- Executive Order on Asset Declaration, Sign of Govt’s Seriousness on Tax Compliance
The signing of an Executive Order on Assets and Tax Declaration by the Acting President, Prof. Yemi Osinbajo, underlines the seriousness attached to the Voluntary Asset and Income Declaration Scheme (VAIDS), the Minister of Finance, Mrs. Kemi Adeosun, has said.
Adeosun said the scheme, which was launched in Abuja last week, would be vigorously implemented, adding that the federal government would deploy and heavily rely on technology to increase tax compliance
In an interview on Channels Television, the minister stated that at six per cent tax-to-GDP ratio, Nigeria’s tax compliance rate was low while most nations are at between 30 and 32 per cent.
“Prosperous nations have high levels of tax compliance while poor nations have low rates. Nigeria aspires to be a prosperous nation, so this problem must be solved,” Adeosun said.
She revealed that the government had deployed data mining to compile data on thousands of tax payers, which showed the level of non-compliance and tax evasion. Citing the Bank Verification Number (BVN), land registry and other sources within Nigeria as well as data from foreign governments, she also detailed the work of an international asset tracing firm as a source of overseas data.
“Technology has been key in enabling us to build an accurate financial profile for Nigerians and based on the information we gathered, we saw that the level of non-compliance was very high and we knew we had to do something about it.
“In the past, tracking true income and assets would have been difficult but now, it is at the touch of a button,” she said.
The minister revealed that further information would automatically become available in 2018 under the Automatic Exchange of Information, to which Nigeria is a party, stressing that Nigeria will automatically get information through tax authorities of various countries.
“What VAIDS is doing is giving tax payers, both companies and individuals, a window of opportunity to regularise, to come clean so to speak, to declare fully, to declare honestly.
“In exchange for full and honest declaration, what we are assuring is that we will waive penalties that should have been levied, waive the interest that should have been paid on overdue tax which is quite considerable, those who declare honestly will not be subject to any investigation or tax audit,” she explained.
VAIDS, she added, is also to help increase tax awareness and education.
“The Community Tax Liaison Officers (CTLO), who are graduates recruited through the N-Power programme, would go into their communities, schools and other public places to raise awareness and help increase tax enrollment. We are recruiting a total of 7,500 CTLOs through this scheme,” Adeosun stated.
The minister gave details of the ‘Tax Thursdays’ programme which will operate for the next one year, as announced by the Osinbajo and would see tax awareness activities at state and federal government level to improve tax education and increase the number of tax payers from the current 14 million out of 69.9 million who are economically active.
The minister gave assurances of the judicious use of funds, saying that “tax payment is part of the civic partnership between people and government which would enhance participation and accountability.”
On the confidentiality of information generated on individuals, she assured that “all information collected would be treated as strictly confidential and our doors are open. We understand that some people have significant declarations and people can walk in to speak with me. We have already started receiving inquiries.”
Barclays Tell High Net Worth Investors to Shun Africa and Other Emerging Economies
Barclays to High Net Worth Clients, Stay Off Africa and Other Emerging Economies
Barclays, one of the world’s largest investment banks, has started advising high net worth clients to stay off Africa and other emerging economies.
According to Barclays, despite the recent recovery noticed in emerging-market stocks, investors are better off avoiding the risks that still abound in emerging nations. Barclays Plc, however, advised high net worth clients to focus on U.S equities despite the S&P’s breakneck rally.
The investment bank said emerging economies do not have enough fiscal buffers to spend their way out of the COVID-19 pandemic and will likely continue to struggle in the near-time compared to the US with 12 percent of gross domestic product fiscal-support.
It said the huge US stimulus may halt rebound in emerging-markets stocks as more money is expected to flow into the world’s largest economy and its European counterparts.
“Compared to the U.S., emerging-market economies appear more vulnerable,” said Haider, the London-based managing director and head of global growth markets. “Their central banks have less room to maneuver, their governments may not be able to provide unlimited support and equity markets, given their sector mix, can be more challenged by an economic slowdown.”
Barclays added that even after 33 percent rebound in stocks of emerging markets since the panic selloff subsided in March, stocks are still down by 9 percent from year-to-date while the US S&P 500 stocks are up by 45 percent. Presently, their stocks trading at a 36 percent discount to US stocks, up from 25 percent three months ago.
Crude Oil Rises to $43.1 Per Barrel on Production Cuts Extension
Crude Oil Hits $43.1 Per Barrel Following OPEC’s Production Cuts Extension
Brent crude oil, against which Nigerian oil price is measured, rose by 1.25 percent on Monday during the Asian trading session following OPEC and allies’ agreement to extend crude oil cuts to the end of July.
OPEC and allies, known as OPEC plus, agreed to extend production cuts of 9.7 million barrels per day reached in April to July on Saturday.
In the virtual conference, delegates agreed that members, including Nigeria and Iraq presently struggling to attain a 100 percent compliance level must keep to the agreement or be forced to do so in subsequent months.
Nigeria, Iraq and others failed to keep to the cartel’s agreement in May after reports show that Nigeria only managed to attain a 19 percent compliance level during the month while Iraq struggled to attain just 38 percent in the same month.
Russia and Saudi Arabia, the two largest producers of the group, warned members to stick to the agreed quota if they want to rebalance the global oil market.
“While the errant producers such as Iraq and Nigeria have vowed to reach 100% conformity and compensate for prior underperformance, we still think they will likely continue to have some commitment issues over the course of the summer,” said Helima Croft, head of global commodity strategy at RBC Capital Markets.
“The potential return of Libyan output could also cause considerable challenges for the OPEC leadership.”
Earlier on Monday, Brent crude oil hits $43.1 per barrel, more than a month record-high, before pulling back slightly to $42.83 per barrel.
Gold Dips by 2 Percent on Better Than Expected Job Report
- Gold Dips by 2 Percent on Better Than Expected Job Report
Gold prices declined by 2 percent on Friday following a better than expected US non-farm payroll report.
The report showed an increase of 2.5 million payroll numbers against a decline of 7.5 million predicted by many experts.
The surprise number boosted investors’ confidence in US recovery as many dumped their haven investment (gold) for the stock market.
“We had significantly stronger-than-expected U.S. payroll numbers – an increase of 2.5 million versus an expectation of a decline of 7.5 million – that 10-million swing has brought forward expectations of the economic recovery in the United States,” said Bart Melek, head of commodity strategies at TD Securities.
Spot gold immediately declined by 1.9 percent per ounce to $1,678.81 while the U.S. gold futures slid 2.6 percent to settle at $1,683.
Gold was also being pressured by stronger yields and a slightly firmer dollar, “meaning the opportunity cost to hold gold in the portfolio has gone up,” Melek added.
The surprise didn’t stop there, US Dow Jones was up 614 points despite the protest going on the US and US-China tension.
Also, NASDAQ rose by 29 points while the S&P index added 50 points increase.
Note: Investors generally increase their investments in gold and other haven assets during a crisis to avert risk exposure and do the opposite once they sense a better economy.
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