General
Why Nigeria Rejected OECD Minimum Corporate Tax Agreement—FIRS
By Modupe Gbadeyanka
The Executive Chairman of the Federal Inland Revenue Service (FIRS), Mr Muhammad Nami, on Monday explained why Nigeria did not endorse the Organization for Economic Cooperation and Development (OECD) Minimum Corporate Tax Agreement.
In a statement issued by his Special Assistant on Media and Communication, Johannes Oluwatobi Wojuola, the tax agency boss stated that signing the deal will not be in the interest of the nation.
The OECD Minimum Corporate Tax Agreement was designed to allow multinational enterprises (MNEs) to have a fair payment of taxes in different countries.
But Mr Nami said if Nigeria endorses it, it will lose out on potential revenue from the digital economy as the agreement is unfair to the nation and the developing countries in general.
“There are serious concerns on how the rules would compound the issues in our tax system. For instance, to be able to tax any digital sale or any multinational enterprise (MNEs), that company or enterprise must have an annual global turnover of €20 billion and global profitability of 10 per cent. That is a concern. This is because most MNEs that operate in our country do not meet such criteria and we would not be able to tax them,” he said.
“Secondly, the €20 billion global annual turnover in question is not just for one accounting year, but it is that the enterprise must make €20 billion revenue and 10 per cent profitability on average for four consecutive years, otherwise that enterprise will never pay tax in our country, but in the country where the enterprise comes from, or its country of residence,” he was further quoted as saying in the statement.
The FIRS head noted that for Nigeria to subject a Multinational Enterprise to tax under the rule, the entity must have generated at least €1 million turnover from Nigeria within a year, stressing that this is an unfair position, especially to domestic companies which, with a minimum of above N25 million (that is about €57,000) turnover, are subject to companies income tax in Nigeria.
He added that this rule will take off so many multinational enterprises from the scope of those that are currently paying taxes to Nigeria. In other words, even the MNEs that are currently paying taxes in Nigeria would cease to pay taxes to us because of this rule.
On the issue of dispute resolutions under the Two-Pillar Solution, the FIRS Executive Chairman explained that the rules were such that in the event of a dispute between Nigeria and a Multinational Enterprise, Nigeria would be subject to an international arbitration panel as against Nigeria’s own justice system.
“It would be subject to international arbitration and not Nigeria’s judicial system and laws—even where the income is directly related to a Nigerian member of an MNE group, which is ordinarily subject to tax in Nigeria on its worldwide income and subject to the laws of Nigeria.
“We are concerned about getting a fair deal from such a process. More so, such a dispute resolution process with a Multinational Enterprise, in an international arbitration panel outside the country, would lead to heavy expenses on legal services, travelling and other incidental costs. Nigeria would spend more; even beyond the tax yield from such cases,” he said.
On the issue of Nigeria losing significant revenue if it fails to sign in to the OECD Inclusive Framework rules for the taxation of the digital economy, Mr Nami noted that this was not a problem as the country had already put forward four ongoing solutions to the challenge of taxation of the digital economy.
“One, we have made it a point of practice to annually amend our tax laws to reflect the current global realities, it was courtesy of these reviews that we developed the Significant Economic Presence (SEP) rule, through the Finance Act of 2019 and 2020. The SEP rules set a threshold for multinational enterprises, without a physical presence in Nigeria, for registration and payment of taxes to the country.
“Two, we have deployed technology in order for us to bring digital transactions to the tax net. Coupled with the Significant Economic Presence rule, we have started seeing the impact of the technology we have deployed; companies like Twitter, Facebook, Netflix, and LinkedIn, among others who have no physical presence in Nigeria and that were hitherto not paying taxes, have now registered for tax purposes and are paying taxes accordingly. A positive to this is that we surpassed our target in the year 2021, despite the challenge posed to the global economy, including our own economy, by the Covid-19 pandemic.
“The third initiative is the Data-4-Tax Initiative, a blockchain technology which FIRS is jointly developing with the Internal Revenue Service of the 36 states and that of the FCT, under the auspices of the Joint Tax Board. With this project, we are confident that we are going to have a seamless view and access to all economic activities of individuals and corporate bodies in Nigeria going forward, including money spent on digital commerce.
“The fourth is that we have set up a specialised office, the Non-Resident Persons Tax Office, to manage the taxation of non-resident persons and cross-border transactions, including all tax treaty operational issues and the income derived from Nigeria by non-resident individuals and companies,” he disclosed.
By Aduragbemi Omiyale
Nigeria is currently experience a cut in power supply after the national grid collapsed for the 11th time in 2024.
This is the first time in over a month as the last time the nation witnessed a nationwide shut down in electricity supply was on November 7, 2024.
Before then, the country was experiencing an incessant collapse of the grid, which prompted the federal government to set up a team to address the issue.
However, just when Nigerians were thinking they will not witnessed another national grid collapse in the year, it issue reared its ugly head again.
On Wednesday afternoon, most of the energy distribution companies suffered power outage, prompting them to inform their customers of the situation.
One of the DisCos, Ikeja Electric Plc, in a message to electricity consumers under its franchise area, said, “Please be informed that we experienced a system outage today, December 11, 2024, at about 13:32 hours affecting supply within our network.
“Restoration of supply is ongoing in collaboration with our critical stakeholders. Kindly bear with us.”
Recall that on Tuesday, in a report, Google listed national grid as one of the top trending searches by Nigerians this year.
By Adedapo Adesanya
The Nigerian LNG Limited (NLNG), which produces Nigeria’s Liquified Natural Gas (LNG) and natural gas liquids (NGLs) for export, is planning to replace all its vessels with modern ships within the next decade.
This was disclosed by Mr Nnamdi Anowi, the General Manager of Production, NLNG, during the World Leaders’ Panel session on Tuesday in Berlin, Germany, as part of the 2024 World LNG Summit and Awards.
Speaking at the event themed “Achieving the Balance Between Energy Security and Decarbonisation,” he said the company which was incorporated in 1989 was making plans to boost its vessels to ensure proper transportation of gas for export.
“We are making significant strides in our shipping operations. Over the next 10 years, we aim to transition from our current steam-powered vessels to modern ships.
“Earlier this year, we took a major step by entering into a long-term chapter of our first modern ship Aktoras, and we are already planning to acquire a second ship next year,” he said.
On the critical issue of net zero emissions, Mr Anowi said that NLNG aspires to achieve net zero emissions by 2040.
According to him, this goal is attainable through implementing a combination of solutions that include operational efficiency, natural sinks/offset projects, carbon capture and storage (CCS), net zero expansion, digital solutions and shipping efficiency.
“Our pathway to net zero aligns with Nigeria’s target of reaching net zero by 2060, while many major players in the industry are aiming for 2050.
“We are actively expanding our initiatives in this area, including several low-carbon projects,” he explained.
Regarding Liquefied Petroleum Gas (LPG), Anowi noted that the company had committed 100 per cent of its LPG production (propane and butane) to the Nigerian market.
He pointed out the urgent need for cleaner energy, citing a report that revealed that not less than 100,000 Nigerians died yearly from smoke inhalation caused by cooking with firewood, predominantly affecting women and children.
“This underscores our commitment to sustainability. It’s important to recognise that about 80 per cent of Africans lack access to cleaner energy.
“When discussing sustainability, we can not overlook the necessity of providing energy to these communities,” he added.
He further elaborated on NLNG’s strategy, stating, “Our objective at Nigeria LNG is to maintain safety, enhance capacity, foster growth, and future-proof our business.
“The recent transformation programme includes a rebranding initiative, evidenced by the unveiling of a new logo and the company’s renewed purpose: providing energy for life’s sustainability.
Mr Anowi also noted that NLNG was working diligently to improve its production capacity from 23 million tons to 30 million tons through its Train 7 Project.
“We are actively engaging with stakeholders and the government to ensure our LNG trains are filled by the end of next year,” he said.
On sustainability, Mr Anowi explained that 75 per cent of NLNG’s emissions result from its operations, with the remaining 25 per cent coming from its shipping activities.
He emphasised the importance of measurement, reduction, avoidance and mitigation strategies in their sustainability efforts.
He said that the company was also exploring CCS opportunities through partnerships with the government and other international oil companies.
“We are in the early stages of CCS implementation, assessing potential reservoirs for this purpose,” he said.
In terms of renewable energy, Anowi said that NLNG was investigating solar power projects at its offices in Abuja and Port Harcourt as part of its broader sustainability initiatives.
“We are committed to abatement efforts and are collaborating with experienced private companies to explore carbon credit opportunities.
“We must balance sustainability with affordability and reliability in energy supply.
“The African region must progress at its own pace, prioritising immediate energy needs before addressing long-term sustainability goals,” he explained.
By Dipo Olowookere
Many events happened in 2024 in Nigeria but a few shook the nation because of their impact on residents of the country.
According to a report released by Google, the incessant collapse of the national grip, which plunged the nation into darkness, was among trending searches on its platform.
In the report made available to Business Post on Tuesday, the tech giant said this year’s results show a continued interest in the political and economic landscape, with searches related to the US elections, the new national anthem.
“The 2024 Year in Search offers a unique lens into the questions, interests, and conversations that shaped the lives of Nigerians this year.
“From cultural milestones to pressing concerns, these insights reflect how Search continues to be a valuable tool for users to navigate and better understand their world,” the Communications and Public Affairs Manager for Google West Africa, Taiwo Kola-Ogunlade, stated.
Google’s 2024 Year in Search for Nigeria showcased the most popular searches, notable individuals, actors, musicians, topics, questions, and other subjects that captured Nigerians’ attention in the year.
Google’s Year in Search is an annual analysis that reveals the top trending lists and also spotlights what the world searches to see, learn, and do.
The music scene in 2024 was marked by a surge in popularity for artists like Shallipopi and Khaid, who also featured prominently in the overall personalities list. The top trending song was “”I Don’t Care” by Boy Spyce”, followed closely by “Ozeba” and “Commas” by Ayra”. Nigerians also showed a keen interest in understanding the lyrics of various songs, with “Ogechi lyrics”, “Ozeba lyrics”, and “Omemma by Chandler Moore lyrics” leading the searches in the lyrics category.
This year, Nigerians continued to demonstrate a strong interest in entertainment with movies like “A Tribe Called Judah”, “Treasure In The Sky”, and “Damsel” topping the movie charts. The top TV series that captured the interest of Nigerian netizens included “Supacell”, “My Demon”, and “Queen of Tears”. In the culinary world, Nigerians explored diverse recipes with “Pornstar Martini recipe” leading the searches.
Concerns about personal well-being and global events were also reflected in search trends. Questions like “How much is dollar to naira today?”, “How to get perfectly defined curls for African hair?”, and “Who won the US presidential election?” topped the list of queries. Nigerians were curious about the meaning of words like “demure,” “steeze,” and “pet peeves,” turning to Search for answers.
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