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Oxfam Urges FG to Fast-track Action on New Tax Policy

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Evaluation of Public Accountability and Tax Culture among Tax Payers in Nigeria
  • Oxfam Urges FG to Fast-track Action on New Tax Policy

Oxfam in Nigeria has called on the federal government to fast-track action on the approved new National Tax Policy in order to tackle corporate crimes.

Oxfam Country Director, Constant Tchona, made the call in Abuja at the public unveiling of the ‘Fair Tax Index report and the Commitment to Reducing Inequality Index (CRII)’ report, with the theme ‘West Africa Inequality Crisis: The Fight Against Inequality through Progressive Taxation’ in Abuja.

He said Oxfam had developed policy recommendations and strategies, saying it would be used to advocate for a fairer tax system that helps to redistribute prosperity from the richest in the society to the very poorest.

Tchona, explained that a 2015 Oxfam’s report highlighted the inefficiency of Nigeria’s tax incentives where it submitted that the country loses N580 billion annually through tax incentives to multinational corporations.

To put this in perspective, he noted that the health budget was only one third of this amount in 2015.

The country director added that Nigeria needs to rework its strategies and sets its economic priorities right by investing in agriculture, manufacturing and infrastructure rather than waste its hard-earned resources on unproductive and redundant tax incentives.

Tchona explained further that the official Federal Inland Revenue Services (FIRS) numbers suggest that the entire tax system was fraught with crippling challenges of weak enforcement, corruption and outright evasion.

According to him, “The records show that about 30 per cent of companies in Nigeria are involved in tax evasion and also 25 per cent of registered companies in the country are not paying tax.

“Taxpayers often opt to negotiate with corruption tax administration staff in return for gratifications and reduced sums to the coffers of the government.”

Tchona said the fiscal incentives granted with the hope of stimulating investments into the country’s economy were eroded with poor governance and lack of transparency, especially when the central bank had confirmed that there was no cost benefit analysis to justify the exemptions and when there was no check in discretionary powers residing with the Executive in granting exemptions.

He stressed that the Voluntary Assets and Income Declaration Scheme (VAIDS) was designed to increase tax revenue by encouraging voluntary disclosure of any previously undisclosed income liable for tax and to bring as many people as possible into the tax net. This, he said resulted in $5 million extra revenue which was about N1.8 billion, but this was only 10 per cent of the expected amount.

Tchona, however, called on the federal government to opt for aggressive taxation of the informal sector in order to meet the revenue target.

“There is need for the Nigerian government to fast-forward action on the New National Tax Policy approved and clamp down on corporate crimes.

“New legislation and rules to cope with current realities should be enacted along with introduction of cutting edge technology.

“The National Assembly should enact a law to punish enablers of tax evasion such as lawyers, accountants and bankers and should be made to face fines of up to 100 per cent of tax evaded

“The National Assembly should enact law that will criminalise totally the actions of middlemen- banks, auditors and lawyers that facilitate illicit financial flows. When such professionals act contrary to existing regulations, they should be held accountable in Nigeria.

“This can be enforced through strengthened professional association bodies.”

While presenting his paper on, ‘Understanding the Impact of Inequality in Nigeria and Policy Recommendations,’ the Country Director of Plan International Nigeria, Dr. Husseini Abdul, said tax was not only about income for government, but one of the best way to tackle inequality

According to him, “We can’t have conversation about the development of this country without talking about inequality. The trajectory of development is a problem and economic policies are needed to deal with them.”

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 - Investors King

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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Private employers

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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