Focus on Improving Tax Collection Efficiency, IMF Tells FG
The International Monetary Fund (IMF) has said the Federal Government should focus on improving tax collection efficiency and not raise the nation’s taxes given the current economic situation.
Speaking at a virtual conference on Thursday, Jesmin Rahman, the IMF Mission Chief to Nigeria, said “Before you go about raising taxes, we need to first make sure that we collect everything that is collectible.”
“At the moment, Nigeria has a very low tax efficiency rate,” Rahman said.
Experts have said Nigeria’s tax-to-GDP ratio is one of the lowest in the world at about 7 percent. This was despite the Federal Government raising Value Added Taxes (VAT) from 5 percent earlier this year to 7.5 percent. Suggesting that a large number of Nigerians are not paying taxes as demanded by the constitution.
Therefore, Rahman said the nation’s low revenues is weighing on its ability to service debt and sustain infrastructural growth despite having a low debt to GDP ratio.
“Even though the debt level itself is not a concern for sustainability, it’s servicing capacity is severely constrained and requires a close watch,” she said.
“Nigeria’s public debt was at 29 per cent of GDP in 2019 in our definition of all known liabilities like the Central Bank of Nigeria (CBN) financing of the budget, financing of the power sector, Asset Management Corporation of Nigeria (AMCON) debt and everything came to 29 per cent of GDP.
“We project this to increase to 36.5 per cent this year, which is a jump and then stay around 38 per cent of GDP in the medium term,” she said.
Nigeria’s debt service to revenue ratio rose to 99 percent in the first quarter of 2020, according to the Debt Management Office (DMO).
Stanbic IBTC Obtains Approvals, License to Establish Life Insurance Subsidiary
Stanbic IBTC Holdings Plc on Friday announced that it has obtained all required Regulatory Approvals and a license from the National Insurance Commission to establish a wholly-owned Life Insurance subsidiary, Stanbic IBTC Insurance Limited (SIIL).
In a statement signed by Chidi Okezi, Company Secretary, Stanbic IBTC and released on Friday, the bank said “The establishment of this new subsidiary essentially complements the bouquet of product offerings by Stanbic IBTC as it continues its goal of being the leading end-to-end financial solutions provider in Nigeria. In this regard, SIIL will aim to facilitate long term insurance for already financially included individuals and will seek to become the preferred Insurer in the Life Insurance Business.
“Stanbic IBTC Holdings PLC, a member of Standard Bank Group, is a full-service financial services group with a clear focus on three main business pillars – Corporate and Investment Banking, Personal and Business Banking and Wealth Management. The group’s largest shareholder is the Industrial and Commercial Bank of China (ICBC), the world’s largest bank, with a 20.1% shareholding. In addition, Standard Bank Group and ICBC share a strategic partnership that facilitates trade deals between Africa, China and select emerging markets. Standard Bank Group is the largest African financial institution by assets. It is rooted in Africa with strategic representation in 21 countries on the African continent.
“Standard Bank has been in operation for over 158 years and is focused on building first-class, on-the-ground financial services institutions in chosen countries in Africa; and connecting selected emerging markets to Africa by applying sector expertise, particularly in natural resources, power and infrastructure.”
World Bank to Discuss New $1.5 Billion Loan Request From Nigeria
The Finance Minister, Budget and National Planning, Mrs. Zainab Ahmed, on Friday said the Federal Government has met all the conditions for a fresh loan of $1.5 billion from the World Bank.
The minister disclosed this on Bloomberg TV.
She said the multilateral financial institution is in the final stage of approving the loan. The minister explained that the loan will be discussed in the bank’s next meeting and possibly be approved in the same meeting.
In June, the Senate approved the borrowing plans but the World Bank pushed back demanding Nigeria fulfill the conditions attached to the $3.4 billion loan received from the International Monetary Fund (IMF) in May.
Some of the conditions were to increase revenue generation by upping VAT, the introduction of tariff reflective electricity bill, the removal of subsidy and the unification of the nation’s foreign exchange.
Most of which the Federal Government has done despite protests from most Nigerians who called the new policies anti-people given their current situation.
Nigeria Realises Over N400 Billion from Company Income Tax in the Third Quarter of 2020
The Federal Government realised N416.01 billion from Company Income Tax (CIT) in the third quarter of the year, according to the latest report from the National Bureau of Statistics (NBS).
This was 3.48 percent higher than the N402.03 billion generated in the second quarter of the year and represents a decline of 20.13 percent year-on-year from N520.89 billion realised in the third quarter of 2019.
A breakdown of the report showed the professional services sector including the telecoms generated the highest amount of CIT at N55.52 billion during the quarter, while the manufacturing sector followed with N42.03 billion.
The banking and financial institutions realised N24.05 billion while the mining generated the least and closely followed by Textile and Garment Industry and Local Government Councils with N120.93 million, N167.51 million and N321.72 million generated, respectively.
The report added that out of the total amount realised during the quarter under review, a sum of N244.70 billion was generated as CIT locally. The federal government collected N70.34 billion as foreign CIT payment and the remain N100.97 billion was received as CIT from other payments.
Business2 months ago
Npower News on Permanency for Batch A, B
Forex2 months ago
Naira Improves Against Global Counterparts on Black Market
Business2 months ago
Buhari Budgets N420 Billion for Npower, Other Social Investment Programmes in 2021 Budget
Forex3 months ago
Zenith Bank Joins Other Banks to Cap International Spend Limit at $100/Month
Cryptocurrency2 months ago
Bitcoin Gains 1.67 Percent to $11,050 Per Coin Amid Liquidity Issue
Business3 months ago
Again, UBA Reduces International Spending Limit on Naira Card as Forex Scarcity Persists
Stock Market3 months ago
Zenith Bank Declares 30 Kobo Interim Dividend for H1 2020
Business3 months ago
FG Approves Stipends for Exited N-Power Beneficiaries