Insecurity, Corruption: Nigeria’s economy may remain low for next ten years–Report
Insecurity, Graft: Nigeria’s Economy May Remain Low for 10 yrs—Report
Citing insecurity, corruption and low good governance indices, Nigeria’s economy may remain low and is not likely to do better than it did in the last decade for ten years from today, a 2020 Fitch Country Risk Analysis for Nigeria has indicated.
The report, recently published says Nigeria’s economy remains strongly-tied to the performance of the oil sector and overall economic activity is unlikely to “reach levels seen over the past decade”, on the back of weak oil-driven growth, limited reform momentum and sluggish non-oil sector activity.
It noted that businesses operating in Nigeria face heightened security costs, an uncertain regulatory environment, limited labour and capital mobility and uncompetitive import conditions.
“Nigeria’s non-oil sector growth potential remains constrained by the acute shortcomings in the country’s utilities and transport sectors, high levels of social instability in the restive regions of the country, unorthodox trade and monetary policies and strained foreign currency availability.
“Rampant criminal activity and recurrent militant attacks on critical infrastructure – particularly in the Niger Delta – threaten the safety of foreign workers, business operations and wider economic stability due to the economy’s fundamental reliance on oil revenues. Cyclical security risk flashpoints also disrupt the country’s predominantly gas-reliant power supply and limits freight transit routes.
“Meanwhile, smuggling across the country’s porous borders, excessive red tape surrounding trade and investment, unorthodox foreign currency regimes and pervasive corruption further cloud the ease of doing business, thereby raising legal costs and deterring investment.
“Over the longer term, the country has potential to capitalise on its resource wealth, strategic position and large population if it can successfully complete planned energy and transport infrastructure development projects and implement structural reforms aimed at boosting market liberalisation and economic diversification, however slow reform momentum under Buhari’s tenure and political risks will preclude rapid improvements in in the business environment in the quarters ahead”, said the report.
The report includes: Fitch Solution’s Core Views, 10-year Forecasts, Economic Risk Index, Political Stability and Risk Index, Long-term Political Outlook, Operational Risk Index, SWOT Analysis and Structural Economic Sections.
AfDB approves €109 million to transform sewage coverage in Upper Egypt rural areas
AfDB approves €109 million to transform sewage coverage in Upper Egypt rural areas
The Board of Directors of the African Development Bank (https://www.AfDB.org/) has approved a €109 million facility for the development of sewage disposal and wastewater treatment plants for rural areas in Luxor Governorate in Egypt’s Upper Nile region.
The Integrated Rural Sanitation in Upper Egypt – Luxor (IRSUE-Luxor) project is set to boost sewage coverage in the region from 6 percent to 55 percent, improving the quality of life of citizens, including women and children, who are most affected by poor sanitation.
The facility consists of a €108 million loan from the Bank, and a grant of € 1 million from the Rural Water Supply and Sanitation Initiative (RWSSI)- an Africa-wide initiative hosted by the African Development Bank.
“The Bank’s support under the Integrated Rural Sanitation in Upper Egypt – Luxor will develop more than 8 sewer networks and pump stations and 2 wastewater treatment plants located in the desert areas of El Tod, and El Keman El Matana,” said Mohamed El Azizi, the Bank’s Director General for the North Africa region.
The network will serve approximately 22,000 households (161,929 inhabitants). The households in satellite villages that will not be covered by the sewer network will benefit from an improved onsite sanitation service, which involves sludge treatment in the wastewater treatment plants.
IRSUE-Luxor contributes to the National Rural Sanitation Programme (NRSP) established by the Ministry of Housing and Urban Communities and aims at expanding access to sanitation services from 34% currently (national wide) up to 60% in 2030.
The operation will support ongoing sector reforms that will scale up wastewater collecting, conveying and treating infrastructure, thus contributing to increased coverage of improved sanitation services, leading to a cleaner and healthier environment.
As one of several initiatives supported by the African Development Bank in Egypt to optimize the use of the country’s water resources, this intervention will enable about 30,000 cubic meter (m3) per day of treated wastewater to be discharged into drainage and irrigation canals and will be re-used to enhance agricultural output.
Furthermore, the project includes a staff capacity- building component and the strengthening of a performance-based culture within the Luxor Water and Wastewater Company.
The initiative is in line with the Bank’s water sector policy, which promotes efficient, equitable and sustainable development through integrated water resources management. In addition, the operation supports tariff regulation to achieve full cost recovery, which is one of the basic principles of the Bank’s water sector policy.
IRSUE-Luxor will enable the Bank to consolidate its commitment to support the water and sanitation sector in Egypt, through an integrated approach combining sector reforms and infrastructure development.
The Bank will strengthen the country systems, focusing on results and sustainability, promoting good governance in the sanitation sector, and increasing sanitation rate in a very vulnerable area.
Nigeria: Bogus Loan Request Stopped by Saraki will be passed by Lawan
Nigeria: $30bn loan request stopped by Saraki to be passed by Lawan
In 2016, when Bukola Saraki was Nigeria’s Senate President, the upper legislative house rejected a bogus loan request, to the tune of $30 billion by President Muhammadu Buhari.
Senators said the chamber rejected the bill to save Nigeria from sinking into the dark gully of a perpetual debt trap.
But three years down the line, when another crop of senators are on the saddle, there are clear indications that the same bill will scale through the senate on Wednesday.
Buhari recently re-forwarded the failed bill to the Senate to reconsider and approve the federal government’s 2016 to 2018 external borrowing plan.
The loan, he said, is to execute key infrastructural projects across the country between 2016 and 2018.
Saraki’s successor, Ahmad Lawan, on Monday, gave a clear indication yet that the Senate would pass a $29.96 billion loan request
Lawan, while addressing journalists in Abuja, said the Senate would approve the loan request but would ensure adequate oversight.
“We are going to be critical that every cent that is borrowed is tied to a project,” Mr Lawan said in response to a question by a journalist.
A similar request by Mr Buhari to the 8th Senate led by Bukola Saraki was rejected.
While reacting to the 2016 rejection, Mr Lawan, who was then a senator, said the Senate was right then to have rejected the loan request.
“In 2016, there were no sufficient details,” he said, adding that “the executive has learnt its lessons.”
Mr Lawan said Mr Buhari had provided necessary details of what the loan would be used for in his new request.
“The letter conveying the loan request of the executive came with every possible details,” he said.
Keystone Radiology GE Healthcare Partner to Advance Diagnostic Services at MooiMed Hospital
Keystone Radiology GE Healthcare Advance Diagnostics at MooiMed
GE Healthcare (GEHealthcare.com) has partnered with Keystone Radiology at MooiMed Private Hospital, to provide advanced diagnostic solutions for its Medical and Surgical patients, as well as the Sports and Orthopaedic Institute. The advanced technology which includes GE Healthcare’s Revolution ACT Computed-Tomography (CT) Scanner, SIGNA™ Explorer Magnetic Resonance Imaging (MRI) System and OEC One C-arm, will aid their team in accurately diagnosing injuries and enhance the performance of athletes.
“Keystone has a Nationwide footprint of in and out of hospital Diagnostic Imaging Centres, building on a strong history of exemplary patient care and fast Radiological reporting. We’ve always partnered with the best clinicians in our country, thus we decided to make Mooimed Private Hospital our flagship diagnostic facility, delivering dedicated world-class imaging. This will be made possible through our partnership with the renowned clinicians of Mooimed Private Hospital and GE Healthcare, who are leaders in innovative diagnostic solutions.”-said Dr Pieter Henning, Clinical Head of Keystone Radiology.
Keystone Medical has a focus on dedicated specialist diagnostic services delivering expert, efficient and reproducible quality to clinicians. The MRI will be focused on delivering detailed imaging with highly specialised dedicated reporting tailored according to the needs of the referring clinicians. The C-Arm will provide fast and accurate imaging in the theatres during orthopaedic and urological procedures, while the upgraded CT scanner will expand the hospital’s diagnostic capability by enabling faster scanning times, higher resolutions and advanced software. The CT scanner is fully capable of delivering diagnostic accuracy for the expanding super-specialist range of Mooimed, such as pulmonology.
“As a leading provider of medical imaging solutions, we are delighted to be cooperating with Keystone Radiology to enable broader access to the latest imaging technologies. This will help enable the new diagnostic facility to deliver more effective diagnosis, treatment and monitoring of patients.”-said Clyde Lewis, Chief Commercial Officer, GE Healthcare Africa.
To support South Africa’s agenda to provide its citizens with access to affordable and quality healthcare, GE Healthcare has partnered with various private and public healthcare providers across the country to provide world-class medical technology, maintenance of equipment and training to healthcare professionals.
“Our mission is to provide unique health care services and to create an environment that enables improved care and increased comfort for our patients. We are eagerly anticipating the first scans done in house with the new equipment to address individual patient’s needs. This will ensure a quick return to the activities our patients like most; whether it is qualifying for the Olympics, playing SuperRugby or walking around the block.”- said Mrs. Karin van Reenen, Hospital Manager at MooiMed Private Hospital.
According to Mordor Intelligence, the burden of chronic diseases has been increasing steadily in South Africa, leading to technological advancements in diagnostic imaging. With the new diagnostic equipment at Mooimed, patients will not need to be referred to Gauteng to obtain comparable diagnostic services. This will greatly enhance radiological services in Potchefstroom and the North West Province at large.
TAX DRIVE: Nigeria targets 80% of revenues from Non-oil sector, says Fowler
TAX DRIVE: Nigeria targets 80% of revenues from Non-oil sector, says Fowler
The Executive Chairman, Federal Inland Revenue Service (FIRS) Tunde Fowler has said that Nigeria would earn at least 80 per cent of her revenues from the non-oil sector of the economy in the next three years.
Fowler who spoke ON Tuesday at the Nigeria-Canada Investment Summit in Abuja noted that the non-oil sector contribution to the Nigerian economy has risen to 60 per cent by November 2019 from 54 per cent in December 2018.
He also noted that the continuous drop in the oil prices is a sign that attention should be focused on the non-oil sector of the economy which he said is more sustainable.
“We are moving from oil dependent to non-oil dependent economy. We believe that in the next three years, the non-oil sector is going to contribute at least 80 per cent of the total revenue. You may ask where is that going to come from. It is going to come from Agriculture”, he said.
He said the strategies that FIRS is adopting to realise improved revenue collection are: “auto VAT Collection: there is automation of VAT collection in key sectors which facilitates reduction in compliance cost in the long term; there is system to system integration between banks and FIRS; VAT collection in the banking sector went live in January 2017 and from Jan-Oct 2019 collected N25.6bn so far; VAT collection in the Cable TV sector went live in Dec 2018 and generated N5.1bn so far from Jan-Oct 18 2019.
“Integrated Tax Administration System (ITAS) project is a suite of programs that enables the automation of FIRS tax processes. As part of the Service’s objectives to bring high-level efficiency to tax revenue collection and provide first class services to taxpayers, ITAS project introduced SIGTAS, a solution that covers all aspects of tax administration in one integrated system.
“Government Information Financial Management Information System (GIFMIS) is an interface linking FIRS to the OAGF for real-time exchange of information and data; State Offices of Accountant General Platform (SAG); Automated the deduction at source and remittance of VAT and WHT from State governments contract payments directly to FIRS’s account and so far collected N13bn”, he said.
He noted that the deployment on online solutions, is making tax administration more efficient, transparent and convenient
Some of the FIRS services which could now be accessed electronically are: taxpayer registration (through e-Registration); payment of Stamp Duties (through e-Stamp Duty); payment of taxes (through online payment: e-tax pay); receiving of electronic receipt after payment of taxes (through e-Receipt); filing tax returns (through e-filing) and online Tax Clearance Certificates (TCC) through electronic Tax Clearance Certificate (e-TCC).
Fowler who also spoke on various tax incentives in Nigeria said Nigeria needed award on the international scene on the number of reliefs and incentives it grants to both local and foreign businesses.
“Sometimes when I look at these tax incentives and reliefs, I feel that Nigeria is the Father Christmas. But that is necessary for the growth of the economy because they attract investors”, Fowler said.
He urged foreign investors to consider Nigeria as their first option because of attractive tax incentives and reliefs and attractive end-price.
Fowler said there are attractive tax incentives and reliefs in Personal Income Tax Act, Companies Income Tax Act, Capital Gains Tax Act, Value Added Tax Act, agriculture and foreign investment.
For instance, under the Personal Income Tax (PIT), Fowler noted that the following tax reliefs are provided by the Personal Income Tax Act (PITA).
“There is Tax Credit Allowance. Tax credit allowable against tax payable on income derived from outside Nigeria if brought into the country through Government approved channels;
“Consolidated Relief Allowance. Section 33 (1) of PITA allows a Relief Allowance of N200,000 subject to a minimum tax of 1% of gross income whichever is higher, with the balance taxable in accordance with the Income table in the Sixth schedule to PITA.
“Returns Not To Be Filed Where Income Is N30,000 or Less. Section 43 PITA provides that no return of income shall be filed by a person whose only source of income in any year of assessment is employment in which he earns N30,000 or less from that source.
“Income Exempted. Section 19(1) PITA specifies several incomes that are exempted from tax, in the Third Schedule to the Act.
“Exemption of Interest on Loan Granted by Banks. Section 19(7) PITA exempts interest on any loan granted by a bank to a person engaged in: (a) agricultural trade or business; and (b) the fabrication of any local plant and machinery.
“Exemption of Dividend from Tax. The Third Schedule to PITA lists incomes exempted from Personal Income. Tax Paragraph 25 of the. Third Schedule to PITA exempts some dividends from tax.”, said Fowler.
Tunde Fowler (R) and Deputy Governor of Kwara State, Kayode Alabi. (Photo from FIRS)
Nigeria: States’ IGR Increased by 46.11% in four years—Fowler
The capacity of the 36 states in Nigeria to generate revenue internally has increased by an aggregate 46.11 percent, the Chairman, Joint Tax Board, JTB and Executive Chairman, Federal Inland Revenue Service (FIRS) Tunde Fowler has said.
Fowler said this happened under him as a result of some efforts of his organisation and its stakeholders.
Speaking in Ilorin, Kwara State in the North-Central Nigeria, Fowler said that the states have recorded a leap in from “N800 billion in in 2016 to N1.16 trillion in 2018 some 46.11 per cent under four years” in IGR.
A statement from FIRS also notes that Nigeria’s tax database has increased from 10 million to 20 million, with a target of 45 million taxpayers nationwide by December 2016
Fowler spoke in Ilorin today at the North Regional launching of the New Taxpayer Identification Number (TIN) Registration System and consolidated national tax database programme.
Fowler noted that the new system also provides immense benefits to the taxpayers. “The consolidated database apart from providing a unique identity to the taxpayer also facilitates ease of compliance. It limits the incidence of double taxation and is a prerequisite for a number of transactions such as sale and purchase of immoveable property, registration of vehicles, applications for plot of land, import and export licence, registration as a contractor, entry visas among others. Ultimately, the system promotes the ease of doing business for both individuals and corporate bodies.
Fowler listed the achievements of the JTB his tenure to include the following:
# The expansion of the tax base from 10 million to 20 million taxpayers with the potential for an increase of up to 45 million before the end of the third quarter of 2019; A growth in the IGR of States by over 46.11% from N800.02 billion in 2016 to N1.16 trillion in 2018; A growth of FIRS collections by 53.81% from N3.30 trillion in 2016 to N5.32 trillion in 2018; with the 2018 total collection of N5.32 trillion being the highest collection ever in the history of the FIRS, while Non-Oil Revenue, with a collection of N2.85 trillion accounted for 53.63% of total revenue collection;
# Payment by the Federal Government of the total sum of N135.8 billion
representing all outstanding PAYE tax liabilities owed by Federal MDAs to States from 2002 to 2016; with a total of N31.08 billion paid to the States in the North-Central Geopolitical Zone. We are confident that this gesture by the Federal Government will encourage State Governments to also reciprocate and promptly remit all Withholding Taxes and VAT due to the Federation Account;
#. A positive movement during the same period by Nigeria up 25 points in the Tax Administration Section of World Bank ‘Ease of Doing Business’. This positive progression is also reinforced by the recent listing of Nigeria as one of the ‘top 20 improvers in Doing Business for the year 2020’ by the World Bank. We expect that more positive country reports will be released by the time the full report by the World Bank is released in October 24th, 2019
The TIN Registration Go-Live event which has brought together all Tax Authorities with a common vision and goal, is poised to change the financial profile of Nigeria and particularly, lay a strong financial foundation to fund government at all tiers beyond aid, grants and borrowing”, he said.
Fowler commended the strides of the Kwara IRS under Dr Murtala Awodun. Said Fowler: “The choice of Kwara State as the host for the North-Central Regional flag-off event is strategic as it is in recognition of the path-finding role it has played in the quest towards ensuring sustainable internally generated revenue profile for the State as well as for the region.
“Over the years, the Kwara State Internal Revenue Service (KWIRS) has designed and executed far reaching IGR reforms that have seen it establish itself as a model Revenue Agency in the region. Following the signing of the Law granting it autonomy in June 2015, it has developed in leaps and bounds constantly seeking to achieve excellence in tax administration.
“Having achieved a 221% increase in its collection, from N7.1 billion in 2015 at the time of attaining its autonomous status, to N23 billion in 2018, Kwara State IRS has come to be a benchmark for revenue authorities, not just within the North Central region, but nationwide as well. It is also worthy of note that KWIRS is also the only State Revenue Agency in the country to have been ISO certified, with the ISO 9001 for Quality Management System and ISO/IEC 22301 for Business Continuity Management System.
“While Kwara State IRS continue to set standards, sister Revenue Authorities within the zone are not left behind as statistics indicate that Niger State with 60.05% and Nasarawa State with 22.56% are among the top fifteen States with an annual growth rate above 20% in 2018. This is coupled with the fact that the FCT IRS, in its first full year of autonomous operations is comfortably placed as the fourth highest sub-national revenue generating agency in 2018, behind Lagos, Rivers and Ogun States.
Fowler noted that the JTB under him is not doing badly at the level of promoting the nation’s business and financial health: Said the FIRS Chairman: Äs the process of securing the relevant data from the Central Bank of Nigeria (CBN) via the Nigeria Inter-Bank Settlement System (NIBBS), and the National Identity Management Commission (NIMC) as directed by the President are ongoing, we believe that today’s ceremony will further reinforce the need for us to work together as one towards ensuring a more friendly tax environment in the country, while promoting the various socio-economic initiatives of Mr. President such as the Strategic Revenue Growth Initiative, Ease of Doing Business and the Economic and Recovery Growth Plan.
The New TIN Registration System is geared towards reinforcing the laudable efforts of this administration towards building a robust tax-revenue administration system for the country and it aims to improve the ease of tax compliance while ensuring a sustainable and inclusive economy for all Nigerians.
“”Over the last four years, the economic policies of the current administration has focused on establishing a stable foundation for further socio-economic growth and development, and with the astute leadership of Mr. President, the milestones achieved bears ample testimony on the impact that has been made, not only in tax-revenue administration, but in the environment of doing business in Nigeria.
Governor of Kwara State, Mallam AbdulRahman AbdulRasak who was represented by the State’s Deputy Governor, Kayode Alabi also lauded the TIN initiative, saying that the payment of tax is change that everyone must embrace.
“Tax payment is integral to the growth and development of every economy and it must be embraced by every human who wants to see the change we all desire. We are very optimistic that this launch of TIN Registration System and consolidated National Database will indeed increase the coverage of taxpayers and simplify tax processes in the North-Central Geopolitical Region”, he said
When the new TIN tax database was launched by the Vice President in Abuja by Professor Yemi Osinbajo, two months ago, he noted that tax-revenue administration in the 21st century has evolved into “a systematic and deliberate process that is underpinned by the availability of accurate and reliable data. It entails deliberate and strategic planning initiatives, well informed and adequately equipped tax-revenue managers who drive the process both on and off the field.
The new generation of currencies were introduced to fight money laundering, counterfeits and corruption
Kenya’s New Currencies Begins Circulation, Tomorrow, October 1.
Today is the last day Kenya would use old 1,000 shilling banknote and other smaller denominations as legal tender.
The new currencies which were introduced in June, with customers given four months to exchange them for the new currency will come into circulation on October 1, 2019.
The governor of the Central Bank Patrick Njoroge said the operation was intended to tackle corruption and illicit financial flows.
The new generation of banknotes were introduced to fight money laundering, counterfeits and corruption, the government had said.
The design of the new currency, which features an image of a statue of Kenya’s first President, Jomo Kenyatta – the current president’s father, has sparked anger among some Kenyans.
A human rights activist challenged the use of the former president’s image arguing it contravened the constitution which outlaws the use of portraits of individuals in any currency.
The High Court ruled last week that President Jomo Kenyatta’s statue was not a portrait.
The court also declined to extend the expiry date of old Sh1,000 notes.
The old 1,000 shilling notes is being withdrawn to crack down on embezzlement and tackle counterfeits
In recent days, shopkeepers have reported a number of large transactions being made in cash – including that of a luxury Mercedes car.
One bar is offering to swap the banknotes for its clientele and is holding an “Old Notes Send Off Party”.
ECO-Currency not feasible in 2020, says Patrick Lumumba
ECO-Currency not feasible in 2020, says Patrick Lumumba
Leaders of the Economic Community of West African States (ECOWAS) have proposed the birth of common regional currency by 2020, but Kenyan anti-corruption crusader, Patrick Lumumba has said the earliest ECOWAS could have a common currency is in 2030.
Delivering a speech at accountants’ event in Abuja Nigeria on Tuesday, Lumumba faulted the approach of the ECOWAS leaders being championed by Nigeria’s president, Muhammadu Buhari.
Given this approach, Lumumba said the “the earliest to have the eco-currency is in 2030”
Recently, Heads of governments of the Economic Community of West African States, ECOWAS, converged in Niamey, Niger Republic again and discussed the proposal to launch a single currency for the West African sub region.
They proposed that the currency will be born next year, 2020 after missing the deadline for many years and shifting the deadline.
The goal of a common currency for ECOWAS, known as Eco Currency, was officially stated in December 2000 in connection with the formal launch of West African Monetary Zone (WAMZ).
However, challenges to implementation of the proposal have lied on member-countries meeting the criteria for the launch.
The four primary criteria to be achieved by each member country are: a single-digit inflation rate at the end of each year; a fiscal deficit of no more than 4% of the GDP; a central bank deficit-financing of no more than 10% of the previous year’s tax revenues and Gross external reserves that can give import cover for a minimum of three months.
There are other six secondary criteria to be achieved by each member country—prohibition of new domestic default payments and liquidation of existing ones; tax revenue should be equal to or greater than 20 percent of the GDP; wage bill to tax revenue equal to or less than 35 percent; public investment to tax revenue equal to or greater than 20 percent; a stable real exchange rate and a positive real interest rate.
Deficient in meeting the criteria, launch of Eco Currency has been postponed three times: from 2013 to 2014 to 2015 to 2020.
It is in connection to meeting the requirements for the 2020 launch of the currency that the heads of ECOWAS government have billed to meet in Niamey on Friday, to take another shot at.
In 2001, the West African Monetary Institute (WAMI) was set up with headquarters in Accra, Ghana. It is to be an interim organisation in preparation for the future West African Central Bank. Its function and organisation are inspired by the European Monetary Institute. Thus, WAMI is to provide a framework for central banks in the WAMZ to start the integration and begin preliminary preparations for the printing and minting of the physical currency , just as EMI did before in the Eurozone before the introduction of the euro.
Equatorial Guinea on the path of economic stability—Mba Abogo
Equatorial Guinea on the path of economic stability—Mba Abogo
The Government of Equatorial Guinea, represented by the Ministry of Economy, Finance and Planning (http://bit.ly/2lJ4Mqo), has concluded a successful mission at the 28th World Economic Forum (WEF) on Africa, which was held last week in Cape Town, South Africa. H.E. Minister Cesar Mba Abogo led a team of officials that joined more than 1,500 regional and global leaders to discuss how innovation, cooperation, growth and stability can help drive a sustainable future for Africa. He also touted favorable economic indicators in Equatorial Guinea and ongoing efforts to strengthen regional trade and stabilize Central Africa’s currency, the CFA.
“Equatorial Guinea’s presence at the World Economic Forum, provided a great opportunity to advance our country’s economic interests, engaging investors and strategic development partners,” the Minister said.
“The macro-economic indicators for Equatorial Guinea and the wider CEMAC region look very positive thanks to a stable oil price and major fiscal adjustments that have improved our ability to mobilize resources,” added the Minister. “We are creating value for our citizens that is of huge financial benefit for us. Equatorial Guinea is collecting more taxes and royalties that is showing a full recovery since the oil price collapse of 2014.”
At WEF Africa, the Minister outlined the country’s roadmap to accomplish the Fourth Industrial Revolution. He also touted the success of the three investment conferences being hosted in Equatorial Guinea this year, as well as the improving ease of doing business in the country and historic efforts to increase the availability of accurate and up-to-date statistics on the country and its economy. The Minister also discussed the importance of Equatorial Guinea’s membership in OPEC, whose historic oil production cuts have been credited with stabilizing oil prices and returning the industry to a new phase of investment.
“We cannot overstate the enormous value that belonging to OPEC has for Equatorial Guinea,” the Minister said. “For countries like ours which depend on oil revenues to fuel economic growth, it is vital that we have a voice in organizations that enable us to have a global impact and help us control our own destiny.”
“With the signing of the AfCFTA and the need to develop a stronger middle class and move people out of poverty, Equatorial Guinea is going to be more competitive, and more resourceful than ever,” the Minister concluded. “When we collaborate with our investors, we will create more jobs for our citizens and accomplish our goal of building a country where everyone benefits from the growth we create together.”
The Co-Chairs of the 2019 World Economic on Africa are Ellen Agler, Chief Executive Officer, The END Fund, USA; Jeremy Farrar, Director, Wellcome Trust, United Kingdom; Arancha Gonzalez Laya, Executive Director, International Trade Centre (ITC), Geneva; André Hoffmann, Vice-Chairman, Roche, Switzerland; Alex Liu, Managing Partner and Chairman, A. T. Kearney, USA; and Sipho M. Pityana, Chairman, AngloGold Ashanti, South Africa.
L-R: Executive Chairman FIRS and Chairman, ATAF, Tunde Fowler and Executive Secretary of ATAF, Mr. Logan Wort at the opening of ATAF Technical Workshop on VAT in Abuja, Nigeria on Monday
African taxmen target $1tr USD from VAT in ten years
No fewer than 30 delegates were among African tax experts charting ways to collect Value Added Tax (VAT) of more than a trillion dollars infrastructure investment in the continent for the next 10 years.
The delegates, under the auspices of the African Tax Administration Forum (ATAF), are holding ATAF Technical Workshop on Value Added Tax (VAT), in the Nigeria capital, Abuja.
Participants at the workshop are expected to share ideas on the ATAF VAT Technical Committee report that noted the infrastructural developments and worked on guidance on VAT issues arising from the construction sector.
Speaking at the event, the Executive Chairman, Federal Inland Revenue Service (FIRS), Mr. Tunde Fowler, noted that VAT remains a key indirect tax that has emerged as the highest source of tax revenue for most governments and countries that have implemented it.
“I have been briefed that the excellent turn-out at this technical workshop on VAT is representative of the different regions of the African continent. This underscores the focus revenue administrations and other interested parties are placing on VAT as a high revenue-yielding tax on the continent.
“Despite some challenges that may be identified, it is important for us during this workshop to apply our minds to how best we can effectively administer the tax, especially in ways that are equitable to the taxpayer.
“VAT as a key indirect tax has also emerged as the highest source of tax revenue for almost all governments that have implemented it. It is important to emphasize that the African Tax Outlook (2017) places VAT as the highest tax revenue earner, followed by PIT (Personal Income Tax) with CIT ( Companies Income Tax ) taking the 3rd position! This is mainly due to the nature of this tax which is paid by us all when buying goods or services.
“The tax is also simple to administer and furnishes governments with large amounts of income with relatively low collection costs based on its system of self-assessment.
The role of a national government therefore remains to monitor the VAT process and enforce where there are weaknesses,” he said.
Fowler added “In Nigeria, for example, where VAT is critical to development projects at all levels of government and where VAT revenue is shared 15 per cent to the federal government, 50 per cent to state governments and 35 per cent to local governments, FIRS wrote to all commercial banks in May 2018, requesting a list of Companies, Partnerships & Enterprises with a banking turnover of N1 billion and above.
This activity is aimed at ascertaining those companies that are compliant with the Tax Laws and those that are not compliant.”
The FIRS boss also stressed the need for the continent to improve on Domestic Resource Mobilisation (DRM) as a vital instrument to meet their development agendas and succeed in their poverty reduction programmes.
He said effective and efficient revenue policy and administration in countries continue to be one of the most consistent ways of achieving the developmental agenda of the Africa nations.
“As such, the concentration and drive to consistently refine the way countries assess and collect their domestic resources cannot be overemphasized. VAT in particular has been singled out owing to its nature as a tax that would not only bring in the much-needed resources but also lay the ground for gathering data that enables other taxes such as profit tax to be determined.
“It is in this regard that I wish to encourage this meeting to take time to identify the key pressure points and gaps in levying this tax that needs to be addressed. In particular, I wish to congratulate the VAT Technical Committee and to appreciate the hard work put into the analysis of the construction sector,” Fowler said.
Earlier, the Executive Secretary of ATAF, Mr. Logan Wort, noted that the digital economy presents new opportunities for revenue administration to feature innovation in system design for the collection, adding “Additionally, an opportunity is presented for tax policy to leapfrog current discussions and move towards regimes that collect revenue through the use of technology.
“Mr Chairman, you are aware of the growth of African economies and the massive investments our governments have made into infrastructure. Over a $trillion dollars is slated for investment towards infrastructure development over the next 10 years.
“I mention this because the continent is filled with new developments, high rise buildings and construction projects. The ATAF VAT Technical Committee has noted these developments and commenced work on guidance on VAT issues arising from the construction sector.
“The 2018 edition of Deloitte’s Africa Construction Trends report indicated that as of June 2018, Africa had 482 projects, each valued at 50 million US dollars or above. In total these construction projects were valued at 471 billion US dollars.
“This was an increase of 53 per cent of the total value of 307 billion US dollars recorded in 2017. In 2018, the top three countries in terms of construction projects were Egypt, South Africa and Nigeria.
“Egypt had the highest recorded number of projects, totalling 46 and accounting for 9.5 per cent of African projects. In terms of value, Egypt also topped Africa, recording projects worth 79.2 billion US dollars. This accounted for 17 per cent of the continent’s value of projects.
“This illustrates the practical nature under which the membership of ATAF will benefit from collection minds of Africans to deal with issues arising in industries on the continent. While construction is that of tangibility, the rise on the intangibles is common across the globe and indeed in Africa.
“Beset against the 4th industrial revolution, more and more, we realise that the ‘old way’ of going to a shop to buy a product may not be the most effective way when the same product is available online, and at times, cheaper.”
Wort also noted that e-commerce changed the distribution of taxable activities, poses challenges to the jurisdiction to tax income and alters the balance of taxing authority as well as resulting in the erosion of countries’ tax bases.
He said that the e-Commerce created difficulties in the identification and location of taxpayers, the identification and verification of taxable transactions and the ability to establish a link between taxpayers and their taxable transactions, thus creating opportunities for tax avoidance.
Wort said there was the need to develop rules to address the tax challenges of the digital economy, identification of the main challenges of the digital economy, a holistic approach to cover both direct and indirect taxation among others.
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