Economy
FG Targets $1b from New Tax Evasion Pardon Scheme
By Dipo Olowookere
At least $1 billion is expected to be generated from a newly introduced tax evasion pardon schemed by the Federal Government.
Minister of Finance, Mrs Kemi Adeosun, was quoted in a statement issued by Deputy Director of Information in the Ministry of Finance, Mrs Patricia Deworitshe, to have said that the new initiative would be launched on Thursday, June 29, 2017.
The scheme, called Voluntary Asset and Income Declaration Scheme (VAIDS), would be jointly executed by federal and state governments and would concentrate on the national duty of all Nigerian companies and citizens to pay their taxes.
The tax awareness and compliance initiative is aimed at raising the revenue of the government, especially in this time of economic downturn.
Speaking on the initiative, the Minister said similar schemes in 2016 have been implemented successfully in India, Indonesia and South Africa.
She explained that VAIDS will bring Nigeria in line with international best practice and contribute to worldwide efforts to tackle corruption.
The Minister stated that the much needed funds would be generated and transparently invested, thereby reducing Nigeria’s borrowing needs, allow investment in vital infrastructure and spur development.
“During the last eight years, Nigeria has failed to reduce its debt levels despite high oil prices and nominal GDP growth. We have inherited a situation where our debt and underdevelopment is getting worse not better. This cannot continue.
“Neither can the behaviour of some of our richest citizens and multinationals operating in Nigeria, who seem to consider paying tax to be optional. From 2018, international law will make it easier than ever to track these evaders down and punish them.
“This scheme is in line with similar initiatives launched during 2016 in India, Indonesia and South Africa. We know they work, we know it’s the right thing to do and the Treasury desperately needs the money.
“Finally, the proceeds of this scheme will not disappear. We will provide regular updates on the funds collected to date, and how those funds are being put to very transparent use,” Mrs Adeosun further explained.
“Anticipated funds to be raised are at least $1 billion, which will reduce Nigeria’s borrowing needs, allow investment in vital infrastructure and spur development,” she stressed.
Recall that at an event in Lagos recently, Mrs Adeosun had said if the government was to grow the economy, it must make efforts at raising revenue through tax.
“If we want to grow, we must address the issue of paying tax. Our tax to Gross Domestic Product (GDP) ratio of six percent is rated one of the lowest in the world,” Mrs Adeosun had said at the programme.
The VAIDS is expected to give tax payers a time-limited opportunity to regularise their tax status without penalty.
According to Mrs Deworitshe, the plan provides a one-off opportunity for evaders to avoid the full force of the law between July 1 and December 31, 2017.
During this period evaders can regularise their tax status in exchange for immunity from prosecution of tax offences and a tax audit, and be free from penalty charges and interest.
Evaders who delay participation beyond December 31, 2017 will be liable for interest on overdue tax balances, the Finance Ministry said.
Mrs Deworitshe said under the new scheme, all tax evaders, when identified, would be subjected to the full force of Nigerian and international law, imprisonment of up to five years, severe extra penalties up to 100% of the outstanding tax due, compound interest at 21% per annum, forfeiture of assets.
By Modupe Gbadeyanka
The federal government has been asked by the Nigerian Bar Association (NBA) to suspend the implementation of the controversial tax laws.
In a reaction to the tax reform acts, the president of the group, Mr Afam Osigwe (SAN), the suspension of the laws would allow for a proper investigation into allegations of alterations in the gazetted and harmonised copies.
A member of the House of Representatives, Mr Abdussamad Dasuki, alleged that some parts of the laws passed by the parliament were different from the gazetted copy.
To address the issues raised, the NBA said it is “imperative that a comprehensive, open, and transparent investigation be conducted to clarify the circumstances surrounding the enactment of the laws and to restore public confidence in the legislative process.”
“Until these issues are fully examined and resolved, all plans for the implementation of the Tax Reform Acts should be immediately suspended,” the association declared.
It noted that the controversies “raise grave concerns about the integrity, transparency, and credibility of Nigeria’s legislative process.”
“These developments strike at the very heart of constitutional governance and call into question the procedural sanctity that must attend lawmaking in a democratic society,” it noted.
“Legal and policy uncertainty of this magnitude has far-reaching consequences. It unsettles the business environment, erodes investor confidence, and creates unpredictability for individuals, businesses, and institutions required to comply with the law. Such uncertainty is inimical to economic stability and should have no place in a system governed by the rule of law.
“Nigeria’s constitutional democracy demands that laws, especially those with profound economic and social implications, emerge from processes that are transparent, accountable, and beyond reproach. Anything short of this undermines public trust and weakens the foundation upon which lawful governance rests.
“We therefore call on all relevant authorities to act swiftly and responsibly in addressing this controversy, in the overriding interest of constitutional order, economic stability, and the preservation of the rule of law,” the organisation stated.
By Adedapo Adesanya
Demand for hot stocks, including MRS Oil Plc, buoyed the NASD Over-the-Counter (OTC) Securities Exchange by 0.52 per cent on Tuesday, December 23.
The energy company was one of the three price gainers for the session as it chalked up N19.69 to sell at N216.59 per share versus the previous day’s value of N196.90 per share.
Further, FrieslandCampina Wamco Nigeria Plc gained N2.95 to close at N56.75 per unit versus N53.80 per unit and Golden Capital Plc appreciated by 84 Kobo to N9.29 per share from Monday’s N8.45 per share.
Consequently, the market capitalisation went up by N10.95 billion to N2.125 trillion from N2.125 trillion and the NASD Unlisted Security Index (NSI) rose by 18.31 points to 3,570.37 points from 3,552.06 points.
Yesterday, the NASD bourse recorded a price loser, the Central Securities Clearing System Plc (CSCS), which gave up 17 Kobo to close at N33.70 per unit against the previous trading value of N33.87 per unit.
The volume of securities traded at the session went down by 97.6 per cent to 297,902 units from the previous day’s 12.6 million units, the value of securities decreased by 98.5 per cent to N10.5 million from N713.6 million, and the number of deals remained flat at 32 deals.
By value, Infrastructure Credit Guarantee Company (InfraCredit) Plc ended as the most actively traded stock on a year-to-date basis with 5.8 billion units exchanged for N16.4 billion. This was followed by Okitipupa Plc, which traded 178.9 million units valued at N9.5 billion, and MRS Oil Plc with 36.1 million units worth N4.9 billion.
In terms of volume, also on a year-to-date basis, InfraCredit Plc led the chart with a turnover of 5.8 billion units traded for N16.4 billion. Industrial and General Insurance (IGI) Plc ranked second with 1.2 billion units sold for N420.7 million, while Impresit Bakolori Plc followed with the sale of 536.9 million units valued at N524.9 million.
By Dipo Olowookere
It was another bullish trading session for the Nigerian Exchange (NGX) Limited as it closed higher by 0.59 per cent on Tuesday.
The market further rallied due to continued interest in large and mid-cap stocks on the exchange by investors rebalancing their portfolios for the year-end.
Yesterday, Aluminium Extrusion sustained its upward trajectory after it further appreciated by 9.96 per cent to N14.90, as Austin Laz gained 9.81 per cent to close at N2.91, Custodian Investment improved by 9.69 per cent to N38.50, and First Holdco soared by 9.35 per cent to N50.30.
Conversely, Royal Exchange declined by 7.22 per cent to N1.80, Champion Breweries shrank by 6.57 per cent to N15.65, NASCON lost 5.36 per cent to trade at N105.05, Sovereign Trust Insurance depreciated by 5.28 per cent to N3.77, and Japaul went down by 4.51 per cent to N2.33.
At the close of business, 29 shares ended on the gainers’ table and 27 shares finished on the losers’ log, representing a positive market breadth index and bullish investor sentiment.
This raised the All-Share Index (ASI) by 895.06 points to 153,354.13 points from 152,459.07 points and lifted the market capitalisation by N579 billion to N97.772 trillion from the previous day’s N97.193 trillion.
VFD Group finished the day as the busiest stock after it recorded a turnover of 192.0 million units worth N2.1 billion, GTCO exchanged 63.5 million units valued at N5.6 billion, Access Holdings traded 49.8 million units for N1.0 billion, First Holdco sold 45.8 million units valued at N2.3 billion, and Secure Electronic Technology transacted 38.3 million units worth N28.4 million.
In all, market participants bought and sold 677.4 million units valued at N20.8 billion in 27,589 deals compared with the 451.5 million units worth N13.0 billion traded in 33,327 deals on Monday, showing an improvement in the trading volume and value by 50.03 per cent and 60.00 per cent apiece, and a shortfall in the number of deals by 17.22 per cent.
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