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FG Urged to Raise VAT to 7%

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tax relief
  • FG Urged to Raise VAT to 7%

If the country is to reduce unemployment and stimulate economic growth, the federal government has been advised to take bold steps which includes raising the Value Added Tax (VAT).

Proshare, an online financial information service hub, stated this in a report titled: ‘Proshare Confidential,’ obtained yesterday.

While the report stressed that in times of slow growth, economists would typically not prescribe raising taxes, it stated that since Nigeria currently has the lowest VAT in West Africa at five per cent, the government could be bold to increase the tax by at least 200 basis points, pushing the rate up by two per cent.

It noted that if this is implemented, the government should therefore concentrate the additional revenue in infrastructural developments that helps to drop the cost of doing business and citizen transactions to create headroom for consumption which would spur business growth.

This, over a period of 36 months, it stated, could reduce the cost of distribution of goods and services, thereby resulting in massive savings in logistics costs which could turn up as major improvements in corporate bottom lines and additional tax income; successfully closing the revenue-expenditure gap.

“It’s all about productivity enhancement and not hand-outs to the most vulnerable in the society the way it is done.

“You protect the most vulnerable by establishing public safety nets such as unemployment benefits, health services, state subsidised housing etc – all of which has to be paid for from the increase in productivity (translating to tax revenues), plugging of leakages through system/process improvements and adjusting the fiscal regime of taxes of tariffs to spur growth in the short term which will be clawed back to attain near equilibrium (illusory to get an optimum) as progress is attained,” the report stated.

In its review of 2019, it described the year as a “watershed for several countries across Africa as they enter election cycles that could make or mar their future.”

It pointed out that in Nigeria, the battle for the country’s political and economic soul has become vicious with every arm of government easy fodder for political henchmen determined to keep their paymasters, godfathers and muppets in the business of governance.

Unfortunately, this it stated meant that Nigeria’s 2019 federal fiscal plan would be more of a concession to tradition rather than a programme of action to building a resilient economy that can sustain a population growth of 2.9 per cent per annum.

It also faulted the federal government’s 2019 Appropriation Bill.

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.

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CBN Offers Assistant In Printing Gambia’s Currency

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Godwin Emefiele CBN - Investors King

The Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele, has said that the bank is willing to assist the Central Bank of the Gambia to print its legal tender.

Emefiele said this in Abuja on Tuesday during a two-day visit by a delegation from the Central Bank Of Gambia, led by its governor, Mr. Buah Saidy.

This was in response to a request by the CBG for a possible partnership to tackle acute currency shortages among other currency management challenges in the country.

Saidy informed the CBN governor that relying on its current printer, De La Rue of London, for its currency needs was expensive and unsustainable.

He explained that it costs the bank about £70,000 to lift printed currencies from Sri Lanka to the Gambia.

In response, the CBN Governor assured his visitors that the bank had an extremely competitive advantage to undertake the currency printing for  Gambia, adding that the Nigerian Security Printing and Minting had a lot of idle capacity to satisfy the demand of the CBG.

He said, “I note your point on currency management. The Nigerian mint was set up in the early 1960s and we’ve been producing our currency since the early 60s and we have a lot of idle capacity to ensure that instead of you going to Europe or other countries, you will be able to benefit from our ideas.

“Our colleagues will take you to the security printing facility. Our colleagues that came in from Liberia two months ago were fascinated by the kind of facilities we have at our security printing and minting facility and I am sure that you will also enjoy them.

“And I am sure they will follow you back to the Gambia to see how they can help you to structure your economic order quantities so we can also be of assistance in printing your currency.

“And I can assure you that we can be extremely competitive if only from the standpoint of logistics and freight from Europe but it’s just going to be a few hours from here to the Gambia and the rest of them.”

The CBG Governor also noted that one of the purposes of the visit was to benefit from the CBN’s vast experiences on how it had successfully regulated the financial system and sought assistance in the areas of information technology, modernisation, cybersecurity, forex shipping and management, among others.

Emefiele in response attributed the successes to the support which the apex bank had enjoyed from the National Assembly.

He said, “On the issue of the CBN independence, I thank you for the kind words. But I think the point is that we thank our own parliament. Our parliament has been extremely supportive of the CBN.”

He, therefore, advised the CBG to work with its parliament to create laws that would provide the independence needed.

Emefele further stated that the apex bank was not sparing any effort to address issues of supply management to ensure economic growth.

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Ardova to Acquire 100 Percent Stake in Enyo Retail and Supply Limited

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Olumide Adeosun Ardova - Investors King

Ardova, an indigenous energy company headquartered in Lagos, Nigeria, with extended operations in Ghana, has reached an agreement with Enyo Retail and Supply Holding Limited to acquire a 100 percent equity stake in Enyo Retail and Supply Limited.

This announcement follows the execution of a share purchase agreement by the two companies.

The company disclosed in a statement signed by Oladeinde Nelson-Cole, Company Secretary/General Counsel, Ardova Plc.

The statement highlighted the parties’ commitment to closing the transaction in line with the share purchase agreement, as soon as agreed closing conditions are satisfied, and regulatory approval is received.

Stanbic IBTC Capital Limited and Banwo & Ighodalo are acting as Financial and Legal Advisers respectively to AP, while Rand Merchant Bank and Herbert Smith Freehills Paris LLP are acting as Financial and Legal Advisers to ERSHL and certain of its shareholders.

Olumide Adeosun, Chief Executive Officer of AP, stated that “On completion, this acquisition will lead to a stronger downstream energy group that benefits from the increased customer reach and service delivery excellence of both companies, with the combination expected to produce stronger financial results.”

Ardova Plc and Enyo Retail & Supply Limited will communicate details of future progress made on this acquisition.

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PwC to Add 100,000 Jobs in $12 Billion Strategic Revamp

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Price Waterhouse Coopers - Investors King

PricewaterhouseCoopers LLP is investing $12 billion across its global business in an overhaul targeting better audits, digitization of services and greener operations.

The professional-services provider will hire 100,000 employees and develop the skills of existing staff over the next five years as it seeks to respond to the post-pandemic operating environment, it said in an emailed statement on Tuesday.

“We will continue to evolve our ways of working, and expand our capabilities in the areas that matter most for the future, while remaining steadfast in our commitment to quality,” PwC Chairman Bob Moritz said. “We want our people to be the most sought after in the market.”

Auditors are grappling with managing quality amid a shift in ways of working introduced by the Covid-19 pandemic. The International Auditing and Assurance Standards Board has revised standards for auditors, coming into effect in 2022, to boost technology use, help manage new risks, and improve quality management.

PwC is also seeking ways to address growing calls for transparency in the profession from stakeholders after several accounting scandals among the Big Four auditing firms knocked public trust. In South Africa, for example, KPMG has put in place a variety of reforms after it came under fire in 2017 for work done for a politically connected family accused of plundering the government’s coffers.

The South African unit of PwC will add at least 2,500 new employees over the next five years, Chief Executive Officer in the region Dion Shango told reporters in a conference call. Across Africa, where it has a presence in 34 countries, the firm plans to bulk up its operations with a $400 million investment. The company is also interviewing for non-executive directors to strengthen audit oversight.

PwC has also set aside $3 billion of its total global investment to help double the scale of its Asia-Pacific operations, it said. The firm’s spending will also focus on responding to environmental, social and governance trends across its operations.

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