Economy
Presidential Orders on Oil Sector Have Not Weakened NOGICD Act—NCDMB
By Adedapo Adesanya
The Nigerian Content Development and Monitoring Board (NCDMB) has said that the three Executive Orders issued by President Bola Tinubu on the oil and gas Industry in March 2024 have not eroded the relevance of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act.
Speaking during a panel session at the ongoing African Energy Week in Cape Town, South Africa, on Monday, the Director of Capacity Building, Mr Abayomi Bamidele, said some oil and gas stakeholders grossly misinterpreted the presidential directives to mean that the NOGICD Act had been relegated or sidestepped, and no longer needed to comply with the provisions of the law.
The three Executive Orders are the Presidential Directive on Local Content Compliance, the Presidential Directive on Reduction of Petroleum Sector Contracting Cost and Timelines and the Presidential Directive on Oil and Gas Companies (Tax Incentives, Exemption, Remission, among others).
“The Special Adviser to the President on Energy had to clarify that the Presidential Directives did not set aside local content. They only mandated that existing capacities must be patronized and middlemen must be excluded from the contracting process,” he said.
Mr Bamidele confirmed that NCDMB had streamlined its contracting strategies to align with the Presidential Directives, collapsed its touchpoints in the contract approval process from 9 to 5, thereby contributing to the shortening the industry’s contracting cycle, reduction of the cost of projects and catalysing new oil and gas projects from operating oil and gas companies.
He also announced that qualified international service companies can now be awarded the Nigerian Content Equipment Certificates (NCEC), to facilitate their direct participation in deepwater operations in the Nigerian oil and gas industry, as provided in the NOGICD Act. This policy will attract investments into the sector, and is consistent with the Presidential Directives, he explained.
On Board’s strategy for capacity development for new oil and gas projects, he said plans are afoot to conduct trainings in skill areas that are in a high demand in the sector.
He underlined the need to always streamline capacity building initiatives with requirements and changing dynamics in the industry.
The NCDMB official noted that the board is committed to developing critical infrastructure such as the Brass Island Shipyard with support of the Nigeria Liquified Natural Gas (NLNG), as well as completing and operationalizing the Nigerian Oil and Gas Parks at Odukpani, Cross River State and Emeyal-1 in Bayelsa State.
He also charged other African producers on local content and capacity building strategies must be country-specific, and policy makers must understand the mindset and skillsets of their nationals.
He further advised that local content policies and capacity building models must be relevant and applicable to the host country’s technological, educational and manpower capacities.
By Adedapo Adesanya
Crude oil went up by over 3 per cent on Thursday as investors assessed developments in Venezuela and worried about supplies from Russia, Iraq and Iran.
Brent futures rose by $2.03 or 3.4 per cent to $61.99 per barrel, and the United States West Texas Intermediate (WTI) futures gained $1.77 or 3.2 per cent to trade at $57.76 per barrel.
The market is bracing for outcome of visits to Venezuela next week that will include representatives of the US and European oil companies, following the announcement of a $2 billion oil deal and the supply of goods to the South American country by the United States.
America seized two Venezuela-linked oil tankers in the Atlantic Ocean on Wednesday, with one sailing under Russia’s flag, as part of President Donald Trump’s aggressive push to dictate oil flows in the Americas.
After capturing Venezuelan President Nicolas Maduro in a military raid a few days ago, the US has been escalating its blockade of vessels that are under sanctions and traveling to and from the South American country, a member of the Organization of the Petroleum Exporting Countries (OPEC).
Meanwhile, the risk of a major supply shock related to Iran, another OPEC member, is climbing as protests swept the country, leading to a nationwide internet blackout.
President Trump’s earlier threat to come to the rescue of any peaceful protesters killed by the Iranian regime adds to concerns in oil markets that these protests could result in direct action by the US in Iran.
Iran’s President Masoud Pezeshkian warned domestic suppliers against hoarding or overpricing goods, as the country rolled out high-stakes subsidy reforms during nationwide protests against economic hardship.
Developments in Iraq, a member of OPEC, added to the broader geopolitical support for crude, as the cabinet approved plans to nationalize operations at the giant West Qurna 2 oilfield to avert potential disruptions linked to U.S. sanctions on Russian stakeholder Lukoil.
Iraq and Iran are among the biggest oil producers in OPEC behind Saudi Arabia.
A Russia-bound oil tanker was attacked by a drone in the Black Sea, prompting a request for Turkish Coast Guard assistance and a course diversion. While no party has claimed responsibility for the attack, it does highlight further instability in the region and a broader threat to oil flows.
Ukrainian President Volodymyr Zelenskiy said on Thursday the text of a bilateral security guarantee between Ukraine and the US was ready to be finalised with Mr Trump.
By Aduragbemi Omiyale
The Nigerian arm of global consultancy firm, KPMG, has highlighted some inherent errors, inconsistencies, gaps and omissions in the country’s new tax laws.
In a report on its website, analysed by Business Post, KPMG Nigeria charged the local authorities to address these issues to boost investor confidence.
It noted that while the new tax laws would result in increased revenue for the government, there is always the need to strike a delicate balance between revenue generation and sustainable growth.
“It is, therefore, critical that government review the gaps, omissions, inconsistencies and lacunae highlighted in this newsletter to ensure the attainment of the desired objectives. Government must also seek international cooperation and collaboration to facilitate the sharing of information, build capacity and capability of tax administration in the country,” it said.
Analysing an error in Section 3(b) and (c) of the Nigeria Tax Act (NTA), which dwells on the imposition of tax, the agency said the section specifies persons on whom taxes should be levied, including individuals, families, companies or enterprises, trustees, and an estate, but omits community, which is included in the definition of person under Section 201.
It recommended that, “If the intention is to impose tax on communities, this should be explicitly introduced in Section 3. Otherwise, the law should clearly state that communities are now exempt from tax.
It also pointed out that Section 6(2) of the NTA on Controlled Foreign Companies (CFC), the Act states that undistributed foreign profits are to be “construed as distributed” but also mandates that they be “included in the profits of the Nigerian company” (implying income tax at 30 per cent).
Though dividend distributed by a Nigerian company is deemed to be franked investment income, this does not appear to be the case with dividends distributed by foreign companies.
It thus appears that such dividends will be taxed at the income tax rate. Consequently, there will be differences in the treatment of dividends distributed by Nigerian companies and those distributed by foreign companies.
KPMG Nigeria advised the government to “modify the section by providing clarity on the treatment of foreign and local dividends.”
On Section 20(4) of the NTA focusing on deductions allowed, it states that expenses incurred in a currency other than the Naira may only be deducted to the extent of its Naira equivalent at the official exchange rate published by the Central Bank of Nigeria (CBN).
This implies that where a business buys forex at a rate that is higher than the official rate, such company cannot claim tax deduction for the difference in value between the official and the other rates.
The intention is to discourage speculative foreign exchange transactions and encourage the appreciation of the Naira. However, issues surrounding the accessibility of all forex needs due to supply problems have not been fully considered.
It recommended that, “We do not think that this condition is necessary at this time. With the current state of the economy, focus should be on improving liquidity and introducing stricter reporting requirements to track and monitor foreign exchange transactions.”
As for the next section, which dwells on deductions not allowed, it includes expenses on which VAT has not been charged. This means that such expenses will not be considered allowable tax deductions even when those expenses have been validly incurred for business purposes.
This implies that a company could be held accountable for any inaction or non-performance by its suppliers or service providers. While the defaulting service providers may eventually be required to pay the VAT during an audit or investigation, the company will have already been denied the ability to claim a deduction for the related expense.
It called for the removal of this section, saying “the only criteria should be that any expense that is wholly and exclusively incurred for business purposes should be allowable for tax purposes.”
Other sections it found errors in include Section 17(3)(c) of the NTA on taxation of non-resident persons, Section 27 of the NTA on the ascertainment of total profits of companies, Section 30 of the NTA on the ascertainment of chargeable income of an individual, Sections 39 and 40 of the NTA on computation of chargeable gains, Section 47 of the NTA on indirect transfer of ownership of companies or assets, Section 63(4) / 162(b) of the NTA on collective investment scheme, amongst others.
By Aduragbemi Omiyale
The Securities and Exchange Commission (SEC) has accused an investment online platform, Investment Management (VIM), of operating illegally in the Nigerian capital market.
In a notice obtained from the website of capital market regulator by Business Post, Voya Investment was accused of deceiving unsuspecting members of the public with fake certificate of identity verification, purportedly issued by SEC.
The agency emphasised that Voya Investment is not authorised to operate in the nation’s capital market because it is not registered to do so.
“The operators of this platform claim to offer investment services in Nigerian stocks and other financial instruments purportedly under the supervision of the Commission. Voya Investment Management is also parading a certificate of identity verification purportedly issued by the commission.
“The commission hereby informs the public that Voya Investment Management (VIM) is NOT REGISTERED or licensed by the commission to carry out any activity in the Nigerian capital market,” parts of the statement stressed.
The organisation further declared that, “The certificate being paraded by Voya Investment Management was neither issued nor endorsed by SEC Nigeria as the commission does not issue certificates of identity verification.
“Furthermore, claims by VIM that it is supervised, licensed, or approved by the commission to undertake operations in the capital market are false, misleading and fraudulent.”
It added that, “Complaints received by the commission regarding the fraudulent activities of VIM and the misleading information by the company to the investing public that it is licensed by the commission, bear clear characteristics of illegal investment schemes designed to defraud unsuspecting members of the public.”
“Accordingly, the public is advised to refrain from dealing with Voya Investment Management (VIM) , as any person who engages with the entity or its representatives does so at his/her own risk.
“The commission hereby reiterates that transacting in the Nigerian capital market with unregistered entities exposes investors to financial risks including fraud and potential loss of investments.
“The investing public is therefore reminded to VERIFY the status of companies and entities purporting to offer investment opportunities in the capital market on the commission’s dedicated portal – www.sec.gov.ng/cmos, prior to transacting with such companies and entities.”
-
Feature/OPED6 years agoDavos was Different this year
-
Travel/Tourism9 years ago
Lagos Seals Western Lodge Hotel In Ikorodu
-
Showbiz3 years agoEstranged Lover Releases Videos of Empress Njamah Bathing
-
Banking8 years agoSort Codes of GTBank Branches in Nigeria
-
Economy3 years agoSubsidy Removal: CNG at N130 Per Litre Cheaper Than Petrol—IPMAN
-
Banking3 years agoFirst Bank Announces Planned Downtime
-
Banking3 years agoSort Codes of UBA Branches in Nigeria
-
Sports3 years agoHighest Paid Nigerian Footballer – How Much Do Nigerian Footballers Earn