s Digital Future: STEM Education and AI Could Add $15 Billion to Economy by 2030

Published

1 week ago

October 4, 2024

Ugwoke Ogbodo

If Nigeria can enhance its Science, Technology, Engineering, and Math (STEM) education and prepare its workforce for future opportunities in the digital space, the economy could expand by an additional $15 billion, a new report has revealed.

The report, issued by consultancy Public First on Thursday, also indicated that Nigeria reaped an estimated $1.8 billion in economic benefits from Google’s tools and services in 2023.

Presenting the report in Lagos State, the Nigeria Digital Opportunity study highlighted the financial value contributed to the nation’s economy through services such as Google Search, Ads, Google Play, YouTube, and Google Cloud.

These services have played a significant role in boosting the productivity of Nigerian businesses, content creators, and workers.

It is no secret that a large number of young Nigerians have become tech-savvy, with many venturing into the thriving world of technology and content creation on social media platforms.

According to Google, its digital skills programs and career certificates are key drivers of Nigeria’s digital transformation, with over 1.5 million young Nigerians acquiring new digital skills in 2023.

Google’s Director for West Africa, Olumide Balogun, expressed the company’s satisfaction with the positive impact that digital technology is having on Nigeria’s economy.

He emphasized that the findings highlight the importance of continued investment in digital skills and infrastructure to unlock the full potential of Nigeria’s growing digital economy.

Balogun noted that with rapid digital advancements, particularly in areas such as cloud computing, connectivity, and artificial intelligence (AI), Nigeria is well-positioned to solidify its standing as a leading digital economy in Africa.

He advised the country to strengthen its technology policies, stating that Nigeria’s economic future will largely depend on its ability to harness technology. Balogun added that Google remains committed to supporting Nigeria’s journey through strategic investments and partnerships.

The report underscored the significant role digital technology plays in Nigeria’s economy, with Balogun noting that for every $1 invested in digital technology, the country generates over $8 in economic value.

Meanwhile, Google has called on Nigerian policymakers to prioritize STEM education to maximize the economic benefits of technology.

The report also projected that AI could contribute $15 billion to Nigeria’s economy by 2030.

Balogun highlighted Google’s efforts in promoting responsible AI development, noting that in 2021, the company committed $1 billion to support Africa’s digital economy.

He added that this initiative included the 2022 landing of the Equiano fiber-optic cable in Nigeria, which is expected to boost internet penetration by seven percent by 2025, significantly enhancing internet access and reliability.

Google also recommended that Nigerian policymakers adopt cloud-first strategies and strengthen the country’s digital infrastructure to harness the full potential of AI, while emphasizing the need for improved STEM education to prepare the workforce for future opportunities.

Amy Price, Director and Head of Technology Policy at Public First, praised Nigeria as a digital leader in Africa. She emphasized that tech investment will serve as a catalyst for further growth and development across the nation.

Price further highlighted the critical role AI will play in shaping Nigeria’s future economy, with the report estimating that AI could add $15 billion to the country’s GDP by 2030. She stressed that the nation must focus on building strong digital infrastructure and investing in STEM education to prepare its workforce for the jobs of tomorrow.

Economy

Lawmakers to Deliberate on Nigerian Tax Reform Bills, Change of FIRS to NIRS

Published

1 week ago

October 4, 2024

Iyanuoluwa Martins

The National Assembly is set to begin deliberations after receiving President Bola Tinubu’s communication seeking consideration and passage of the proposed Fiscal Policy and Tax Reform Bill to align with ongoing financial reforms of the Federal Government and enhance efficiency in tax compliance.

In addition to the Senate, the House of Representatives received four bills forwarded by the President. They include the Nigeria Tax Bill, the Nigeria Tax Administration Bill, the Nigeria Revenue Establishment Bill and the Joint Revenue Board Establishment Bill.

The Nigeria Revenue Service (Establishment) Bill seeks to repeal the Federal Inland Revenue Service (Establishment) Act, No. 13, 2007, and establishes the Nigeria Revenue Service, to assess, collect, and account for revenue accruable to the government of the federation.

The Transmission of Fiscal Policy and Tax Reform Bills to the National Assembly is The Nigeria Tax Bill, which seeks to provide a consolidated fiscal framework for taxation in Nigeria.

The Nigeria Tax Administration Bill seeks to provide a clear and concise legal framework for the fair, consistent and efficient administration of all the tax laws to facilitate ease of tax compliance, reduce tax disputes and optimize revenue.

Meanwhile, the Joint Revenue Board (Establishment) Bill aims to establish the Joint Revenue Board, the Tax Appeal Tribunal and the Office of the Tax Ombudsman for the harmonization, coordination and settlement of disputes arising from revenue administration in Nigeria.

This comes after President Tinubu during his speech on Nigeria’s 64th Independence Anniversary on Tuesday (October 1) said some Economic Stabilisation Bills would be transmitted to the National Assembly.

“We are moving ahead with our fiscal policy reforms. To stimulate our productive capacity and create more jobs and prosperity, the Federal Executive Council approved the Economic Stabilisation Bills, which will now be transmitted to the National Assembly.

“These transformative bills will make our business environment more friendly, stimulate investment and reduce the tax burden on businesses and workers once they are passed into law,” he said.

Recently, the Chairman of the Presidential Taskforce on Fiscal Policy and Tax Reforms Committee, Mr Taiwo Oyedele, said the Withholding Tax Regulations 2024 has been gazetted.

“I do have some good news, the good news is that the withholding tax regulation has now been gazetted. So, the only reason it hasn’t been published today is because it is public holiday, so first thing tomorrow you will see a copy of the gazette and that provides a lot of relief not just for manufacturers but also every other business in terms of taking away some of the burdens of funding their working capital,” Mr Oyedele said.

Nigeria has been seeking to harmonise its tax base as it has a tax-to-gross domestic product (GDP) ratio of 10.8 percent; comparatively, the average tax-to-GDP ratio for Africa is about 18 percent.