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Ahmed: FG Plans to Raise VAT to 7.5% by 2020

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  • Ahmed: FG Plans to Raise VAT to 7.5% by 2020

A former Minister of Finance, Mrs. Zainab Ahmed, yesterday said the federal government was planning to increase the rate of value-added tax (VAT) to 7.5 per cent from the current five per cent by 2020.

This is as the government seeks to shore up falling revenue, according to Bloomberg.

Speaking at the Bloomberg Emerging & Frontier Forum in London, the former minister, whose tenure ended with President Muhammadu Buhari’s first term on May 29, said that her main preoccupation while in office was how to raise government’s revenue with only 55 per cent of targets being met.

Buhari, who was re-elected for a second four-year term, is yet to constitute a new cabinet.

She said: “We have developed a strategic revenue growth initiative, which we have started to implement.

“Our target is to increase revenue to 65 per cent minimum in 2019 so that in the next three years we are able to attain 80-85 per cent of our revenue target.”

However, earlier plans by government to increase VAT had been vehemently opposed by Nigerians.

In April, following a public backlash, Executive Chairman, Federal Inland Revenue Service ((FIRS), Mr. Babatunde Fowler, refuted reports it had proposed a 50 per cent increase in VAT when he appeared before the National Assembly to defend the agency’s 2019 budget.

But Fowler maintained that his position was misrepresented as he actually recommended an increase in the number of Nigerians and companies paying VAT and not the other way around.

A statement issued by his media department to debunk the claim stated: “Though he indicated that there should be an increase in the VAT rate by the end of the year, he never for once suggested a 50 per cent hike or any percentage increase at all.

“Rather, he promised improved collection in CIT, Petroleum Profits Tax, PPT and VAT in 2019 relative to the collection performance of the service in 2018.

“In 2018, FIRS collected the sum of N1.1 trillion in VAT; N1.42 trillion in Companies Income Tax (CIT); and N2.4 trillion in Petroleum Profits Tax (PPT).”

Also, Ebonyi State Governor, Chief David Umahi, had further opposed the proposed plan by the federal government to lift Value Added Tax (VAT) from five per cent to 35 per cent, stressing that it would put the country in difficult situations.

The governor had said that the plan, which was proposed by the federal government in order to pay workers’ salary with the implementation of the N30,000 minimum wage, was like digging a hole to fill a hole.

According to the National Bureau of Statistics (NBS), the federal government generated N1.10 trillion as VAT in 2018, representing a growth of 13.96 per cent (year-on-year) when compared to the N972.34 billion collected in 2017.

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.

Economy

India, Spain, the Netherlands, USA, Nigeria’s Major Export Markets -NBS

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Nigeria’s major export and import market in the fourth quarter of 2020 were India, Spain, the Netherlands, the United States and China, the National Bureau of Statistics has said.

It disclosed this in its just released Commodity Price Indices and Terms of Trade Q4 2020.

The bureau stated that the major commodities exported from Nigeria to the five nations were crude oil and natural gas.

The NBS said, “The major export and import market of Nigeria in Q4 2020 were India, Spain, the Netherlands, United States and China.

“The major export to these countries were crude petroleum and natural gas. The major imports from the countries were motor spirits, used vehicles, motorcycles and antibiotics.”

The bureau stated that the all-commodity group import index increased by 0.13 per cent between October and December 2020.

This was driven mainly by an increase in the prices of base metals and articles of base metals (one per cent), boilers, machinery and appliances; parts thereof (1.03 per cent), and products of the chemical and allied industries (0.75 per cent),” it stated.

The NBS, however, noted that the index was negatively affected by animal and vegetable fats and oils and other cleavage products.

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Economy

Onyeama: Qatar To Invest $5bn In Nigeria’s Economy

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The oil-rich state of Qatar is to invest a total of $5 billion in Nigeria’s economy, the Foreign Affairs Minister, Godfrey Onyeama, has disclosed.

Onyeama, who spoke Sunday at a send forth dinner in honour of Nigeria’s Ambassador-designate to the State of Qatar, who is also the outgoing Director of Protocol (DOP) at the State House, Ambassador Yakubu Ahmed, also stated that recent career ambassadorial appointments made by the gederal government was based on merit, experience and professionalism.

The minister further said there had been discussions with Qatar on partnership with Nigeria’s Sovereign Wealth Fund (SWF), for significant investments in the region of $5 billion in the Nigerian economy.

According to him, ‘‘Qatar is a weighty and strategic country and very strategic in that part of the world and we are putting our best feet forward to advance the interest of our country economically and in other areas.”

He recalled that President Muhammadu Buhari had visited the State of Qatar in 2016 and the Emir of Qatar, Tamim Bin Hammad Al-Thani, reciprocated with a State visit in 2019.

Onyeama also explained that only trusted hands with a track record of diligence, experience and professionalism in the Foreign Service were recently appointed career ambassadors by the federal government.

The minister said the appointment of Ahmed and other career ambassadors were predicated on posting dedicated and keen Foreign Service practitioners to serve as image makers of the country.

He said: ‘‘Ambassador Yakubu Ahmed is a dedicated professional with a penchant for rigour and detail. He is very capable and one of the best in the Ministry of Foreign Affairs. He is personable, affable, extremely friendly, dispassionate and objective.

‘‘He is going to head a very important mission, a very important country, reckoned to be one of the richest countries in the world, per capita, and there’s a lot we will be doing with the State of Qatar.”

Also speaking, the Deputy Chief of Staff, Adeola Rahman Ipaye, described the honoree as a ‘‘perfect gentleman, very even-natured and always well turned out’’.

Ipaye said he had no doubt that the newly appointed ambassador would serve the country well in Qatar, adding that: ‘‘We are further encouraged that when he completes this assignment, he would return to serve Nigeria in a higher capacity.’’

In his remarks, the Permanent Secretary, State House, Tijjani Umar, while congratulating the outgoing DOP on his appointment, lauded Ahmed for excellent service to the State House and the nation.

‘‘He served this institution and the nation with the deepest sense of responsibility and it is very important that we establish a tradition where the system appreciates those who have served it well and those who will continue to serve it well,’’ he said.

Umar urged the new envoy to keep very fond memories of his time at the Presidential Villa, assuring him of the prayers and goodwill of all the staff.

Responding, Ahmed thanked President Buhari for the great honour and privilege of making him his principal representative in Doha, Qatar.

The Ambassador-designate pledged to deplore his energy and skill to the promotion of the existing cordial relationship between Nigeria and Qatar, particularly in the areas of economic, political, cultural and consular affairs as well as other key areas.

Ahmed, who joined Nigeria’s Foreign Service in 1993, said during his years in public service he had learnt that ‘‘patriotism, selfless service, diligence, determination and perseverance will always result in the achievement of the desired objective’’.

According to him, these virtues would be his ‘‘watchword’’ in the pursuit of Nigeria’s foreign policy objectives and the attainment of national interests.

The Ambassador-designate singled out for appreciation the Chief of Staff to the President, Prof. Ibrahim Gambari, and the state Chief of Protocol, Ambassador Lawal Kazaure, saying he had learnt a lot working under their mentorship.

He expressed gratitude to the Minister of Foreign Affairs and the Permanent Secretary, State House for giving him the opportunity of a memorable work experience in the State House.

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Economy

France, Nigeria to Build New Partnership

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France is currently aiming at building a new partnership with Nigeria, with the dispatching of its Minister in charge of Foreign Trade and Attractiveness, Franck Riester, to Nigeria.

Riester, who was expected at the time of filing this report on Monday, is scheduled to visit Nigeria from 12-14 April, 2021.

A statement from the French Embassy in Nigeria said: “Franck Riester is visiting Nigeria from 12 to 14 April, a visit that follows up on the priorities set by French President Emmanuel Macron during his official visit to Nigeria in July 2018 and his desire to build a new partnership between Africa and France.

“As the largest economy in Africa and the economic engine of West Africa, Nigeria is indeed a major partner for France, the first in sub-Saharan Africa with bilateral trade amounting to a total of 4.5 billion USD in 2019 (2.3 billion USD in 2020, due to the Covid-19 pandemic).”

It disclosed that the minister will have several official meetings in Abuja and Lagos, in order to underline the importance of the bilateral economic relationship and to prepare the summit on the financing of African economies in Paris on 18 May.

It revealed that the objective of the mission is also to further strengthen the links between the French and Nigerian private sectors, and “in this regard, the minister will have in-depth discussions with the main Nigerian economic actors to strengthen bilateral cooperation and investments, both in Nigeria and in France, particularly in the logistics sector”.

It said while in the country, the minister would meet with young Nigerian entrepreneurs in the cultural and creative industries sector, to discuss the major role of their country in African creativity and the development of the African entrepreneurial ecosystem, with the support of France.

It further said: “The minister will also open the ‘Choose Africa’ conference, a €3.5 billion initiative by President Emmanuel Macron dedicated to supporting the development of start-ups and SMEs in Africa to enable the continent to benefit fully from the opportunities of the digital revolution.”

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