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Stamp Duty: RMAFC Gets Approval to Probe Banks

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  • Stamp Duty: RMAFC Gets Approval to Probe Banks

The Revenue Mobilisation Allocation and Fiscal Commission has secured the approval of the National Economic Council to probe banks over the collection of stamp duties, an investigation has shown.

Our correspondent learnt that the probe would involve a forensic investigation of the funds that have so far accrued to the Federal Government through the electronic collection of stamp duties by banks.

The Nigerian Postal Service, operators of the Stamp Duty Act 2004, had not been satisfied with what the banks had remitted as the total collection from stamp duties.

Postmaster General of the Federation, Mr Bisi Adegbuyi, had written to the Governor of the Central Bank of Nigeria, Mr Godwin Emefiele, on the state of the stamp duties being collected on behalf of the Federal Government.

In the letter, Adegbuyi had informed the CBN boss of the decision to carry out a forensic audit to determine how much banks had deducted from the accounts of their customers in order to compare it with what had been remitted by the banks into the Stamp Duty Account.

Subsequently, NIPOST advertised for forensic auditors that would help it carry out the probe of the banks that had been deducting N50 on every deposit with a value of N1, 000 and above since January 2016.

The process was aborted when RMAFC raised an objection of jurisdiction. However, the two organisations had since been working with the Office of the Accountant General of Federation in order to make the probe possible.

Since the beginning of the collection of electronic stamp duties in January 2016, a total of N30bn had been realised through the collection of stamp duties by the banks (as of December 31, 2018).

This, however, was grossly lower than the expectation of both the government and the postal authorities. Before the operationalisation of the duty, NIPOST had estimated that proper application and collection would see the government collecting about N475bn per annum from the duty, as a study by a private firm had shown.

The Central Bank of Nigeria had through a circular issued on January 15, 2016, directed banks to deduct N50 stamp duty on deposits made into bank accounts with a value of N1,000 and above in order to boost government revenue drive and in compliance with Stamp Duty Act 2004.

The apex bank also anchored its directive on a court ruling obtained by Kasmal International Services Limited in 2014 to the effect that the 22 banks operating in the country should remit more than N6tn to NIPOST through the company as stamp duty they were supposed to have collected since the Stamp Duty Act was passed into law.

However, ruling on an appeal filed by Standard Chartered Bank against Kasmal International Services Limited and 22 others, Justice Ibrahim Saulawa, and four other justices of the Court of Appeal, Lagos Judicial Division, held that the Stamp Duty Act 2004 did not impose a duty on DMBs to deduct N50 on bank deposits.

According to the Appeal Court, electronic transactions were not covered in the Stamp Duty Act of 2004. The ruling of the court has not stopped some banks from deducting the stamp duty on deposits of N1, 000 and above.

The Federal Government is currently in the process of securing new legislation that would expressly spell out that stamp duty should be deducted on electronic transactions.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

Waltersmith’s 5,000bpd Modular Refinery in Imo State to Commence Operations

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5,000bpd Modular Refinery Built in Imo State to Start Operations

The Department of Petroleum Resources (DPR) has said the 5,000 barrels per day Modular Refinery project built in Imo State is ready for operations.

Sarki Auwalu, the Director, DPR, disclosed this during a pre-commissioning visit to the project site in Ibigwe, Imo State.

In a statement released by Waltersmith, Auwalu was quoted as saying the purpose of his visit was to ensure that the refinery was ready to commence operations.

He said “We can confirm that the refinery is very much ready to commence operations. We have seen all the preparations.

“To us, the plant is alive. The commissioning is just symbolic. Everywhere is ready to start off. My overall assessment is excellent.

“We have been to other modular refineries but we have not seen anything like this – the space, the way it is arranged and the way it will work.”

The 5,000 barrels per day modular refinery is scheduled for inauguration this month. The refinery has crude oil storage capacity of 60,000 barrels and it is expected to deliver more than 271 million litres per year of refined petroleum products.

Auwalu said, “The role we play is to enable businesses and create opportunities. When DPR issues you a licence, it enables you to invest and as a result of that opportunity we create, that business is enabled.

“Waltersmith is one of our success stories. We consider the project as ours. We have been tracking their growth and we are happy to see that our child is growing. It is our plan that they expand and they have the potential.”

Speaking on the project, Abdulrasaq Isah, the Chairman, Waltersmith Refining and Petrochemical Company, said the project is the first phase of a series of refinery projects that will lead to the delivery of up to 50,000 barrels per day in refining products.

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OPEC Fund, West African Development Bank Agree to Improve Corporation in West Africa

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OPEC Fund and West African Development Bank (BOAD) Agreed to Deepen Corporation in West Africa

The West African Development Bank (BOAD) and the OPEC Fund for International Development have signed an agreement to further deepen their development corporation in the member nations of the Western African Economic and Monetary Union (WAEMU).

The member nations include Benin, Burkina Faso, Côte-d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo.

According to the statement released by the two organisations, the agreement reached will increase engagement and knowledge-shareing between the two institutions and ensures improved cooporation in terms of co-financing public and private sector projects.

The OPEC Fund and West African Development Bank (BOAD) boost cooperation in Western Africa

The agreement focuses on increased engagement and knowledge-sharing between the two institutions and ensures enhanced cooperation in co-financing public and private sector projects.

It will also support international trade and regional trade integration to enhance economic productivity in the region. It will help mitigate the negative impact of COVID-19 on the region and strengthen the economy of the West African region.

Dr. Abdulhamid Alkhalifa, Director-General, OPEC Fund, who signed on behalf of the organisation said: “We are pleased to grow our partnership with BOAD to work together toward our common cause. West African countries have significant potential to increase trade flows and strengthen competitiveness which will drive growth, reduce poverty, and create new jobs in the region. The OPEC Fund’s global expertise, combined with BOAD’s strong regional presence, positions our two institutions well to help the region to weather the impacts of the pandemic and improve its competitiveness within the global economy.”

Serge Ekué, the President of BOAD, commended “the commitment and growing partnership between Africa and the OPEC Fund, which translated into support to BOAD for several decades now, thereby contributing to growth and sustainable development in the WAEMU member countries.” He added that the implementation of this framework agreement will help support the objectives of BOAD’s new strategic plan for 2021-2025, with the “aim of increasing the impact of its operations in terms of development outcomes by funding productive investments and creating jobs for youth and women, while focusing on micro-, small- and medium-sized enterprises (MSMEs), transport infrastructure and digitalization, agriculture and food security, energy, real estate, health and education.”

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More Stimulus is Welcomed – But What’s Needed is Smarter Stimulus

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Stock markets are cautiously upbeat that a stimulus package can be agreed in the U.S. before the November 3 election – but even if it does happen, it’s likely to be a “short-lived sticking plaster” that masks the major long-term issue: unemployment.

This is the warning from Nigel Green, CEO and founder of deVere Group, one of the world’s largest independent financial advisory and fintech organizations.

It comes as House Speaker Nancy Pelosi and Secretary Steven Mnuchin spoke again on Tuesday – the deadline imposed by the Speaker – as the two sides try and strike a deal over another significant fiscal stimulus package ahead of the election.

Earlier this month, Republican senators slammed a $1.8 trillion offer made by the Trump administration to the Democrats as too big, an offer Ms Pelosi dismissed as “insufficient.”

Discussions are due to continue on Wednesday upon the Secretary’s return to Washington.

Nigel Green warns: “No doubt, a breakthrough of the deadlock that would allow for more stimulus would provide a lifeline to millions and millions of Americans.

“U.S. and global markets are, generally, cautiously optimistic that a deal can be agreed by the two sides.

“There’s a sentiment that something will have to materialize – and this is fueling markets.

“However, the window of opportunity is closing and it is not yet a done deal.

“If talks collapse, the markets will inevitably be disappointed and there’s likely to be a short-lived sell-off.”

He continues: “Even if Pelosi and Mnuchin can get another massive stimulus package agreed, and U.S. and global markets rise, this is likely to serve only as a sticking plaster.

“A market rally is going to be difficult to be sustained due to the enormous uncertainty created by other factors including the presidential election, a possible looming constitutional crisis in the world’s largest economy, and the growing Covid-19 infections in America and other major economies.”

The deVere CEO goes on to add: “Getting over the political impasse would help boost the economy and deliver much-needed money to Americans, but the major, lasting issue triggered by the pandemic remains: mass unemployment, which will hit demand, growth and investment.

“As such, a swift rebound for the U.S. economy is doubtful as unemployment claims continue to rise.

“That V-shaped recovery talked about by so many? That will be impossible with so many millions facing long-term unemployment.”

Whilst it is certainly positive that unemployment has fallen from 15% in the U.S. to 11% in recent weeks, it should be remembered that this is still at the same rate of the 2008 crash.

In addition, a second wave of soaring unemployment could hit imminently as some support measures wind-down and business’ and households’ savings and resources have been already run-down.

Mr Green concludes: “Near-term support for sure, but a long-term strategy – a multi-year vision – for growth and investment is essential.

“What’s needed is not just more stimulus, but smarter stimulus.”

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