- Average Nigerian Business Pays 48 Taxes, Says Elumelu
The Chairman and founder of Heirs Holdings, Tony Elumelu, has said that an average business concern in Nigeria pays 48 taxes.
He noted that with this trend Nigeria would be unable to keep its investors and entrepreneurs if the issue of multiple taxation was not abolished.
He said this in Abuja on Thursday while delivering the keynote address at the 21st annual tax conference of the Chartered Institute of Taxation of Nigeria.
While he called for a far-reaching tax reforms and an urgent need to pass the executive tax bill, he decried the plight of the average Nigerian entrepreneur, saying that an average business was a local government authority providing his own electricity, water and waste disposal method.
According to The Cable, he said the government should make life easier for Small and Medium Enterprises by creating favourable tax policies that will support them. He called on the government to eliminate the regime of multiple taxation.
He said, “Until there is a reduction in what SMEs pay as tax, elimination of multiple taxation, the abolition of minimum income tax and excess dividend tax, it will be difficult for us to attract investors into this country, and it will be difficult for us to retain the ones already in the country. It will be difficult for us to mobilise our SMEs to help create employment that we need so much in this country.”
“The average number of taxes businesses pay in Nigeria is 48, compared to 33 in other sub-Saharan countries. In Hong Kong, it’s just three. Multiple taxation remains a significant burden for SMEs and corporates operating in the country.
“With a population of close to 200 million people in Nigeria, we have only 75,000 registered SMEs in the country. No one needs to tell us that people are avoiding tax or refusing to be a part of the system.”
According to the Heirs Holdings chairman, to increase the tax to GDP ratio from its current six per cent to 16 per cent will amount to an additional $40bn in government revenue, which is similar to the size of the nation’s foreign reserves.
He said, “Government should drive mass mobilisation of citizens – let citizens know why they need to pay taxes and give them the assurance that their tax will be properly utilised.”
“Government should employ the use of smart tax incentives to attract and incentivise local and foreign investors.
“Nigeria has 14 taxation treaties while a country like South Africa has 79 double taxation treaties, and we are the largest economy in Africa. Our embassies should adopt a target in the next two years to sign tax treaties with our top 100 trading partners in the world.”
Also, the Chartered Institute of Taxation of Nigeria said there was the need for an amendment of the country’s tax laws in order to address some of the loopholes in the tax system.
It said while the dynamic nature of the economy had made it imperative for the nation’s tax laws to be amended annually, it was almost eight years now since Nigeria last amended its tax laws. The last time the country’s tax laws were amended was in 2011.
The Vice- President of the Institute, Mrs Olajumoke Simplice, urged the National Assembly to pass the tax amendment bill into law without further delay.
The conference which is the single largest gathering of tax practitioners in Nigeria has ‘Unlocking the potentials of taxation,’ as its theme. She expressed optimism that the new tax amendment bill when passed into law would encourage more people to pay tax.
She said, “The National Assembly is not helping in the development of the nation. Certain things should be considered as priority. Taxation is a dynamic thing.
“There should be amendment of the tax laws every year but the last time there was amendment of tax laws in Nigeria was in 2011. They should put their personal interests aside and approve the bill. Nigerians should be encouraged to pay tax.”
Federal Government Clears $120m Debt to Gas Companies Amid Nigeria’s Power Crisis
Amidst Nigeria’s persistent power crisis, the Federal Government has taken a pivotal step forward by clearing a significant portion of its debt to gas companies.
A sum of $120 million has been paid out of the country’s $1.3 billion indebtedness to gas suppliers, offering a glimmer of hope for improved energy stability across the nation.
The Minister of Power, Chief Adebayo Adelabu, underscored the critical role of gas in power generation and highlighted how the mounting debts had severely hampered gas supply to electricity-generating companies, exacerbating the country’s electricity shortfall.
Nigeria heavily relies on thermal power plants fueled by gas for over 70% of its electricity needs, making the timely settlement of gas debts paramount for enhancing power generation capacity and addressing the nation’s energy deficit.
Addressing delegates at the 7th Nigeria International Energy Summit in Abuja, the Director of the Decade of Gas Secretariat, Ed Ubong, expressed optimism about the government’s progress in offsetting its financial obligations to gas producers.
He emphasized the importance of aligning gas and power sectors to foster sustainable energy solutions.
As Nigeria grapples with the multifaceted challenges plaguing its energy landscape, the government’s commitment to settling outstanding gas debts marks a pivotal stride towards revitalizing the country’s power infrastructure and ensuring reliable electricity access for its citizens.
Nigeria Insurance Corporation Reimburses Depositors of 179 Closed Microfinance and Four Mortgage Banks
The Nigeria Insurance Corporation (NDIC) has announced the successful reimbursement of depositors affected by the closure of 179 microfinance banks and four mortgage banks across the country.
The reassuring news came during the 45th Kaduna International Trade Fair, where NDIC’s Managing Director, Dr. Bello Hassan, explained the corporation’s unwavering commitment to safeguarding depositors’ funds amidst financial uncertainties.
Dr. Hassan, represented by Hauwa Gambo, the NDIC’s Deputy Director of Communication, highlighted the corporation’s proactive measures in protecting the interests of depositors.
The introduction of the Single Customer View framework has expedited the process of reimbursing depositors of liquidated banks, ensuring swift and transparent transactions.
The corporation’s collaboration with the judiciary has yielded positive results, facilitating the speedy prosecution of failed insured banks and resolving long-standing cases of bank liquidations like Fortune and Triumph Banks.
This concerted effort has significantly enhanced the debt recovery rate, enabling NDIC to declare full liquidation dividends to uninsured depositors of over 20 deposit money banks.
Furthermore, NDIC has embraced digital remote payment strategies, streamlining electronic funds transfers to verified depositors’ alternate bank accounts.
The introduction of the ‘Deposit Tracer’ initiative in partnership with mobile operators aims to address apathy among depositors with small balances, providing accessible avenues for claiming funds trapped in closed banks.
The initiatives underscore NDIC’s proactive stance in safeguarding depositors’ interests and ensuring financial stability in Nigeria’s banking sector.
85.51 Million Nigerian Bank Customers Face Withdrawal Freeze Over NIN, BVN Deadline
As the March 1 deadline looms, an estimated 85.51 million Nigerian bank customers are facing the possibility of frozen accounts due to their failure to link their National Identification Numbers (NINs) and/or Bank Verification Numbers (BVNs) to their accounts.
Recent findings reveal the potential scale of the impending banking crisis.
Data from the Nigeria Inter-Bank Settlement System (NIBSS) indicates that Nigeria had approximately 146 million active individual bank customers as of December 2022.
However, by January 26, 2024, only 60.49 million BVNs were recorded on the NIBSS portal, leaving a significant portion unlinked.
Meanwhile, about 104 million NINs had been issued by December 2023, highlighting the disparity between NIN issuance and BVN linkage.
The Central Bank of Nigeria (CBN) had earlier issued directives to banks, mandating them to restrict transactions on accounts lacking linked NINs and BVNs, with effect from March 1, 2024.
Any accounts found non-compliant risk being designated as ‘Post no Debit,’ rendering them unable to process further transactions.
Responding to the impending crisis, the Director-General of the National Identification Management Commission (NIMC), Abisoye Coker-Odusote, emphasized the need for the revalidation of Front-End Partners (FEPs) to ensure the integrity of the identity database.
She underscored the importance of NIN registration and urged collaboration with various stakeholders to expedite the process.
The Executive Vice Chairman/CEO of the Nigerian Communications Commission (NCC), Dr. Aminu Maida, reiterated the significance of linking NINs to SIM cards to enhance national security.
Telecom subscribers were urged to comply with the NIN-SIM linkage directive to avoid service disruptions.
Meanwhile, financial service providers like Opay have issued reminders of the impending restrictions, urging customers to comply with the linkage requirements.
Amidst concerns, some customers contemplate transferring funds to compliant accounts to avoid potential financial setbacks.
As the deadline approaches, stakeholders are intensifying efforts to mitigate the impact of the impending banking crisis on millions of Nigerians.
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