Economy
How Nigeria Can Raise Additional $40bn from Tax—Elumelu
By Dipo Olowookere
Chairman of Heirs Holdings, Mr Tony Elumelu, hinted that the Nigerian government can generate more revenue, up to $40 billion from tax.
He said government must executive reaching tax reforms, while the National Assembly must urgently pass the Executive Tax bill into law for the country to experience economic transformation.
Mr Elumelu, who was a guest speaker at the 21st Annual Tax Conference of the Chartered Institute of Taxation of Nigeria (CITN) titled National Development: Unlocking the Potentials of Taxation, said the present tax system was killing small business owners.
Quoting a young entrepreneur beneficiary of the Tony Elumelu Foundation, Mr Elumelu said, “The average business owner in Nigeria is a local government authority on his own because he caters for his own electricity with generators, he builds his own borehole, handles his own waste disposal, and the government can make his life easier by creating favourable tax policies that support SMEs.”
The Chairman of United Bank for Africa (UBA) Plc said, “The average number of taxes businesses pay in Nigeria is 48, compared to 33 in other Sub-Saharan countries. In Hong Kong, it’s just 3. Multiple taxation remains a significant burden for SMEs and corporates operating in the country.”
Continuing, he noted that, “With a population of close to 200 million people in Nigeria, we have only 75,000 registered SMEs in the country. No one needs to tell us that people are avoiding tax or refusing to be a part of the system.”
He said with high cost of compliance, complex and costly business registration processes, many SMEs are choosing to remain informal, which in turn results in a low tax base and low tax contribution to GDP.
“Nigeria’s tax to GDP ratio is only circa 6%, compared to far smaller populations like Rwanda at 16%. Imagine the economic transformation we can achieve as a country if we can move our Tax to GDP ratio by 10%. We will raise an additional $40billion in government revenue – identical to the sum of our foreign reserves,” Mr Elumelu explained.
He advised government to educate, inform and raise tax awareness, saying, “Government should drive mass mobilisation of citizens – let citizens know why they need to pay taxes and give them the assurance that their tax will be properly utilised.”
In addition he stated that, “government should employ the use of smart tax incentives to attract and incentivise local and foreign investors.”
Mr Elumelu also tasked the country’s ambassadors and embassies with a two year timeline to increase the number of double tax treaties between host countries and Nigeria.
“Nigeria has 14 taxation treaties while a country like South Africa has 79 double taxation treaties, and we are the largest economy in Africa. Our embassies should adopt a target in the next two years to sign tax treaties with our top 100 trading partners in the world,” he said.
Speaking as the leading proponent of entrepreneurship in Africa and an advocate for entrepreneurs, Mr Elumelu charged government to put in place tax systems to encourage SMEs-— the engine for job creation in the economy.
“Until there is a reduction in what SMEs pay as tax, elimination of multiple taxation, abolition of minimum income tax and excess dividend tax, it will be difficult for us to expand the tax base. It will be difficult for us to attract investors into this country, and it will be difficult for us to retain the ones already in the country. It will be difficult for us to mobilise our SMEs to help create employment that we need so much in this country. It will be difficult for us to have the citizens hold leaders accountable.”
In conclusion, he reminded the National Assembly members of their mandate in office, “We must encourage government to pass the Executive Bill immediately. Let’s get the National Assembly to fulfil their obligation to society and pass the bill immediately, so we can start making progress”.
Speaking in response to the presentation, Former President of the Chartered Institute of Taxation in Nigeria, Chief Mark Anthony Dike emphasized the urgency for the Executive Tax bill to be passed into law.
He said: “Every year during the military regime, there was a Finance Miscellaneous Provision Decree aimed at looking at what has happened and review the areas that need to be amended. As they say, the taste of the pudding is in the eating. We may conceptualise, but in order to know the efficacy of a theory, we have to test it. Until the provision of the Executive order is tested, we cannot know how efficacious it will be.”
Also present at the event were Dr Ikemefuna Nwobodo, President, Chartered Institute of Taxation in Nigeria, Permanent Secretary, Ministry of Finance, Dr Mahmud Isa-Dutse, Mr Babatunde Fowler, Executive Chairman, Federal Internal Revenue Service, Mr Ayo Subair, Chairman, Lagos Internal Revenue Services, Members of the council of CITN and the Auditor General of the Federation, Mr Anthony Ayine.
By Dipo Olowookere
Investors at the Nigerian Exchange (NGX) Limited have continued to show excitement for the full-year earnings of companies on the exchange so far.
On Friday, Customs Street further appreciated by 1.01 per cent as more organization released their financial statements for the 2025 fiscal year.
During the session, traders continued their selective trading strategy, with the energy sector going up by 2.47 per cent at the close of business despite profit-taking in the banking counter, which saw its index down by 0.11 per cent.
Yesterday, the insurance space grew by 2.16 per cent, the industrial goods segment expanded by 1.70 per cent, and the consumer goods industry jumped by 0.42 per cent.
Consequently, the All-Share Index (ASI) increased by 1,722.13 points to 171,727.49 points from 170,005.36 points, and the market capitalisation soared by N1.106 trillion to N110.235 trillion from the N109.129 trillion it ended on Thursday.
Business Post reports that there were 59 appreciating stocks and 19 depreciating stocks on Friday, representing a positive market breadth index and strong investor sentiment.
The trio of Omatek, Deap Capital, and NAHCO gained 10.00 per cent each to sell for N2.64, N6.82, and N136.40 apiece, as Zichis and Austin Laz appreciated by 9.98 per cent each to close at N6.72 and N5.40, respectively.
Conversely, The Initiates depreciated by 9.74 per cent to N19.45, DAAR Communications slumped by 7.32 per cent to N1.90, United Capital crashed by 6.55 per cent to N18.55, Coronation Insurance lost 5.71 per cent to quote at N3.30, and First Holdco shrank by 5.53 per cent to N47.00.
The activity chart showed an improvement in the activity level, with the trading volume, value, and number of deals up by 33.77 per cent, 93.27 per cent, and 10.63 per cent, respectively.
This was because traders transacted 953.8 million shares worth N43.1 billion in 51,005 deals compared with the 713.0 million shares valued at N22.3 billion traded in 46,104 deals a day earlier.
Fidelity Bank was the most active with 92.4 million units sold for N1.8 billion, Chams transacted 69.2 million units valued at N310.9 million, Deap Capital exchanged 59.1 million units worth N382.7 million, Access Holdings traded 57.2 million units valued at N1.3 billion, and Tantalizers transacted 48.6 million units worth N228.2 million.
By Adedapo Adesanya
The value of the Naira contracted against the United States Dollar on Friday by 13 Kobo or 0.01 per cent to N1,366.19/$1 in the Nigerian Autonomous Foreign Exchange Market (NAFEX) from the previous day’s value of N1,366.06/$1.
According to data from the Central Bank of Nigeria (CBN), the Nigerian currency also depreciated against the Pound Sterling in the same market window yesterday by N2.37 to N1,857.75/£1 from the N1,855.38/£1 it was traded on Thursday, and further depleted against the Euro by 57 Kobo to close at N1,612.52/€1 versus the preceding session’s N1,611.95/€1.
In the same vein, the exchange rate for international transactions on the GTBank Naira card showed that the Naira lost N8 on the greenback yesterday to N1,383/$1 from the previous day’s N1,375/$1 and at the black market, the Nigerian currency maintained stability against the Dollar at N1,450/$1.
FX analysts anticipate this trend to persist, primarily influenced by increasing external reserves, renewed inflows of foreign portfolio investments, and a reduction in speculative demand.
In the short term, stability in the FX market is expected to continue, supported by policy interventions and improving market confidence.
Nigeria’s foreign reserves experienced an upward trajectory, increasing by $632.38 million within the week to $46.91 billion from $46.27 billion in the previous week.
The Dollar appreciation this week appears to be largely technical, serving as a correction to the substantial losses experienced from mid- to late January.
Meanwhile, the cryptocurrency market slightly appreciated, with Bitcoin (BTC) climbing near $68,000, up nearly 5 per cent since hitting $60,000 late on Thursday after investor confidence in crypto’s utility as a store of value, inflation hedge, and digital currency faltered.
The sell-off extended beyond crypto, with silver plunging 15 per cent and gold sliding more than 2 per cent. US stocks also fell.
The latest recoup saw the price of BTC up by 4.7 per cent to $67,978.96, as Ethereum (ETH) appreciated by 6.3 per cent to $2,021.10, and Ripple (XRP) surged by 9.5 per cent to $1.42.
In addition, Solana (SOL) grew by 7.3 per cent to $85.22, Cardano (ADA) added 6.1 per cent to trade at $0.2683, Dogecoin (DOGE) expanded by 5.4 per cent to $0.0958, Litecoin (LTC) rose by 5.2 per cent to $53.50, and Binance Coin (BNB) jumped by 2.3 per cent to $637.79, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
By Adedapo Adesanya
Oil prices settled higher on Friday as traders worried that this week’s talks between the US and Iran had failed to reduce the risk of a military conflict between the two countries.
Brent crude futures traded at $68.05 a barrel after going up by 50 cents or 0.74 per cent, and the US West Texas Intermediate (WTI) crude futures finished at $63.55 a barrel due to the addition of 26 cents or 0.41 per cent.
Iran and the US held negotiations in Muscat, the capital of Oman, on Friday to overcome sharp differences over Iran’s nuclear programme.
It was reported that the talks had ended with Iran’s foreign minister saying negotiators will return to their capitals for consultations and the talks will continue.
Regardless, the meeting kept investors anxious about geopolitical risk, as Iran wanted to stick to nuclear issues while the US wanted to discuss Iran’s ballistic missiles and support for armed groups in the region.
Any escalation of tension between the two nations could disrupt oil flows, since about a fifth of the world’s total consumption passes through the Strait of Hormuz between Oman and Iran.
Saudi Arabia, the United Arab Emirates, Kuwait and Iraq export most of their crude via the strait, as does Iran, which is a member of the Organisation of the Petroleum Exporting Countries (OPEC).
According to Reuters, Iran objected to the presence of any US Central Command (CENTCOM) or other regional military officials, saying that would jeopardise the process.
The current confrontation was sparked by more than two weeks of unrest in Iran that saw authorities launch a deadly crackdown that killed thousands of civilians and shocked the world. As reports of the deaths trickled out of Iran, US President Donald Trump threatened to strike Iran if any of the tens of thousands of protesters arrested were executed.
Meanwhile, Kazakhstan’s planned oil exports could fall by as much as 35 per cent this month via its main route through Russia, as the country’s top oil company, Tengiz oilfield, slowly recovers from fires at power facilities in January.
ING analysts have pointed out Iran’s neighbour, Iraq, and a disagreement with the US as another bullish factor for oil prices. It seems Iraqi politicians favour Mr Nouri al-Maliki as the country’s next Prime Minister, but the US thinks Mr al-Maliki is too close to Iran. President Trump has already threatened the oil producer with consequences if he emerges as PM.
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