Archive for Money

Taxpayer identification number begins next month

Taxpayer identification number begins next month

The Federal Inland
Revenue Service (FIRS) yesterday said that the project to computerise
the nation’s tax system is billed to take off with the full
implementation of the Unique Taxpayer Identification Number (UTIN)
system in April.

The computerisation
system, which the service has been championing in conjunction with the
Joint Tax Board (JTB) in the last four years, is expected to become
available for taxpayers’ registration at pilot locations in November,
while nationwide operations are billed for April 2012.

Indications are
that the pilot phase of the system would become operational in eight
locations in the six geopolitical zones of the country, including
Lagos, Rivers, Delta, Adamawa, as well as the Federal Capital Territory
(FCT), Abuja.

Indications towards
the planned take off of the new tax system is coming just as the JTB
has renewed the call on the National Assembly to accelerate the process
towards the passage of Personal Income Tax (PIT) Bill as soon as they
reconvene from recess, to facilitate the realisation of the objectives
of the proposed law.

The PIT Amendment
Bill, which has been pending before the National Assembly for the last
three years, finally sailed through legislative deliberations before
the close of the 6th Legislative Assembly.

The call for the
passage of the law, which was amongst eight-point decisions at the
124th Meeting of the Tax Administrators in Abuja, would give some
relief to taxpayers, as it seeks to reduce the current rate from 20 per
cent to 17.5, even as government is convinced that the amendment would
also improve the tax compliance of taxpayers generally.

On the
administration of the existing PITA provisions, the Board urged all
federal, states and local government Ministries, Departments and
Agencies (MDAs) to ensure that the provisions were strictly adhered to
by deducting adequately all Pay-As-You-Earn (PAYE) taxes of their
employees.

Approved taxes

Ifueko
Omoigui-Okauru, FIRS chairman, in a communiqué after the meeting, said
the members also resolved to sustain their ongoing fight against
multiple taxation by increased public awareness campaigns at all levels
of government, including the publication of the list of approved taxes
and levies on a sustainable basis.

Similarly,
discussions on the proposed Enhanced New Drivers Licence scheme ended
with a resolution that adequate awareness about its take off on April
18 this year, even as the Board commended the initiative of the
Students’ Tax Advisory Initiative (STAI), while urging Nigerian youth
to take active interest in taxation as a fiscal policy option for
building a better Nigeria.

With these
resolutions, some of the member states may have shifted position on
their earlier subtle opposition to the proposed amendment of the Bill
in view of what they believe were its likely negative effects on their
Internally Generated Revenue (IGR) profile.

Some governors,
particularly those with High Internally Generated Revenue (IGR)
profiles, had begun moves to ensure that the proposed amendment to the
PITA was considered simultaneously with the proposed amendment of the
Value Added Tax (VAT) law, which they believed would offset some of the
revenue losses their states might suffer as a result of the amendment
of the former Bill.

The PIT is imposed on the income of all Nigerian employees or residents who derive income in Nigeria and outside Nigeria.

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Analysts doubt ability to execute gas plan

Analysts doubt ability to execute gas plan

Operators in the
oil and gas sector have listed steps that must be taken for the ‘gas
revolution’ project launched by the federal government to make any
meaningful impact. They said the atmosphere for the smooth sail of the
project cannot be laid in the little time the government has left.

President Goodluck
Jonathan had last week launched the project which he said will result
in foreign direct investment of about N410 billion over the next three
years.

According to him,
the full implementation of the entire gas master-plan agenda will
result in about $25 billion worth of investments in gas processing,
transmission, and downstream gas utilisation projects.

Following the
launch, some local companies like Oando have been selected to build
central gas-processing facilities at an estimated cost of beteween $2 –
$3 billion.

However, Dragan
Trajkov, oil and gas sector specialist at Renaissance Capital, an
investment bank, said “While we think it is almost impossible for
anyone to build a $3 billion project by the end of 2012, we understand
that the numbers might be presented optimistically in the light of the
ongoing presidential campaign,” he said in a report published this week.

A few observers
dismissed the launch of the project at the middle of electioneering
campaigns as just another political stunt by the government.

Not so bleak

Despite the
illusions of the revolution, some industry watchers say the
‘revolution’, if well executed, would help stop gas flaring and develop
the nation’s domestic gas market.

“The gas revolution
launched by President Goodluck Jonathan holds the promise of inducing
further development and growth of Nigeria’s domestic gas market,” Fola
Onasanya, oil and gas expert at Ciuci, a consultancy firm, said.

“With the $3
billion Central Gas Processing Facility (CPF) by Nigerian Agip Oil
Company (NAOC) and Oando Nigeria Plc, a huge sink will be created for
storing and utilising natural gas resources which otherwise could have
been flared, thus providing a boost to the economy both in terms of
value generation and job creation,” Mr. Onasanya said.

According to him,
so also will the Memorandum of Understanding (MoU) with Saudi Arabia’s
Xenel Industries Limited to construct a proposed 1.3 million tonnes/p.a
Petrochemical Plant in Warri, Delta State, along with five fertiliser
blending factories by Nagarjuna and Chevron.

“However, for these
moves to deliver their optimal gains and attract foreign investments,
key areas articulated in the Gas Master Plan need to be addressed by
strategic decisions and actions of the government,” Mr. Onasanya
further said.

Mr. Onasanya said
these include the issues relating to the gas pricing policy – which
provides a framework for the minimum price that any purchaser of gas
can be charged.

“This needs to be
tackled in the fair interest of all stakeholders (including the IOCs),
the Domestic Reserves Obligation – which aims to ensure the
availability of gas for domestic consumption in order to stimulate
economic growth – needs to be actualised and the Gas Infrastructure
Blueprint – which provides for the establishment of a network of gas
hubs which would ultimately reduce the cost of supplying gas – should
be implemented in full gear,” he said.

“Overall, the ‘Gas revolution’ is not over-ambitious, provided the government follows through with strategic actions,” he added.

However, a top
official of one of the major oil companies operating in the country,
who would not want to be quoted because he was not authorised to speak,
described the project as rather “ambitious”, adding, “It is a huge
project that would require huge foreign investment because it is
obvious that the government would not be able to do this alone.”

According to him,
there would be need for billions of dollars to cater for professionals
and the investment would be required for the plants that would be
required to carry out the processing and transmission of the gas. This,
he observed, cannot be done in a short term.

Nigeria’s oil
assets have been exploited for more than 50 years. However, while oil
companies have profited from the resource, local communities in the oil
rich but conflict struck areas live with the daily pollution caused by
non-stop gas flaring.

The country has
lost billions of naira on gas flaring, a process of burning off into
the atmosphere, surplus combustible vapours from an oil well, either as
a means of disposal or as a security measure to relieve well pressure.

Inability to solve
the lingering problem has been increasingly recognised as a huge
environmental problem in the Niger Delta region of the nation.

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Tullow oil in $2.9b Uganda deal

Tullow oil in $2.9b Uganda deal

British-based oil
explorer, Tullow Oil, has agreed to sell stakes in its Ugandan
operations to France’s Total and China’s CNOOC for $2.9 billion,
bringing in big partners to develop the oil fields.

Tullow said on
Wednesday it agreed to sell each company a one third interest in fields
around Lake Albert, which Tullow estimates to contain 1 billion barrels
of oil, and potentially as much as 3.5 billion barrels. Tullow will
retain a third share.

The deal leaves
unresolved a massive tax dispute with the government. Uganda’s energy
minister, Hilary Onek, said the country would receive a total of $472
million in taxes from the farm down deal.

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Egypt pound trades at weakest in years

Egypt pound trades at weakest in years

The Egyptian pound
weakened to a fresh six-year low to the dollar on Wednesday, as the
country’s poor economic outlook and political uncertainty prompted
investors to sell the currency.

It later regained some ground after investors bought pounds to invest in a stock market rally, bankers said.

The pound traded at
5.9640 to the dollar after hitting 5.9765 earlier in the day, a the
lowest since January 2005. It was down 0.29 per cent from Tuesday’s
close.

“The pound has weakened mainly because foreigners are exiting a
market hit by political instability,” said a Cairo-based trader. “Egypt
is getting downgraded, and for foreign investors, this is negative.”

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Heineken bids for two Ethiopian breweries

Heineken bids for two Ethiopian breweries

Heineken NV, the
world’s third-largest brewer, said it had bid a total of $163 million
for two breweries in Ethiopia, as it expands in the fast-growing
African market.

Heineken has
clinched deals in Nigeria, Rwanda, and South Africa in recent months,
eyeing rising incomes in Africa’s emerging markets.

“With its large,
growing population, political stability, improving economy and rapidly
growing beer market, Ethiopia is a promising, long-term growth market
for Heineken in Africa,” Heineken said in a statement emailed to
ANP-Reuters.

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Monument Bank enjoys N6b profit

Monument Bank enjoys N6b profit

Nigeria’s First
City Monument Bank said on Wednesday its pre-tax profit rose to 9.02
billion naira ($58 million) in 2010 from 856.6 million the previous
year, and declared a 0.35 naira dividend per share.

Gross earnings rose
to 62.67 billion naira from 35.79 billion naira in 2009, the bank said
in a filing with the Nigerian Stock Exchange.

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Morocco’s Central Bank keeps interest rate unchanged

Morocco’s Central Bank keeps interest rate unchanged

Morocco’s Central Bank held its benchmark interest rate at 3.25 per cent on Tuesday, citing a lack of monetary pressures on generally stable prices and resilience in an economy reliant on agriculture and tourism.

“In this context where … inflation forecast is consistent with the price stability objective and the balance of risks is slightly tilted to the upside, the (Central Bank’s) board has decided to keep the key rate unchanged at 3.25 per cent,” Bank al-Maghrib said in a statement.

The statement was issued on the bank’s website after a quarterly meeting of its policy making board that examined economic, monetary, and financial developments and inflation forecasts prepared by the bank up to the second quarter of 2012.

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Shareholders laud Exchange Commission

Shareholders laud Exchange Commission

The newly launched code of corporate governance for quoted companies at the Nigerian Stock Exchange has been welcomed by investors.

While some market watchers say the various regulations by the Securities and Exchange Commission (SEC) to restore confidence in the market have not yielded the intended results, some investors who spoke to NEXT yesterday said the new code initiative, if well enforced, will further boost investors’ confidence that has been eroded in the system.

Albert Edun, an executive member of the Nigerian Shareholders Solidarity Association, said that with the reviewed code of corporate governance, “I believe that companies will now be run in a transparent manner.”

“We, the investors, can then get accurate and reliable information that will allow us make informed decision on investment,” Mr. Edun said.

David Amaechi, an investment analyst and a member of the Shareholders Association of Nigeria, said the new code will boost investors’ confidence in quoted companies, “because the code now mandates companies to state in their annual financial results a corporate governance report detailing how they are complying with the corporate governance.”

“SEC and the review committee should be acknowledged because of this initiative,” Mr. Amaechi said, adding that enforcement of the code should be priority for the Exchange Commission to further boost confidence in the market.

A review committee, established September 2008, headed by Balarabe Mahmoud, was set up to review and update the 2003 code of corporate governance for public companies in Nigeria.

International best practice

At the official launch of the new code on Monday, Udoma Udo Udoma, chairman of SEC, said the corporate governance code was reviewed in the international best practice.

“In Nigeria, it became particularity important because of some of the unethical practice that was revealed in the administration of some companies,” Mr. Udoma said.

“The new code is formulated to guide corporate companies in the conduct of their affairs. While the application of the new code is limited to public companies, other companies are encouraged to use the principles set out in the code to guide their own activities. While the code sets out best practices, it allows companies to determine which one best suits them.

“Take for instance the issue of committees; while the code prescribes and describes the sort of committee each company should have, it leaves to the board of such company the power to determine which one and how many they need for their particular business; because it is clear that one type does not suit all,” Mr. Udoma said.

Christopher Kolade, a former ambassador to the United Kingdom, said at the occasion that every company must bring up to its board a kind of competence that is required to run a successful business.

Mr. Kolade said companies’ boards must also communicate with various operators in their organisations.

“Communication is key to the success of the organisation. Communication, not just in giving accurate information in good times, but also in giving accurate information in times that are not so good because that is the way to be transparent,” Mr. Kolade said.

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Mauritius cuts petrol pump prices to ease inflation

Mauritius cuts petrol pump prices to ease inflation

Mauritius will cut petrol pump prices to tame inflation, its finance minister said on Tuesday, a day after the Indian Ocean island’s Central Bank raised its benchmark repo rate for the same reason.

Pravind Jugnauth told parliament diesel costs would come down 5.3 per cent while unleaded fuel costs would be 3.9 per cent lower once the cut came into effect at 2000 GMT on Tuesday.

Mauritius, which imports all of its oil-based fuel requirements, was selling petrol at a government-controlled 51.3 rupees on Tuesday while diesel traded at 43.5 shillings.

“This will help curb inflationary pressures and maintain good conditions for a reasonable growth rate,” Mr. Jugnauth said.

Mauritius has been surprised by a faster-than-expected rise in consumer prices during the last six months, due partly to a shock 1 per cent repo rate cut in September amid what the Central Bank then called a benign rate of inflation.

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Japan donates $600,000 to ECOWAS anti-drug war

Japan donates $600,000 to ECOWAS anti-drug war

Japan donated
600,000 dollars to the Economic Community of West African States
(ECOWAS) Commission on Monday, in Abuja, to combat drug trafficking in
the sub-region.

The Japanese
ambassador in Nigeria, Mr. Toshitsugu Uesawa, while presenting the
cheque, said the gesture was part of the country’s effort to checkmate
the rising wave of drug trafficking and organised crime in the
sub-region.

“This time, I am
more than happy to be here to present a sort of small contribution to
the area of drug trafficking. We want to continue our little efforts to
have good relations with ECOWAS because ECOWAS has a huge potential,”
Mr. Uesawa said.

The envoy decried
the menace of drug trafficking in the region and stressed the need for
better governance and cooperation among ECOWAS member states.

He noted that combating drug trafficking would help bring peace, stability, security, and economic growth to West Africa.

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