The Pandora Papers are not representative of the wider offshore financial industry which typically helps hardworking people looking for better returns and more flexibility, says the CEO of one of the world’s largest independent financial advisory, asset management and fintech organisations.
The pushback from Nigel Green, chief executive of deVere Group, follows the leak of almost 12 million confidential documents regarding the wealth and dealings of world leaders, politicians and ultra-high-net-worth individuals over the weekend.
These include former UK Prime Minister Tony Blair, the King of Jordan, Azerbaijan’s ruling Aliyev family, Czech Prime Minister Andrej Babis, and Pakistan’s political elite, amongst many others.
Mr Green says: “When it comes to those who are in or have previously held political or royal office, and/or those who are actively seeking to break the law by hiding or ‘washing’ money, busting sanctions or evading tax, there must be complete transparency with financial dealings.
“However, the vast majority of the millions of people who use companies providing offshore financial products and services are not representative of those high-profile names that have been disclosed in the Pandora Papers.
“Indeed, the overwhelming number are hard-working, law-abiding individuals using fully legal and compliant solutions in order to seek out better returns, more options and greater flexibility.
He continues: “In my four decades of working with cross-border investors, I can confirm that the number one reason people keep money in an offshore account – which is simply an account in a jurisdiction different to the one in which the individual resides – is convenience.
“These accounts offer centralised, safe, flexible and global access to their funds regardless of where the person lives and regardless to where they may move to in the future, at the same time as offering an array of saving and investment options in a multitude of different currencies. These are important issues for those who live outside their country of origin, and who typically have transient lifestyles.”
In addition, many offshore financial hubs offer tax neutrality, resulting in protection for firms that do business in multiple jurisdictions from double taxation, says the deVere boss. Many international investors use these hubs as they can offer flexibility of corporate structures and issuance of a mix of share classes, easy incorporations and a robust legal system.
Also, these international financial centres can provide bona fide financial refuge for those in countries where there is economic, social and/or political turbulence, such as extremely volatile currency and expropriation of assets.
“I have said on many occasions, financial privacy can be needed to keep individuals and families safe. That said, there is a difference between privacy and secrecy. Exchanging information between government authorities for relevant tax matters is legitimate. Sharing financial information with anyone else is not. Privacy can be crucial. Secrecy hardly ever is,” observes Nigel Green.
“Offshore financial services provide a much needed, fully legal and in-demand service for individuals, companies, organisations, agencies and charities all over the world.”
He concludes: “The Pandora Papers illustrate that more should still be done to improve co-operation between some jurisdictions, however, they are not representative of today’s wider international financial services industry.
“Although, they should also act as an opportunity to further enhance the effectiveness and credibility of these international financial centres and the sector.
“This is especially important as the industry is set to grow exponentially in the coming years as individuals and companies seek to become ever more globalised.”
Chemical and Allied Products Plc Reports 51 Percent Increase in Revenue
Chemical and Allied Products Plc (CAP Plc) announced its Financial Results for the third quarter ended September 2021.
Revenue increased by 51 percent increase from N5 Billion in the quarter ended September 2020 to N9 Billion in September 2021. This rise in revenue was driven by an increase in the sale of paint products which rose from N6 Billion in 2020 to N9 Billion in 2021. Although distribution costs also rose during the period under review and this ate into the revenue earned.
Cost of sales however saw a massive increase from about N3 Billion in September 2020 to N6 Billion in September 2021. This was driven by a change in inventories of finished goods and work in progress which rose from N2 Billion in 2020 to N5 Billion in 2021. Royalty fees also increased from N201 Million in 2020 to N307 Million in 2021.
This saw profit for the period fall from N927 Million in 2020 to N613 Million despite the increase in revenue, a 34% drop.
Earnings per share fell from 133 kobo in September 2020 to 78 kobo in September 2021. The company declared no dividends during the period.
CAP Paint Key Financial Highlights
• Revenue of N9.1 billion, higher than prior year by 51%.
• Gross profit of N2.7billion million, with gross margin of 30%.
• Operating expenses of N2.2billion with operating expenses as a percentage of sales of 25%, a 179bps improvement from 27% prior year.
• Other income of N253million, 279% above prior year due to profit from sale of a non-core asset.
• EBIT of N710 million, with EBIT margin of 8%.
• Profit Before Tax of N851 million, with PBT margin of 9%.
• Profit After Tax of N614 million, with PAT margin of 7%.
• Increased working capital deliberately to ensure sufficient raw material availability to continue production, hence inventory increased by N2.8 billion from Dec 2020.
• Trade and other receivables increased by N366 million in line with higher revenue.
• Strong cash position of N3.3 billion, with the key movement from Dec 2020 being the N1.5 billion paid to shareholders as dividends.
Commenting on the performance, Managing Director, David Wright, stated: “The merger between Chemical and Allied Products Plc (CAP) and Portland Paints and Products Nigeria Plc (Portland Paints) was successfully completed on the 1st of July 2021 with CAP being the surviving entity.
The financial results for the third quarter of 2021 reflects the combined entity. Despite the challenging environment, we continue to generate higher sales across our product portfolio.
Revenue improvement has been driven by (i) strong volume growth, (ii) price increases and (iii) new products in our portfolio, following the merger.
Raw material cost escalation remains a key concern and we will continue to carefully assess pricing. In addition to pricing, we will focus on production and operating efficiencies in order to protect margin”.
Tax Battle: Multichoice Africa Loses Tax Appeal to FIRS
The fierce tax battle between Multichoice Africa Holdings B.V., the parent company of Multichoice Nigeria and the Federal Inland Revenue Services (FIRS) has finally been struck out by the Tax Appeal Tribunal.
The Tax Appeal Tribunal struck out the appeal instituted by Multichoice Africa Holdings B.V against the Federal Inland Revenue Services (FIRS) over the $342 Million disputed tax. Multichoice engaged FIRS over the assessment of the company’s unpaid Value Added Tax (VAT).
The Tribunal while delivering its judgment on the appeal filed by Multichoice upheld the preliminary objection of the FIRS against the appeal of Multichoice and said the South African company did not comply with Order 3 Rule 6 of the Tax Appeal Tribunal (Procedure) Rules, 2021, which requires that an appellant is to deposit half of the assessed amount it is disputing before it can be heard on appeal. In addition to depositing the sum, the appellant is required to file along with its appeal an affidavit verifying the payment, Multichoice Africa also failed to comply with this.
FIRS served Multichoice Africa Holdings B.V a notice of assessment of unpaid VAT on the 16th of June 2021, FIRS claimed that although the company provided services to its Nigerian arm, Multichoice Nigeria, it had not paid VAT since inception.
Mutichoice is not the first South African company to have a battle with the FIRS, MTN has had its squirmishes with Nigerian authorities in the past. The federal government had said the multinational telecoms firm owed taxes from 2007 to 2017. The case was referred to FIRS with a view to settling the case amicably.
Earlier in August, the telecommunications services provider announced plans to reconstruct the Enugu-Onitsha expressway under the road infrastructure tax credit (RITC) scheme.
The Road Infrastructure tax credit scheme is a public-private partnership (PPP) intervention that grants income tax credit to companies and individuals that provide funding for the refurbishment and rehabilitation of roads.
BUA Cement, GTCO, United Bank for Africa Pay N14.3 Billion in Company Income Tax in Q3 2021
Three of Nigeria’s leading corporations have revealed that they paid a combined N14,273,553,510 in Company Income Tax (CIT) in the three months ended September 30, 2021.
BUA Cement Plc, Guaranty Trust Holding Company Plc and the United Bank for Africa Plc were the listed corporations that announced via their various unaudited financial statements released this week how much that paid in the third quarter (Q3) and the year to date.
Nigeria’s Company Income Tax (CIT) rate is 30 percent for large corporations, firms with gross turnover greater than N100 million, and it is assessed on a preceding year basis – tax is charged on profits for the accounting year ending in the year preceding assessment.
Breaking down the numbers, BUA Cement paid N2.256 billion in the third quarter of 2021, an increase of 48.78 percent from N1.516 billion paid in the same quarter of 2020. The company posted a profit before tax of N24.766 billion for the quarter under review.
However, because the amount paid (or estimated to be paid) is below 30 percent stipulated in the nation’s tax law, a better explanation for the uncaptured amount, which Investors King estimated at N5.174 billion, would be the tax credit Federal Government offered BUA Cement during the period.
United Bank for Africa Plc (UBA) paid N3.152 billion in CIT in the quarter under review. A 481.5 percent jump from N542 million paid in the corresponding quarter of 2020. The leading bank realised N47.166 billion profit before tax in Q3 2021. Also, the amount captured does not include tax credit.
Guaranty Trust Holding Company Plc (GTCO Plc) paid the most CIT at N8.866 billion. GTCO Plc grew profit before tax from N57.638 billion in Q3 2020 to N58.852 billion in Q3 2021. Again, the amount paid does not reflect tax exemption.
This brings the total amount paid by the three leading corporations to N14.274 billion.
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