By Adedapo Adesanya
Amid the recent hostility between the states and the federal government, the Lagos State House of Assembly on Thursday passed the Value Added Tax (VAT) Bill.
The Assembly, led by the Speaker, Mr Mudashiru Obasa, directed the Acting Clerk of the House, Mr Olalekan Onafeko, to transmit a clean copy of the bill to Governor Babajide Sanwo-Olu for assent.
Earlier on Monday, Mr Obasa had said the Lagos State government generated N500 billion annually from VAT but only received a small amount from the federal government.
According to analysis, Section 4 of the bill provides that the state will charge VAT at the rate of six per cent on the value of goods and services except certain goods and services listed under Part III of the schedule which shall be taxed at zero rates, these are – basic food items; medical and pharmaceutical products, medical services; books and educational materials; items covered under the Hotel Occupancy and Restaurant Consumption Law of Lagos State, amongst others.
Section 7 empowers the Lagos State Internal Revenue Service (LIRS) to administer and implement the law.
The LIRS would account for money collected in line with the law and do any other things necessary for the assessment and collection of the tax, meaning that the Federal Inland Revenue Service (FIRS) can’t carry out this function anymore.
Section 8 states that taxable persons are to register for the tax within six months of the commencement of the law or six months of commencement of business, whichever is earlier.
According to section 9, non-resident companies are to register for the tax if they carry on business in the state, using the address of the person with whom it has a subsisting contract as its address for purposes of correspondence relating to the tax.
Section 16(2) provides that an importer of taxable goods shall pay to the service the tax on the goods before clearing.
The bill also provides for a body known as the Value Added Tax Appeal Tribunal.
In terms of sharing, Section 33 states that VAT revenue shall be shared 75 per cent to the state government and 25 per cent to the Local Government Areas, a decision that has been decried by LGAs who want a 50-50 sharing formula.
Section 15 noted that a monthly remittance and returns are due by the 21st of the subsequent month in a manner specified by the LIRS. This implies that the first return under the law will become due by the 21st of the month after enactment.
There is no exemption for small businesses with turnover below N25 million as is the case under the national VAT Act.
The House also passed the bill that prohibits open cattle grazing in the state. The two bills were passed after unanimous votes by the lawmakers at the sitting where the bills were read the third time.
Stakeholders Pledge Quality Market for Locally Produced Onion Species
By Adedapo Adesanya
National Onion Producers, Processors and Marketers Association of Nigeria (NOPPMAN) has pledged to stimulate quality production and profitable market for all the commodity stakeholders in West Africa.
This was disclosed by the President of the association, Mr Aliyu Maitasamu in Abuja, who further said the group was ready to build members’ capacities in good agronomic practices for onion production and good strategies for commercialisation.
Mr Maitasamu said that the onion species produced in the country was one of the best in the world because of its strong pungency, adding that it is exported to many countries including France, Japan, India, Niger Republic, Ghana and others.
He said as part of efforts to bring stakeholders together in West Africa to further harness the potential of the onion business, the association plans a regional conference on the impact of the African Continental Free Trade Area (AfCFTA) on onions in November.
Mr Maitasamu said that the regional conference and their General Annual Meeting 2021 will hold on November 3 and 4, in Kano State, urging interested participants to register through https://noppman.org.
He said the theme of the conference is The Onion Sector in the Era of the African Free Trade Area and the COVID-19 Pandemic: Challenges and Opportunities.
Mr Maitasamu added that the conference is a collaborative effort of the Regional Observatory for Onion Sector in West and Central Africa (ROO-WCA), explaining that the overall objective is to re-structure efficiently the onion sector in the region in order to ensure a better exchange of onion between areas of production and consumption.
“More specifically, ROO/WCA is targeting to build an integrated, strong and effective onion value-chain that will be able to ensure and stimulate a quality production and profitable market for all the commodity stakeholders.
“The ROO-WCA mission expands also into reinforcing institutional capacities of professional organizations, with the objective to ensure smooth exchange between partners by collection.
“And dispersal of commercial information relevant for decision-makers in production, purchases and sales.
“This will ensure permanent contact between members by organising periodic meetings, for a better use of business opportunities and judicious sharing of information and experience,” he said.
Crude Prices to Average $74 Per Barrel in 2022—World Bank
By Adedapo Adesanya
The World Bank in its latest Commodity Markets Outlook says crude prices will average $74 per barrel next year.
Crude oil prices (an average of Brent, WTI and Dubai) are expected to average $70 in 2021, an increase of 70 per cent and are projected to be $74 a barrel in 2022 as oil demand strengthens and reaches pre-pandemic levels.
The use of crude oil as a substitute for natural gas presents a major upside risk to the demand outlook, although higher energy prices may start to weigh on global growth.
This is happening as energy prices soared in the third quarter of 2021 and are expected to remain elevated in 2022.
The Bretton Wood institution said that the rise is adding to global inflationary pressures and could shift economic growth to energy-exporting countries from energy-importing ones.
The report said that energy prices—expected to average more than 80 per cent higher in 2021 compared to last year—will remain at high levels in 2022 but will start to decline in the second half of the year as supply constraints ease.
Non-energy prices, including agriculture and metals, are projected to decrease in 2022, following strong gains this year.
“The surge in energy prices poses significant near-term risks to global inflation and, if sustained, could also weigh on growth in energy-importing countries,” said Mr Ayhan Kose, Chief Economist and Director of the World Bank’s Prospects Group, which produces the Outlook report.
“The sharp rebound in commodity prices is turning out to be more pronounced than previously projected. Recent volatility in prices may complicate policy choices as countries recover from last year’s global recession,” he added.
In 2021, some commodity prices rose to or exceeded levels not seen since the spike of 2011.
For example, natural gas and coal prices reached record highs amid supply constraints and rebounding demand for electricity, although they are expected to decline in 2022 as demand eases and supply improves.
However, additional price spikes may occur in the near term amid very low inventories and persistent supply bottlenecks.
As global growth softens and supply disruptions are resolved, metal prices are forecast to fall 5 per cent in 2022, after rising by an estimated 48 per cent in 2021.
Following a projected 22 per cent increase in 2021, agricultural prices are expected to decline modestly next year as supply conditions improve and energy prices stabilize.
“High natural gas and coal prices are impacting the production of other commodities and pose an upside risk to price forecasts,” said Mr John Baffes, Senior Economist in the World Bank’s Prospects Group.
“Fertilizer production has been curtailed by higher natural gas and coal prices, and higher fertilizer prices have been pushing up input costs for key food crops. The production of some metals such as aluminium and zinc has been reduced due to high energy costs as well.”
The institution then called on countries to benefit from accelerating the installation of renewable energy and reducing their dependency on fossil fuels.
The report notes that forecasts are subject to substantial risks—including adverse weather, the uneven COVID-19 recovery, the threat of more outbreaks, supply-chain disruptions, and environmental policies.
Furthermore, higher food prices, along with the recent spike in energy costs, are pushing food-price inflation up and raising food-security concerns in several developing economies, it warned.
NGX Index Grows 1.10% as MTN, Airtel, Nestle Witness Cross Deals
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited finished strong on Thursday as it appreciated by 1.10 per cent on the back of sustained bargain hunting by investors.
Consequently, the All-Share Index (ASI) went up by 454.40 points to 41,704.11 points from 41,249.71 points, while the market capitalisation rose by N238 billion to N21.764 trillion from N21.526 trillion it finished on Wednesday.
Business Post reports that the activity chart was weak yesterday as a total of 216.2 million shares worth N3.4 billion were traded in 4,272 deals as against the 499.5 million shares worth N5.1 billion transacted in 5,998 deals a day earlier.
This indicated that the volume of shares bought and sold at the session depreciated by 56.72 per cent, the value of the stocks went down by 33.43 per cent and the number of deals fell by 28.78 per cent.
Like in the previous trading day, FBN Holdings was the most traded stock with the sale of 51.9 million units valued at N628.3 million as Ecobank traded 20.0 million units worth N143.7 million.
Transcorp exchanged 14.7 million equities valued at N15.0 million, Access Bank transacted 13.0 million stocks worth N124.2 million, while Fidelity Bank sold 12.5 million shares for N34.2 million.
It was observed that on Thursday, three cross deals were recorded with MTN opening the market with the exchange of about 2 million units of its stocks at N172.00 each, while Airtel Africa witnessed the transfer of over 900,000 units at N770.00 each, with about 100,000 units of Nestle Nigeria’s shares crossed at N1,405.00 each.
A cross deal is the practice of the exchange of stocks between a buyer and a seller through a broker at an agreed price on the exchange.
A total of 23 equities were on the gainers’ chart yesterday with Cutix leading after its value went higher by the maximum rise of 10.00 per cent to settle at N5.50.
NGX Group rose by 9.79 per cent to N23.55, Consolidated Hallmark Insurance grew by 9.09 per cent to 60 kobo, Nigerian Breweries appreciated by 7.41 per cent to N51.45, while BUA Cement gained 6.12 per cent to sell for N72.00.
Conversely, 19 stocks finished on the losers’ log led by the Initiates, which fell by 8.51 per cent to trade at 43 kobo, followed by Neimeth, which lost 4.86 per cent to quote at N1.76.
Furthermore, Universal Insurance depreciated by 4.76 per cent to close at 20 kobo, NAHCO depleted by 3.61 per cent to N3.47, while Unity Bank went down by 3.51 per cent to 55 kobo.
In terms of the performance of the sectors, the energy space was down by 0.36 per cent while the industrial goods, insurance, consumer goods and banking counters appreciated by 2.16 per cent, 1.56 per cent, 1.45 per cent and 0.17 per cent respectively.
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