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Senate Passes Finance 2021 Bill

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Senate yesterday passed the Finance Bill 2021, transmitted to the National Assembly by President Muhammadu Buhari, on December 7.

The passage of the bill followed consideration of a report by the Joint Committee on Finance; Customs, Excise and Tariff; Trade and Investment.

Presenting the report, the Chairman of the Joint Committee, Sen.

Solomon Adeola (APC-Lagos), said the bill seeks to support implementation of the 2022 Federal Budget of Economic Growth and Sustainability by proposing key specific taxation, customs, excise, fiscal and other relevant laws.

According to him, a total of 12 Acts were amended under the finance bill which contains 39 clauses.

He said the bill seeks to promote fiscal equity, align domestic tax laws with global best practices, introduce tax incentives for infrastructure and capital markets, support small businesses and promote increase government revenue.

“The Finance Act 2020 was predicated essentially on having no new taxes and no new incentives due to the COVID-19’s impact on the economy as such it was structured across four broad thematic areas.

“Enacting counter cyclical measures and crisis intervention initiatives; Tax, fiscal responsibility, and public procurement reforms; Reforming fiscal incentives policies for job creation; Ensuring closer coordination of monetary, trade and fiscal policies; and Enhancing tax administration,” Adeola said.

According to the report, approved by the Senate, the Joint Committee, based on its observations, recommended that 5 per cent Capital Gains Tax to be imposed on shares’ disposal transactions where gains exceed N250 million in 12 calendar months.

It recommended that gaming and lottery companies, as well as oil and gas companies to be taxed.

It underscored the need for midstream and downstream oil and gas companies to be made liable to corporate tax without the benefit of tax exemptions for firms exporting goods to earn foreign exchange.

The Committee observed that doing so would prevent double-dipping by gas utilization companies such that they cannot claim both (1) 3-year Tax Holidays; as well as (2) Petroleum Profit Tax Act Incentives or (3) Pioneer tax Holidays under IDITRA.

It advocated for qualifying Capital Expenditure rules for small and pioneer companies, to prevent double dipping by mandating that companies cannot deduct qualifying capital expenditure.

This, it said, is to reduce their taxable profits where the relevant qualifying Capital Expenditure is used to generate tax – exempt income.

It sought more powers for the Federal Inland Revenue Service (FIRS) to collect NPTF levies on Nigerian Companies on behalf of the fund and to streamline tax levy collection from Nigerian Companies in line with President Buhari administration’s ease of doing business reforms.

The committee also emphasised the need for the Federal Government to ensure that FIRS deploys both proprietary and third-party technical applications to collect information from taxpayers, enhance confidentiality and non-disclosure and to enable them investigate tax evasion and other crimes and sanction non-compliant tax payers.

It further called for the FIRS to be empowered to assess Non-Resident Firms to tax on fair and reasonable turnover basis on Turnover earned from digital services to Nigerian customers, with a further mandate to appoint persons for the purpose of collection and remittance of non-resident taxes.

It demanded necessary reforms on securities lending transactions, minimum tax for insurance companies and companies in general, taxation of unit trust income, real estate investment trust, and insurance companies capitalization by NAICOM in line with tax equity.

It urged the government to mandate FIRS as Principal Tax Revenue Collection Agency to collaborate with other law enforcement MDAs in streamlining tax collections by enhancing Public Financial Management reforms.

According to the report, doing so would reduce revenue leakages and better track actual expenditure to revenue performance in line with the provision of the Constitution of the Federal Republic of Nigeria 1999 (as Amended), Fiscal Rules and other Extant Money Acts.

It also called for the diversification of Nigeria’s revenue from Oil sector to other sectors to fund critical expenditures.

It demanded an increase of 0.5 per cent in educational tax, pushed for close monitoring of unfolding development and policies on VAT, tax incentives, projected increase tariff on tobacco, alcohol and carbonated drinks to fund vital expenditure on health, education and security, with a possibility of introduction of new taxes, tariffs and levies as the economy recovers.

Meanwhile, the Senate also passed a bill to amend the 2021 Appropriations Act.

The bill, sponsored by Senate Leader, Yahaya Abdullahi (APC-Kebbi), scaled through second and third readings after it was considered during plenary.

The 2021 Appropriations Act (Amendment) bill seeks to extend implementation of the Capital aspect of the Appropriation Act 2021 from December 31, 2021, to March 31, 2022. (NAN)

Economy

Value Addition is new Standard in Mining Operations – Alake

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The Minister of Solid Minerals Development, Dr Dele Alake has declared value addition as the new indispensable standard for mining operations in the country.

Alake made the declaration in a statement issued by his Special Assistant on Media, Mr Segun Tomori, on Tuesday in Abuja.

The minister had earlier said that the federal government had resolved to ensure compliance to value addition before permitting investors to operate.

He said that his seven-point agenda for the ministry had placed the mining sector on the global front burner since assuming office, which had generated renewed interest from the international community in Nigeria`s mineral resources.

According to the statement, the minister lauded a mining company, African Natural Resources and Mines Ltd.

(ANRML), during an inspection tour in Kaduna State, for its 600 million dollar facility dedicated to the mining and processing of magnetite iron-ore.

He described the move as in line with the government`s resolve for value addition, which is especially apt given President Bola Tinubu`s quest to develop the solid minerals, to boost Nigeria`s economic profile and to meet the global upsurge in energy transition.

“The company aligns with our vision of value addition and beneficiation through its processing of iron-ore, and I urge other mining companies to take a cue from them, “ he said.

He reiterated the government`s commitment to abstain from granting mining licenses to companies that lack the necessary plans for value addition.

The minister acknowledged that resilience, courage and laying a solid foundation were critical in contributing to the company success.

He added that such factors also serve as guidelines for President Tinubu`s administration in its efforts for economic transformation.

“ We have set our minds in this administration and invariably in Nigeria to achieve success, that is why Mr President is restructuring the economy.

“When this company (ANRML) started seven years ago, we saw one of the foundations through the video documentary, the amount of concrete that went in to erect a foundation, just to carry a giant edifice.

“That is what we are going through. When we get through the gestation period, the results will manifest, and it will herald prosperity, “he said.

The minister had stated that no license would be granted to companies wishing to enter the mineral sector without presenting a plan for value addition, such as processing and refining which has multiplier effect on the economy. (NAN)

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BUSINESS

NASS Seeks Collaboration with WTO on Improving Digital, Marine Economies

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By Eze Okechukwu, Abuja

The Nigerian delegation at the on-going 148th Assembly of the Inter-Parliamentary Union (IPU) in Geneva, Switzerland has sought the collaboration of the World Trade Organisation (WTO) in the area of Digital and Marine economies.

Addressing the WTO media shortly after a courtesy visit to the Director General of the WTO, Dr Ngozi Okonjo Iweala in her office in Geneva on Monday, the leader of the Nigeria delegation, Senator Godswill Akpabio said the delegation were at the WTO to look for areas of collaboration with the organisation in the various sectors of the economy for the overall benefit of Nigerians.

According to him, “We used our attendance at the IPU to pay courtesy visit to one of Nigeria’s very costly export to the world, Dr Ngozi Okonjo Iweala; the Director General of the WTO.

We came to thank her for the job she is doing for the world and thank her staff for supporting and standing by her to succeed. We, in Nigeria are very proud of her.”

“We had discussions on the various developmental programmes of the WTO and we noticed that there were spaces where Nigerians can become major players. We discussed issues affecting trade back home in Nigeria and ways in which the National Assembly can assist in removing barriers, through legislation for the benefit of our people.

 “We also talked about issue of regulations concerning Digital economic contents, illegal finishing along the coastal states of Cross River, Rivers, Akwa Ibom and Bayelsa states. How Nigerian women could benefit from the recent program funded by the organization was also discussed. The establishment of a Digital trade portal, where-in, all trade information could be accessed by our people top our discussion with the WTO. “

Akpabio noted, “The deliberations were fruitful and we are confident that with our support in all of these, Nigerians would be the better for it.”

In his brief remarks, the Deputy Speaker of the House of Representatives, Benjamin Kalu said, ” our best export to the world took her time to bring us up to speed on the various innovations and initiatives of the WTO and what Africa and Nigeria stand to benefit from. We are going back more refreshed because we have seen a space here for Africa to thrive in business and in trade.”

Speaking in the same vein, the WTO chief described the visit of the Senate president and the Deputy Speaker, to her office as “a huge honour. We were able to talk on those things we are doing at the WTO that would help make a material difference for Nigerians.

“We spoke of recent program that we launched in some development program from the standards and trade facilities to help in improving sanitary and vital sanitary standards for some of the crops in Nigeria, so that it helps in diversifying the economy to even fisheries and illegal mining of the waters of Nigeria.”

According to her, “A lot of things on the table have already been discussed. I am honoured by this visit and I am home-sick.”

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Economy

Life Insurance Records 95% Net Claims in Q4 2023-NAICOM

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The National Insurance Commission (NAICOM) says Life insurance business recorded about 95 per cent net claims of the total claims in the fourth quarter of 2023.

A report by NAICOM in Abuja on Tuesday hinted that the record was due to the direct reflection of the ongoing regulatory measures by the Commission regarding claims settlements.

NAICOM said the insurance market average stood at about 71.

4 per cent of the N536.
5 billion gross claims reported at the close of the fourth quarter.

The Commission said the market also recorded retention of about 87.7 per cent for the life business, 54 per cent for non-life while the aggregate market average retention stood at 66.

7 per cent for the period.

It showed that the insurance industry sustained its progressive trend of positive market performance at the close of 2023 fourth quarter.

According to NAICOM, the insurance market recorded a milestone growth to close at N1.003 trillion, representing about 27 per cent growth compared to the N790 billion recorded in 2022.

”Major growth drivers in the non-life segment of the market were oil and gas and fire Insurances contributing 27.3 per cent and 24.1 per cent respectively.

”In a direct reflection to the “no-premium no-cover” policy of the Commission, the outstanding premium continues to decline.

”The premium posted 1.6 per cent as outstanding of all the premiums generated in the market during the period.

”Statistics also shows that the market recorded total assets of about N2.67trillion and capitalisation of N851billion in 2023,” NAICOM said. (NAN)

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