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FIRS: 114 Firms Feign Ignorance of Land Allocation

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  • FIRS: 114 Firms Feign Ignorance of Land Allocation

The Federal Inland Revenue Services (FIRS) said it has uncovered 114 companies feigning ignorance of lands allocated to them.

However, the FIRS has confirmed from the Abuja Geographical Information System (AGIS) that these lands were actually allocated to these companies. The Service has vowed to hand over the culprits to the Attorney General of the Federation for necessary action.

FIRS Executive Chairman, Tunde Fowler stated this at the African Union high level panel on illicit financial flows from Africa which held in Abuja yesterday.

He said: “114 Companies claimed they were unaware of land allocated to them, but AGIS has confirmed the ownership of all the cases referred to them and we will soon hand these cases over to the Attorney General on the way forward.”

Highlighting the benefits of curbing Illicit Financial Flows, Fowler said the “total tax debt recovered From January 2017 to 31st August 2018 was N3.631billion. Also, N1.9billion was realised from Nov 2016 – Dec 2017, while N1.731 was raked in from January 2018 – to date.

With regards to the Issuance of tax notification obligation to Company Income Tax (CIT), Non-Compliant Companies that own properties and Identified Non-Filers for Abuja, Fowler the Service has issued 2,672 Demand Notices and realised N2.983billion as total payments for Demand Notices for Abuja Properties

Fowler identified the Component of Illicit Financial Flows in Nigeria to include: Commercial Activities which are illegal flows from business that lead to hiding wealth, evading, or aggressively avoiding tax, and dodging Customs duties and Domestic Levie.

He said IFFs are often driven by criminal activities with the purpose of keeping the transactions from the purview of law enforcement agencies, or revenue authorities.

He said Corruption: Money acquired through bribery and abuse of office by public officials are enormous and can be used to further develop different projects and also increase taxation revenue collection.

He listed other IFF in Nigeria to include payments of expatriates staff emolument and remuneration, as well as failure to declare personal income tax emoluments to the relevant tax authorities in Nigeria.

Others are laundering of funds (often sourced illegally) through Real Estates transactions to acquire property in choice locations outside Nigeria; Illegal transfer of money out of Nigeria, via unapproved channels; Mispricing of goods and services transferred between interrelated Nigeria based companies and Individuals to offshore based entities and individuals; Profit Shifting – for instance through excessive interest payments on foreign and locally sourced loans and Mis-invoicing of imports and exports.

Earlier, former South African President and Chairman, United Nations Economic Commission for Africa’s High Level Panel on IFF, Thabo Mbeki, said that Africa looses about $80 billion annually through IFFs.

Mbeki, said the huge sums came from proceeds of commercial transactions through multinational companies, criminal activities and corruption.

He said illicit financial flow posed developmental challenges on the continent, in terms of draining hard currency reserve, reduced tax collection, deepening income gap, depleting investment and weakened governance.

He harped on the need to strengthen institutions like the Revenue Service Agencies, Customs Services and the legislation, to enable them tackle better, incidences of money laundering as well as other forms of IFFs.

Meanwhile the Minister of Finance, Mrs Zainab Ahmed said that IFFs have robbed Africa of the wealth and resources needed to invest in infrastructure, education, hospitals, electricity and many other necessities for sustainable and inclusive economic development.

The Minister who was represented by the Permanent Secretary, Ministry of Finance, Mahmoud Isa-Dutse, said: “The quest for Africa’s economic development will be accelerated if funds illegally acquired, stolen and hidden abroad by illicit finance flow perpetrators are repatriated.

“Our development will no doubt receive a leap if Multinational Corporations desist from illicit activities of aggressive transfer pricing, base erosion, profit shifting and trade mispricing.

“As indicated in the 2015 High Level Panel Report, the challenge of combatting IFFs is particularly pronounced in countries such as Nigeria, due to the dominance of the extractive industries in the economy, she said.

“In this regard, the work of the Nigeria Extractive Industries Transparency Initiative (NEITI), which I used to head, as well as the Federal Inland Revenue Service, whose operations the Ministry of Finance oversees, are relevant,” she said.

Ahmed also said that to address IFFs within the context of taxation, the FIRS, several years ago, introduced Transfer Pricing Regulations to curb the incidence of aggressive transfer pricing practices and enthrone the “Arms-length” Principle in the cross-border trade practices of multinational corporations, as well as indigenous firms.

In addition, she said that the Voluntary Asset and Income Declaration Scheme (VAIDS) initiative which ended in June 2018, was a tax amnesty programme aimed at raising tax revenues, regularising the tax status of citizens and bringing concealed tax assets into the national tax base.

“Furthermore, the Federal Government is collaborating with several countries in terms of sharing information on Nigerians who own properties and bank accounts abroad.

“We also run a programme for the Automatic Exchange of Tax Information with the United Kingdom.

“In addition, we have signed agreements on the Multilateral Competent Authority on the Common Reporting Standard which is a platform for exchange of financial accounts information.

“This will come into effect as soon as the legal framework is finalised,” she said.

Ahmed also informed the panel that in July 2018, President Muhammadu Buhari signed the Nigeria Financial Intelligence Unit (NFIU) Bill into law.

She said that the NFIU would ensure autonomous and independent agency monitoring of cross-border financial flows with a view to identifying and intercepting suspicious transfers.

The Unit is also empowered to fight the funding of criminal activities, money laundering and terrorism through the international and domestic financial system.

“To aid us in our efforts, it will be appreciated if the HLP will share its experiences in domesticating international best practices in the key sectors of our economy with respect to IFFs.

“In this regard, Nigeria stands to gain much from initiatives such as the European Union’s country-by-country reporting (CbCR) transparency measures. By requiring companies that are of a particular size or operate in certain industries to publish operational and tax data for each country in which they do business.

“Governments such as ours would be better equipped to check the incidence of aggressive tax-planning strategies, adopt more targeted and risk-based tax audits, and persuade large multinational corporations to voluntarily reduce the magnitude of their tax avoidance,” she said.

Also, the Minister of Justice, Mr Abubakar Malami said that Nigeria had put in place institutions, legislations and technology expertise to minimise IFFs in the country.

“We established the EFCC, ICPC, Code of Conduct Bureau, Code of Conduct Tribunal and the Financial Intelligence Unit, and backed them with laws, to ensure that Nigeria wins the fight against corruption and IFFs.

“We have also deployed technology in this fight. For example, we have deployed BVN in the banking sector, to identify the real owners of bank accounts.

“Also, the TSA and the IPPIS were deployed to ensure that the Federal Government resources are prudently managed,” he said.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Guinness Nigeria Postpones Spirits Importation Exit, Extends Deal with Diageo

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Guinness Nigeria Plc has announced a delay in its plan to halt the importation of spirits as it extended its agreement with multinational alcoholic beverage company Diageo until 2025.

The decision, communicated through a corporate notice filed with the Nigerian Exchange Limited on Tuesday, cited a longer-than-expected transition period for separating its business from Diageo’s.

Initially slated for discontinuation in April 2024, the importation of premium spirits like Johnnie Walker, Singleton, Baileys, and others under the 2016 sale and distribution agreement with Diageo will now continue for an additional year.

The extension comes as the process of business separation between Guinness Nigeria, a subsidiary of Diageo, and Diageo itself faces unexpected delays.

In October, Guinness Nigeria had announced plans to cease importing spirits from Diageo, a move aimed at reducing its foreign exchange requirements.

However, the separation process has encountered unforeseen hurdles, necessitating the extension of the importation agreement.

The notice, signed by the company’s Legal Director/Company Secretary, Abidemi Ademola, highlighted the ongoing efforts by Guinness Nigeria and Diageo to implement the separation, originally scheduled for completion by April 2024.

The extension underscores the complexity of disentangling the businesses and ensuring a smooth transition.

Guinness Nigeria reaffirmed its commitment to the long-term growth strategy, aligning with Diageo’s decision to establish a new, wholly-owned spirits-focused business.

Despite the delay, both companies remain dedicated to managing the importation and distribution of international premium spirits in West and Central Africa, with Nigeria as a key hub.

The postponement comes amid challenges faced by Guinness Nigeria, including significant exchange rate losses, which amounted to N49 billion in the 2023 half-year operations.

Despite these setbacks, the company remains optimistic about its future prospects in the Nigerian market.

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Private Sector Warns: Interest Rate Hike to Trigger Job Cuts and Inflation Surge

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As the Central Bank of Nigeria (CBN) announced a hike in the Monetary Policy Rate (MPR) from 22.75% to 24.75%, concerns have been raised by the private sector regarding the potential ramifications on job stability and inflationary pressures.

The move, aimed at curbing inflation and stabilizing the exchange rate, has prompted apprehension among business operators who fear adverse effects on the economy.

Representatives from the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) and the Nigerian Association of Small Scale Industrialists have voiced their worries over the increased difficulty in accessing affordable credit.

They argue that the higher interest rates will impede the private sector’s ability to borrow funds for expansion and operational activities.

This, they fear, could lead to a reduction in business investments and subsequently result in widespread job cuts across various sectors.

The Lagos Chamber of Commerce and Industry (LCCI) acknowledged the necessity of the interest rate hike but emphasized the potential negative consequences it may bring.

While describing it as a “price businesses would have to pay,” the LCCI highlighted the current fragility of the economy, exacerbated by various policy missteps.

They cautioned that the increased cost of borrowing could stifle entrepreneurial activities and discourage expansion plans critical for economic growth and job creation.

Experts have echoed these concerns, warning that the tightening monetary conditions could exacerbate inflationary pressures and hinder economic recovery efforts.

With inflation already soaring at 31.70%, the rate hike could further fuel price hikes, especially in essential goods and services, thus eroding the purchasing power of consumers.

However, CBN Governor Yemi Cardoso defended the decision, citing the imperative to address current inflationary pressures and ensure sustained exchange rate stability.

He emphasized the need to restore the purchasing power of ordinary Nigerians and expressed confidence that the economy would stabilize by the end of the year.

Despite assurances from the CBN, stakeholders remain cautious, calling for a more nuanced approach that balances the need for price stability with the imperative of fostering economic growth and job creation.

As businesses brace for the impact of the interest rate hike, all eyes are on the evolving economic landscape and the measures taken to mitigate its effects on livelihoods and inflation.

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Breaking Barriers: Transcorp Hotels CEO Shares Journey from Crisis to Success

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Dupe Olusola

Dupe Olusola, the Managing Director/CEO of Transcorp Hotels Plc, reflects on her remarkable journey from navigating the depths of a global pandemic to achieving unprecedented success in the hospitality industry.

Appointed in March 2020, amidst the onset of the COVID-19 pandemic, Olusola found herself at the helm of a company grappling with the severe economic fallout and operational challenges inflicted by the crisis.

Faced with a drop in occupancy rates from 70% to a mere 5%, Olusola and her team were confronted with the daunting task of steering Transcorp Hotels through uncharted waters.

Undeterred by the adversity, they embarked on a journey of transformation, leveraging creativity and resilience to navigate the turbulent landscape.

Implementing innovative strategies such as introducing drive-through cinemas, setting up on-site COVID-19 testing facilities, and enhancing take-away services, Transcorp Hotels adapted to meet the evolving needs of its guests and ensure continuity amidst the crisis.

Embracing disruption as a catalyst for growth, Olusola fostered a culture of collaboration and teamwork, rallying her colleagues to overcome obstacles and embrace change.

Through unwavering determination and a commitment to excellence, Transcorp Hotels emerged from the pandemic stronger than ever, breaking profit and revenue records year after year.

“It’s indeed been a great opportunity to learn and relearn, to lead and to grow. When you see success stories, remember it’s a journey with twists, turns, ups and downs but in the end, it will all be okay”, she said.

Olusola’s leadership exemplifies the power of adaptability and perseverance, inspiring her team to transcend limitations and chart a course towards unprecedented success.

As Transcorp Hotels continues to flourish under her stewardship, Olusola remains steadfast in her dedication to driving innovation, fostering growth, and breaking barriers in the hospitality industry.

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