Items filtered by date: Friday, 05 April 2019
Friday, 05 April 2019 13:11

IMF backs Nigeria on VAT, tax increase

The International Monetary Fund (IMF) has thrown its weight behind the planned increase in Value Added Tax (VAT) by the Federal Government.

The Organisation also encouraged the country look into increasing other forms of taxes, from non oil revenues, as a means of raising more funds.

This was disclosed on Wednesday in a press release after the conclusion of the IMF Executive Board 19 Article IV Consultation with Nigeria.

The Executive Directors said with 2.5 percent in the medium term, and with population growing at a faster rate, growth per capital will be less than zero percent.

The statement read in part, ‘’They welcomed the authorities’ tax reform plan to increase non-oil revenue, including through tax policy and administration measures.

‘’They stressed the importance of strengthening domestic revenue mobilization, including through additional excises, a comprehensive VAT reform, and elimination of tax incentives. Securing oil revenues through reforms of state owned enterprises and measures to improve the governance of the oil sector will also be crucial.’’

 

It also called on the Central Bank of Nigeria (CBN) to stop its direct intervention in the foreign exchange market.

“They stressed the importance of strengthening domestic revenue mobilization, including through additional excises, a comprehensive VAT reform, and elimination of tax incentives.

“Directors highlighted the importance of shifting the expenditure mix toward priority areas. They welcomed, in this context, the significant increase in public investment but underlined the need for greater investment efficiency.

“They also recommended increasing funding for health and education. They noted that phasing out implicit fuel subsidies while strengthening social safety nets to mitigate the impact on the most vulnerable would help reduce the poverty gap and free up additional fiscal space.”

The Directors also emphasized the need to strengthen governance, transparency, and anti-corruption initiatives, including by enhancing AML/CFT and improving accountability in the public sector.

‘’Directors also recommended establishing a credible time bound recapitalization plan for weak banks and a timeline for phasing out the state backed asset management company AMCON,’’ part of the release stated.

Published in Bank & Finance

The Central Bank of Nigeria, CBN, is set to device a new means of liquidity management in order to reduce associated expenses.

The Deputy Governor in charge of Corporate Services at the CBN, Mr. Edward Adamu, stated this on Wednesday when he presented the 2019 budget proposal of the apex bank on behalf of the bank’s Governor, Godwin Emefiele to the House of Representatives Committee on Banking and Currency.

Adamu, who gave a summary of all the vote heads and commitments of the bank for 2019, explained that the bank remained committed to sustaining stability in the financial system, in addition to pushing policies that would continue to engender growth in the Nigerian economy.

The Chairman of the committee, Jones Onyereri, acknowledged the efforts of the CBN at managing liquidity, urging the apex bank to do more by further enlightening members on the dynamics of liquidity management.

Published in Bank & Finance

Algeria’s long-time leader Abdelaziz Bouteflika has agreed to step down following a series of mass protests against his original plan to bid for a fifth term.

After weeks of uncertainty, the country’s military chief Ahmed Gaed Salah declared the 82-year-old leader constitutionally unfit to rule. An interim leadership will be formed under the supervision of the army. Everything seems to suggest that the country is heading towards elections and a constitutional referendum.

Some observers have drawn parallels between events in Algeria and the “Arab Spring”. These mass demonstrations against corruption and acts of police brutality which swept through North Africa from 2011. The pro-democracy uprisings led to the overthrow of three authoritarian regimes: Tunisia’s Ben Ali, Libya’s Muammar Gaddafi and Egypt’s Hosni Mubarak.

Political pundits and analysts drawing these comparisons may be tempted to speculate about hidden agendas, or deplore the lack of a common ideological framework for the opposition. This is because, in countries where opposition forces failed to cohere in a meaningful way, the 2011 revolutionary momentum was easily hijacked by counter-revolutionaries.

But these debates miss the point. They overlook the social and cultural value of the Algerian protests. They also reveal that the international community has remained centred on the question of political stability since the civil war of 1991-2002. In fact, the singular achievement of these demonstrations is that Algerians have reclaimed ownership of their past.

This is apparent in the way that protesters invoked the memory of the war of independence. It could also be seen in their allusions to slogans or songs from that time, calling for “Algeria’s liberation”.

The memory of Algeria’s liberation was politically hijacked by the elites who’ve held power since the 1954-1962 Algerian war of independence.

The Oujda Group

During the independence war against France, the National Liberation Army placed Bouteflika in charge of the western border, close to the Moroccan city of Oujda. He became part of the Oujda group led by Houari Boumédiène. It was Boumédiène who helped Ahmed Ben Bella unseat the first post-independence provisional government in 1962.

Boumédiène then became defence minister, and had much influence over the government through the army. Bouteflika became foreign minister. Following political tensions at the top Boumédiène overthrew Ben Bella in a 1965 military coup.

Under the military-led National Liberation Front, Algeria was a one party state until the 1989 constitution introduced a multiparty system. Bouteflika became a member of the Front’s central committee when serving as a foreign minister. With the help of interior minister and the head of intelligence, he took office in 1999.

Bouteflika was initially able to gain popularity by acting as if he intended to break with his predecessors’ anti-colonial and pan-Arab traditions. He capitalised on the imperative of national security to build legitimacy in the aftermath of the civil war. Algeria remained under a state of emergency for almost 10 years after the end of the civil war. This was known as Algeria’s “black decade”.

Beyond the country’s borders, Bouteflika proved popular. The international community was particularly receptive to this narrative in the context of the post-9/11 “war on terror”.

Under Bouteflika

Under Bouteflika, the penal code was amended to impose punishments for any “insulting or defamatory” statement likely to harm the president. This law saw independent journalists and human rights advocates repressed in the name of national security.

During the same period, a law was promulgated which granted amnesty to terrorists guilty of committing crimes during the civil war. Implicitly, this new law exonerated members of the Algerian secret services. Many of them had served with the Armed Islamic Group. This was one of the two main Islamist insurgent groups that fought the Algerian government and army in the Algerian civil war.

Historically, the power elite – made up of the military, the secret services and the Political Bureau of the National Liberation Front – built its legitimacy on a distorted memory of the war of independence. This arguably added to Algeria’s post-colonial identity crisis and the climate of polarisation that laid the ground for civil war.

Bouteflika later capitalised on the trauma of the “black decade”, while depriving Algerians of the economic and social resources they needed to cope with the growing challenges regarding migration, climate, water scarcity and security. Ironically, this is partly the reason why the question of political stability still prevails today.

Looking ahead

This history demonstrates why the debate around today’s political crisis often misses the mark and ignores the real issues. It’s important to fully appreciate what it means for Algerians to reclaim ownership of their history with confidence – and to consider a world beyond Bouteflika’s troubled leadership.The Conversation

 

Dounia Mahlouly, Senior Teaching Fellow, Social & Political Sciences, SOAS, University of London

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Published in Economy

Shell Petroleum Development Company of Nigeria Limited (SPDC) and Shell Nigeria Exploration and Production Company Limited (SNEPCo), in 2018 paid a total of $6.397 billion to the Nigerian government through the Nigerian National Petroleum Corporation (NNPC), Federal Inland Revenue Service, (FIRS), Department of Petroleum Resources (DPR) and others.

This payment from production entitlement and tax in 2018 was contained in the company’s Sustainability Report, titled, ‘Industry Associations Climate Review; Nigeria Briefing Notes; and Payments to Government Report’, released in Lagos on Tuesday.

Shell added that the payment represents a 48 per cent increase over payments by the companies to Nigerian government in 2017 which was $4.322 billion.

A breakdown of the 2018 payments showed that, the Shell companies paid $3.776 billion to the Nigeria National Petroleum Corporation as production entitlement while $1.286 billion was paid in taxes to the Federal Inland Revenue Service, adding that another $1.253 went to the Department of Petroleum Resources for royalties and fees, while $81.5 million was remitted to the Niger Delta Development Commission.

Group Chief Executive Officer of the Royal Dutch Shell, Ben Van Beurden, stated: “The payments formed part of the four documents released, to signal Shell’s renewed commitment to greater transparency.

“Shell must remain at the forefront of the drive for greater corporate transparency. We will continue to be more open about what we do and why we do it.”

The Managing Director of SPDC and Country Chair, Shell Companies in Nigeria, Osagie Okunbor, also described the reports as a further testament to Shell’s efforts to increase transparency around activities that are important to investors, governments and civil society.

Published in Bank & Finance
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