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Tax Tribunal Directs DSTV To Pay 50% Of N1.8T FIRS Tax Claim Before Hearing Appeal

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Multichoice- Investors King

The Tax Appeal Tribunal (TAT) sitting in Lagos has ordered the local unit of South Africa’s pay-TV, Multichoice Nigeria Limited to pay 50 percent of N1.8 trillion owed to the Federal Inland Revenue Service (FIRS) in tax arrears before it could hear its appeal.

The FIRS had issued a post no debt on bank accounts of the owners of popular cable television services, DSTV over the dispute on claims of N1.8 trillion outstanding tax as determined through a forensic audit by the Nigeria tax agency.

Multichoice Nigeria Limited had filed an appeal against the FIRS before the Tax Appeal Tribunal in Lagos to challenge the claim by the tax agency on its outstanding tax debt.

However, on Tuesday, the five-member TAT led by its Chairman, A.B. Ahmed, a professor issued an order directing the pay-TV firm to deposit 50 percent of the amount claim by FIRS before it could hear its appeal.

In a statement, FIRS director of communications, Abdullahi Ismaila Ahmad said the tribunal ruling was sequel to an application to it by the Counsel to FIRS.

The FIRS Counsel made the application under Order XI of the TAT Procedure Rules 2010 which enables a party to make an application at any stage of the proceedings.

Counsel for FIRS drew the attention of the Tribunal to Paragraph 15 (7) of the Fifth Schedule to the Federal Inland Revenue Service (Establishment) Act 2007 and urge the Tribunal to direct Multichoice Nigeria Limited to deposit with the FIRS 50 percent of the amount of the Assessment under Appeal as security and a condition that must be fulfilled before the prosecution of the Appeal brought before TAT.

In certain defined circumstances to which the Multichoice appeal fits, Paragraph 15 (7) of the Fifth Schedule to the Federal Inland Revenue Service (Establishment) Act 2007 (FIRS Act) requires persons or companies seeking to contest a tax assessment to pay all or a stipulated percentage of the tax assessed before they can be allowed to argue their appeal contesting the assessment at TAT.

Multichoice Nigeria Limited filed the matter at the Lagos TAT following its dispute over FIRS’ issuance of Notices of Assessment and Demand Note in the sum of N1,822, 923,909,313.94k on April 7, 2021.

The amount constitutes what the FIRS calculated as due in taxation to the Federal Government of Nigeria from Multichoice after an investigation over several months to determine the extent to which Multichoice has been evading taxes in Nigeria.

At Tuesday’s hearing of the matter in Appeal No: TAT/LZ/CIT/062/2021 19/08/2021 (Multichoice Nigeria Limited v. Federal Inland Revenue Service), Multichoice Nigeria Limited amended its Notice of Appeal and thereafter sought through its counsel, Bidemi Olumide of AO2 Law Firm for an adjournment of the proceedings to enable it to respond to the FIRS’ formal application for accelerated hearing of the Appeal and prayer before the TAT directing Multichoice to produce before the Tribunal the integrated Annual report and Management Account Statements of Multichoice Group Ltd for Tax Years 2012 to 2020., among other prayers.

In response, the FIRS Counsel asked TAT to issue an order requiring that Multichoice makes the statutory deposit of 50 percent of the disputed sum.

After hearing arguments from both sides, TAT upheld the FIRS submission and directed Multichoice Nigeria Limited to deposit with the FIRS an amount equals to 50 percent of the Assessment under the Appeal plus a sum equal to 10 percent of the said deposit as a condition precedent for further Hearing of the Appeal.

Thereafter, TAT adjourned the Appeal to 23 September 2021 for the report of compliance with its Order and continuation of the hearing, subject to compliance with the Tribunal’s order.

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Why Toyota Retains Lead in Car Sales Globally Amidst Chip Shortages

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Toyota Car - Investors King

Japanese car manufacturer, Toyota on Friday said its vehicle car sales in 2021 surged by 10.1 percent, beating German counterpart, Volkswagen and Electric Vehicle, Tesla to having the highest sales record in the world.

Maintaining the top sales record for two years in a row, Toyota Motor Co. stated that it sold 10.5 million vehicles in 2021, including those by affiliates Daihatsu Motors and Hino Motors.  That is 5 percent fewer than the number sold in 2020, its lowest sales figures in 10 years, and more than 8.88 million vehicles delivered by Volkswagen AG within the same year.

Toyota clinched the position for the first time in five years in 2020, with CEO, Akio Toyoda describing the company’s operations unit as higher than that of the EV, Tesla.

Toyoda said, “What we have and what Tesla doesn’t have is the units in operation more than 100 million vehicles out in the world.”

The company still records success despite disruptions which include the pandemic, shortages in semiconductor chips supply and a large competitive market.

Many car manufacturers in Asia and especially Europe have had to reduce output in 2021 especially due to the shortage of semiconductor chips used in vehicles for critical functions, such as sensing, safety features, power management, displays and control.

According to analysts at the Society of Motor Manufacturers and Traders (SMMT), the impact of the chip shortages, created by pandemic-related shutdowns of factories in the Far East, is expected to reduce later this year. The problem may likely continue up till 2023, they said.

Investors King learnt that one reason the Japanese car maker has an upper hand could be as a result of the presence of top chip manufacturing company, the Taiwan Semiconductor Manufacturing Co. (TSMC) in Japan. Also, electronic manufacturers in Asian countries like China and South Korea, including Taiwan produce more semiconductors than any region in the world.

According to the Wall Street Journal, the TSMC announced that it will build a chip manufacturing plant in Japan to boost its production levels during the global semiconductor shortage that’s affecting industries of all types.

Although Toyota’s sales soared last year, the company has said it may likely fall short of a production target of 9 million vehicles in the business year that ends on March 31st because of disruptions linked to COVID-19. The company is also set to release its third-quarter earnings on Feb 9, this year.

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Reps Call For Suspension of E-invoice Policy, Say CBN Notice Too Short

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e-invoice - Investors King

The House of Representatives has enjoined the Central Bank of Nigeria (CBN) to suspend the planned enforcement of the use of electronic invoice for import and export transactions.

The lower legislative chamber in Nigeria pointed out that the timeframe given for modification to the new e-invoice policy is short.

During its plenary session on Thursday, the representatives resolved that a 90 days timeline should be given for a new fiscal/monetary policy implementation as this will help the stakeholders adjust accordingly and reduce its effect on the economy. 

Investors King had earlier reported that the CBN said the hard copy final invoice would not be accepted from February 1 as it will be replaced with e-valuator and e-invoice as part of the documents needed for all import and export transactions.

According to CBN, the electronic invoice was introduced to get accurate value from imports and exports in the country.

It explained that the e-invoice for import and export operations must be authenticated by the Authorised Dealer Banks (ADBs) on the Nigeria single-window portal –Trade Monitoring System. 

Leke Abejide, a Kogi State lawmaker who sponsored the motion at the House of Representatives argued that the policy did not give adequate time for stakeholders’ discussion so that distortion of the economy can be averted.

The chairman, committee on customs and excise, Abejide stated that the apex bank has shifted its focus from initiating monetary policy measures to providing fiscal policy measures, which is the role of the ministry of finance.

He further said the main stakeholders in the ports and relevant sectors must be given enough time to study and understand the policy to avoid distortion in prices of commodities, delay in import and export transactions as well as ports congestion.

In his words, “Sudden monetary/fiscal circular hurriedly or half-haphazardly implemented often leads to policy summersault hence major policy change such as this.

“Importers and exporters in the manufacturing, mining and trading sectors would be affected because as the exceptions indicate that all exporters and importers with a cumulative invoicing value equal to or above $500,000 or its equivalent in foreign currency would be affected which is practically impossible to have anyone below this value cumulatively.”

The lawmakers harmoniously adopted the motion. They urged the CBN to sensitise the public on the new policy to ascertain its workability in seaports, airports, and border stations across the country.

The CBN Governor, Godwin Emefiele, was thereafter invited to appear before its committee to speak more on the policy, especially its effect on the Nigeria Customs revenue generation.

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Nestle to Invest $1.4bn to Boost Cocoa Production, Farmers’ Income, Lessen Child Labour

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Top chocolate producer, Nestlé has revealed plans to continue expanding its cocoa sustainability efforts, through investing a combined $1.41 billion by 2030.

The investment, which is thrice Nestlé’s current annual investment, is part of an innovative income accelerator program, which aims to improve the livelihoods of cocoa farming families in West Africa.

According to the Swiss international food and drink processing firm, the program covers cash incentives for farming families to reduce the level of high child labour, especially in cocoa-growing nations like Ivory Coast, Ghana, etc.

The University of Chicago, in a recent study, disclosed that about 45% of children in agricultural households in Ivory Coast and Ghana cocoa farming areas were engaged in child labor.

Recently, chocolate-producing companies have come under pressure by the United Nations International Children’s Emergency Fund and other global organisations to invest in cocoa-farming communities facing dire challenges, including widespread rural poverty, lack of access to financial services and basic infrastructures like water, health care, and education. These are factors that increase child labour as children support their families in cocoa production.

Nestlé’s cash incentives will be paid directly to cocoa-farming households for certain activities such as enrollment of children in school, the company stated.

The company’s CEO, Mark Schneider during a webcast on Thursday said, “Nestle’s new initiative focuses on the root causes for child labour and the living income gap farmers and their families face… Our goal is to have an additional tangible, positive impact on a growing number of cocoa-farming families, especially in areas where poverty is widespread and resources are scarce, and to help close the living income gap they face over time.

“Building on our longstanding efforts to source cocoa sustainably, we will continue to help children go to school, empower women, improve farming methods and facilitate financial resources. We believe that, together with governments, NGOs, and others in the cocoa industry, we can help improve the lives of cocoa farming families and give children the chance to learn and grow in the safe and healthy environment they deserve.”

The KitKat Chocolate and Smarties confectionery producer stated that the Accelerator Program will aid the company to transform its global sourcing of cocoa through a fully traceable, directly sourced supply chain by 2025.

In 2021, 51% of the cocoa Nestlé used was directly sourced and traceable, versus 46% in 2020. By 2025, the company expressed that it fully wants to trace 100% of its cocoa back to specific farms under its in-house sustainability scheme, the Nestle Cocoa Plan.

“We’re very confident this will be a game changer on the road to reducing the risk of child labour,” Nestlé Head of Operations, Magdi Batato said in an interview with Reuters.

To qualify for the payments from Nestle, farmers must send their children to school, prune cocoa trees, plant shade trees and diversify their income with other crops or livestock.

Then each farmer, irrespective of the tonnes of cocoa produced by them, will directly receive cash payments via mobile transfer of up to 500 Swiss francs ($543) a year.

This, according to Batato represented 20-25% of a farmer’s average annual income. The incentive will then be levelled at 250 francs after two years and progressively extended to all of Nestle’s 160,000 cocoa farmers by 2030.

In an interview, Nestlé Head of Confectionery, Alexander von Maillot said, “An incentive to the household is much more inclusive of the smaller farmers, really making sure that nobody gets left out.”

To ensure that children really are attending school and farmers are following the rules, Nestlé disclosed that The Sustainable Trade Initiative will monitor the programme with other third parties. It also explained that children helping on family farms outside of school time do not fall under the International Labour Organization’s description of child labour.

 

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