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Inflation is Now Biggest Concern for Investors in 2022: deVere CEO

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The debate, says the CEO of a global financial giant, about whether inflation is ‘transitory’ or not is now over and investors should review their investments.

The warning from Nigel Green, chief executive of deVere Group, which has $12bn under advisement, comes as the Bank of England on Thursday raised UK interest rates for the first time in more than three years in an effort to combat surging inflation.

The BoE’s Monetary Policy Committee voted 8-1 in favor of the increase to 0.25%.

The move follows the U.S. Federal Reserve in a meeting on Wednesday setting the stage for earlier, faster interest rate hikes as inflation soars. The U.S. central bank is now forecasting three rate increases next year.

Elsewhere, China’s factory-gate prices grew at the fastest pace in 26 years and consumer-price inflation has exceeded expectations.

Mr Green says: “From the UK to the U.S., China to Europe, amongst most other economies, inflation risks are real. And they’re building.

“This will increasingly rattle the markets.

“Throughout 2021, the debate was whether soaring inflation is ‘transitory.’  This debate is now over.

“Why? Because the fallout from the pandemic has also not been ‘transitory.’ Ongoing supply issues, new variants, and global disparities in dealing and managing them, has resulted in prices having to rise.”

He continues: “As inflation now becomes the biggest issue for investors, the debate throughout 2022 will shift on to how to manage it.

“There are real opportunities to be had, but navigating the territory is set to become more complex in the coming months as we move towards a new era of interest rate normality.

“There will be a steady flow of interest rate hikes from most major central banks throughout 2022.”

Last month he opined that this is “the hardest time to be an investor and worst time not to be.”

Investors, he says, should remain in the market, but they should review their portfolios to ensure that they are properly diversified across asset class, sectors, regions and currencies.  This will ensure they are best positioned for any eventuality in the current investment landscape.

Mr Green concludes: “Inflation is set to be the number one investment headwind facing us in 2022. Now is the time to review portfolios.”

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Economy

Nigeria Sees 9.11% Increase in VAT Revenue, Generating N1.56 Trillion in Q2 2024

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The federal government in the second quarter of 2024 generated a total of N1.56 trillion from Value Added Tax. This is a 9.11 percent increase from the N1.43 trillion in Q1 2024.

According to the National Bureau of Statistics report, local payments recorded were N792.58 billion, foreign VAT payments were N395.74 billion, while import VAT contributed N372.95 billion in Q2 2024.

“On a quarter-on-quarter basis, human health and social work activities recorded the highest growth rate with 98.44%, followed by agriculture, forestry and fishing with 70.26%, and water supply, sewerage, waste management and remediation activities with 59.75%,” NBS reported.

“On the other hand, activities of households as employers, undifferentiated goods and services producing activities of households for own use had the lowest growth rate with 46.84%, followed by Real estate activities with 42.59%.

“In terms of sectoral contributions, the top three largest shares in Q2 2024 were
manufacturing with 11.78%; information and communication with 9.02%; and Mining and quarrying with 8.79%.

“Nevertheless, activities of households as employers, undifferentiated goods- and services-producing activities of households for own use recorded the least share with 0.00%, followed by activities of extraterritorial organisations and bodies with 0.01%; and Water supply, sewerage, waste management and remediation activities with and real estate services 0.04% each.

“However, on a year-on-year basis, VAT collections in Q2 2024 increased by 99.82% from Q2 2023.”

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Finance Minister Denies VAT Hike, Confirms Rate Remains at 7.5%

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Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, on Monday, debunked reports doing the rounds that the rate for Value-Added Tax (VAT) has been upwardly adjusted to 10% from 7.5%.

The Minister, in a statement signed by him, affirmed that VAT rate as contained in relevant tax laws and chargeable on goods and services remains 7.5%.

“The current VAT rate is 7.5% and this is what government is charging on a spectrum of goods and services to which the tax is applicable. Therefore, neither the Federal Government nor any of its agencies will act contrary to what our laws stipulate.

“The tax system stands on a tripod, namely tax policy, tax laws and tax administration. All the three must combine well to give us a sound system that gives vitality to the fiscal position of government.

“Our focus as a government is to use fiscal policy in a manner that promotes and enhances strong and sustainable economic growth, reduces poverty as well as makes businesses to flourish.

“The imputation in some media reports on the issue of VAT and the opinion articles that have sprouted from them seem to wrongly convey the impression that government is out to make life difficult for Nigerians. That is not correct. If anything, the Federal Government has, through its policies, demonstrated that it is committed to creating a congenial environment for businesses to thrive.

“In fact, it is on record that the Federal Government, as part of efforts to bring relief to Nigerians and businesses, recently ordered the stoppage of import duties, tariffs and taxes on rice, wheat, beans and other food items.

“For emphasis, as of today, VAT remains 7.5% and that is what will be charged on all the goods and services that are VAT-able,” Edun said

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Nigeria to Raise VAT to 10% Amid Revenue Crisis, Says Fiscal Policy Chairman

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Value added tax - Investors King

Taiwo Oyedele, Chairman Presidential Fiscal Policy and Tax Reforms Committee, has said the committee working on increasing the Valued Added Tax (VAT) from the current 7.5% to 10%.

Oyedele announced this during an interview on Channels TV’s Politics Today.

According to Oyedele, the tax law the committee drafted would be submitted to the National Assembly for approval.

He also said his committee was working to consolidate multiple taxes in Nigeria to ensure tax reduction.

He said, “We have significant issues in our tax revenue. We have issues of revenue generally which means tax and non-tax. You can describe the whole fiscal system in a state that is in crisis.

“When my committee was set up, we had three broad mandates. The first one was to look at governance: our finances as a country, borrowing, coordination within the federal government and across sub-national.

“The second one was revenue transformation. The revenue profile of the country is abysmally low. If you dedicate our whole revenue to fixing roads it will be insufficient. The third is on government assets.

“The law we are proposing to the National Assembly has the rate of 7.5% moving to 10% from 2025. We don’t know how soon they will be able to pass the law. Then subsequent increases are also indicated in terms of the year they will kick in.

“While we are doing that, we have a corresponding reduction in personal income tax. Anybody that is earning about N1.5 million a month or less, they will see their personal income tax come down. Companies will have income tax rate come down by 30% over the next two years to 25%. That is a significant reduction.

“Other taxes they pay are quite many: IT levy, education tax, etc. All these we are consolidating into a single one. They will pay 4% initially. That will go down to 2& in the next few years.”

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