Economy

WTO, AfCFTA Treaties Will Shrink Nigeria’s Revenue—Customs

Published

5 years ago

21/08/2020

By Adedapo Adesanya

The Nigerian Customs Service (NCS) has complained that trade treaties that Nigeria are signed to such as the World Trade Organisation (WTO) and the African Continental Free Trade Area (AfCFTA) agreement will seriously impact on the ability of the country to generate revenue.

This assertion was made by the Comptroller General of the service, Mr Hameed Ali, on Thursday during an interactive session organized by the Senate joint committees in finance and national planning on the 2021-2023 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP).

He said the two agreements have provisions that will allow goods to come into Nigeria at zero tariffs, making it difficult to drive revenue generation that the country will need as it faces the aftermath of the coronavirus pandemic.

As a revenue-generating agency, Mr Ali noted that despite the disruptions brought about by the current crisis, the customs service has generated N837 billion as of July 2020, which is 50 per cent of its N1.68 trillion target for the year.

He added that the Service is projecting total revenue of N1.465 trillion for 2021, N1.704 trillion for 2022, and N1.758 trillion for 2023.

During the Senate session, the Comptroller General also said he is not in support of a policy arrangement which makes it possible for Coca-Cola to continue to produce in Nigeria without paying anything to the Nigerian government.

The Customs CG wondered why companies such as Coca Cola, Pepsi Cola and other non-alcoholic beverage firms were not paying taxes in Nigeria when they do in other countries where they have operations.

He noted that the defunct Interim National Government of Ernest Shonekan, granted the waivers to the carbonated drinks manufacturers in 1993 to encourage local firms.

He, however, said the policy should no longer be sustained in view of the current reality occasioned by the nation’s dwindling revenue.

“We have been pushing for the expansion of our own excise collection. During the Shonekan regime, excise was stopped for carbonated drinks manufacturers like Coca-Cola.

“The only one approved for us are tobacco alcoholic beverages. The understanding then was that tobacco and alcoholic beverages affect the health of citizens and should, therefore, be taxed.

“But we know that carbonated drinks are also injurious to the health of the people due to the high sugar content.

“Therefore, if tobacco and alcoholic beverages companies are paying tax, the carbonated drink manufacturers should also pay.

“The collection on import will reduce because of the trade agreement we have signed. So, if we don’t expand our excise, the collection from Customs will drop.”

He called on the federal government to extend its excise tax net to include carbonated drinks.

Reacting to this Senate President, Mr Ahmed Lawan said the agreement with Coca Cola is a misnomer as Coca Cola is an international brand and a dominant player in the beverage industry.

Economy

NGX Seeks Suspension of New Capital Gains Tax

Published

29 minutes ago

05/12/2025

Adedapo Adesanya

By Adedapo Adesanya

The Nigerian Exchange (NGX) Limited is seeking review of the controversial Capital Gains Tax increase, fearing it will chase away foreign investors from the country’s capital market.

Nigeria’s new tax regime, which takes effect from January 1, 2026, represents one of the most significant changes to Nigeria’s tax system in recent years.

Under the new rules, the flat 10 per cent Capital Gains Tax rate has been replaced by progressive income tax rates ranging from zero to 30 per cent, depending on an investor’s overall income or profit level while large corporate investors will see the top rate reduced to 25 per cent as part of a wider corporate tax reform.

The chief executive of NGX, Mr Jude Chiemeka, said in a Bloomberg interview in Kigali, Rwanda that there should be a “removal of the capital gains tax completely, or perhaps deferring it for five years.”

According to him, Nigeria, having a higher Capital Gains Tax, will make investors redirect asset allocation to frontier markets and “countries that have less tax.”

“From a capital flow perspective, we should be concerned because all these international portfolio managers that invest across frontier markets will certainly go to where the cost of investing is not so burdensome,” the CEO said, as per Bloomberg. “That is really the angle one will look at it from.”

Meanwhile, the policy has been defended by the chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Mr Taiwo Oyedele, who noted that the new tax will make investing in the capital market more attractive by reducing risks, promoting fairness, and simplifying compliance.

He noted that the framework allows investors to deduct legitimate costs such as brokerage fees, regulatory charges, realised capital losses, margin interest, and foreign exchange losses directly tied to investments, thereby ensuring that they are not taxed when operating at a loss.

Mr Oyedele also said the reforms introduced a more inclusive approach to taxation by exempting several categories of investors and transactions.

Economy

Food Concepts Return NASD OTC Exchange to Danger Zone

Published

10 hours ago

05/12/2025

Adedapo Adesanya

By Adedapo Adesanya

Food Concepts Plc neutralized the gains recorded by three securities, returning the NASD Over-the-Counter (OTC) Securities Exchange into the negative territory with a 0.27 per cent loss on Thursday, December 4.

Yesterday, the share price of the parent company of Chicken Republic and PieXpress declined by 34 Kobo to sell at N3.15 per unit compared with the previous day’s N3.49 per unit.

This shrank the market capitalisation of the OTC bourse by N5.72 billion to N2.136 billion from N2.142 trillion and weakened the NASD Unlisted Security Index (NSI) by 9.57 points to 3,571.53 points from 3,581.10 points.

Business Post reports that Central Securities Clearing System (CSCS) Plc went down by 50 Kobo to N38.50 per share from N38.00 per share, FrieslandCampina Wamco Nigeria Plc gained 29 Kobo to sell at N55.79 per unit versus N55.50 per unit, and Geo-Fluids Plc added 5 Kobo to close at N4.60 per share compared with Wednesday’s closing price of N4.55 per share.

Trading data indicated that the volume of securities recorded at the session surged by 6,885.3 per cent to 4.3 million units from the 61,570 units posted a day earlier, the value of securities increased by 10,301.7 per cent to N947.2 million from N3.3 million, and the number of deals went up by 146.7 per cent to 37 deals from the 15 deals achieved in the previous trading session.

At the close of business, Infrastructure Credit Guarantee Company (InfraCredit) Plc was the most traded stock by value on a year-to-date basis with the sale of 5.8 billion units for N16.4 billion, trailed by Okitipupa Plc with 170.4 million units worth N8.0 billion, and Air Liquide Plc with 507.5 million units valued at N4.2 billion.

InfraCredit Plc also finished the session as the most traded stock by volume on a year-to-date basis with 5.8 billion units transacted for N16.4 billion, followed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.2 million, and Impresit Bakolori Plc with 536.9 million units traded for N524.9 million.

Economy

Investors Gain N97bn from Local Equity Market

Published

11 hours ago

05/12/2025

Dipo Olowookere

By Dipo Olowookere

The upward trend witnessed at the Nigerian Exchange (NGX) Limited in recent sessions continued on Thursday as it further improved by 0.10 per cent.

This was despite investor sentiment turning bearish after the local equity market ended with 23 price gainers and 28 price gainers, indicating a negative market breadth index.

UAC Nigeria gained 10.00 per cent to finish at N88.00, Morison Industries appreciated by 9.94 per cent to N3.54, Ecobank rose by 8.53 per cent to N36.90, and Coronation Insurance grew by 8.47 per cent to N2.56.

On the flip side, Ellah Lakes depreciated by 10.00 per cent to N13.14, Eunisell Nigeria also shed 10.00 per cent to finish at N72.90, Transcorp Hotels slipped by 9.95 per cent to N157.50, Omatek shrank by 9.23 per cent to N1.18, and Guinea Insurance dipped by 8.46 per cent to N1.19.

Yesterday, the All-Share Index (ASI) went up by 152.28 points to 145,476.15 points from 145,323.87 points and the market capitalisation chalked up N97 billion to finish at N92.726 trillion compared with the previous day’s N92.629 trillion.

Customs Street was bubbling with activities on Thursday, though the trading volume and value slightly went down, according to data.

A total of 1.9 billion stocks worth N19.2 billion exchanged hands in 23,369 deals during the session versus the N2.3 billion valued at N21.0 billion traded in 21,513 deals a day earlier.

This showed that the number of deals increased by 8.63 per cent, the volume of transactions depleted by 17.39 per cent, and the value of trades decreased by 8.57 per cent.

For another trading day, eTranzact led the activity chart with 1.6 billion units sold for N6.4 billion, Fidelity Bank traded 31.0 million units worth N589.3 million, GTCO exchanged 28.3 million units valued at N2.5 billion, Zenith Bank transacted 27.1 million units for N1.6 billion, and Ecobank traded 21.9 million units worth N744.3 million.