WHY N8.2 TRILLION FIRS REVENUE TARGET CANT BE ACHIEVED -EXPERTS
Some economic experts at the weekend expressed doubts over the ability of the Federal Inland Revenue Service (FIRS), to meet its N8.2 trillion revenue target for 2019
FIRS is the main agency of the Federal Government charged with responsibility of accessing, collecting and accounting for tax and other revenues accruing to the Nigerian authority.
According to those who reviewed the Service’s rather ambitious target for the current financial year, relying on the improved collection recorded in the past few years to index tax collection for the year under review would only amount to an illusion given the current parlous state of the nation’s economy.
They observed’ “Although the economy has tremendously recorded improvement and increase in tax collection due to some reforms being carried out by FIRS to boost tax administration in the country, the dream of the FIRS to meet the N8.2 trillion revenue target may be a tall order in the face of excruciating financial downturn on the part of businesses in the country.”
Going by the revenue target figures reeled out by the Executive Chairman of FIRS, Babatunde Fowler, on the sidelines of a high-level meeting on illicit financial flows hosted by the UN General Assembly in New York recently, about N1.5 trillion revenue had been collected between January to May 15, 2019.
The amount realised between January and the middle of May represents a paltry 18.7 per cent of the set target by FIRS.
The analysis noted that its effort to get an updated report covering the first and second quarter of the year proved abortive.
But available statistics showed that FIRS generated N12.62 trillion revenue from tax over the last three years.
A breakdown of the amount indicated that N3.3 trillion was generated in 2016, N4.02 trillion in 2017 and N5.32 trillion was realised in 2018, making it the highest revenue generated so far.
Reacting to the said target, a financial expert, Mr. Akinsanya Niyi, described the proposed collection of N8.2 trillion as ‘a tall order’ meant to spur performances by the personnel of the service, but not necessarily to be achieved.
Akinsanya explained that the tax law allows companies to pay for taxes of previous years up till the month of June of the successive years.
He, however, said that there was tendency for more taxes to be collected as companies prepared for the new national budget cycle.
He explained that many organisations would want to ensure compliance with tax laws so as to position themselves for job bidding.
According to him, there is the need for FIRS to ensure continuous sensitisation of the general public to the importance of tax payment as well as the need for strict implementation of some provisions of the laws to boost tax collection.
GENCOS PICK HOLES IN SIEMENS POWER CONTRACT
Generation companies (GenCos), have kicked against the recent power contract agreement signed between the Federal Government and Siemens AG without their input.
The Executive Secretary of Association of Power Generation Companies (APGC), Dr Joy Ogaji , who spoke on behalf of the generation firms observed that there are so much gaps in the contract which they would have filled if they were consulted.
According to her, the contract did not take into cognisance the GenCos expansion capacity plans.
“If you check the document, you will see how many companies they have consulted and you will not see a generation company. It is like you have signed agreement to sell 100 eggs by the end of July but you did not access how many hens that can produce those eggs. The assumption is that we have enough generation companies to produce that power. So, the government signing a contract on our behalf for 7,000mw, 11,000mw, 25,000mw in different phases without checking the challenges of the gencos, we do not understand. So, we are hoping that there is another document that captures the gencos which is yet to be released for us to review and see if it fits the bill. If you want me to produce more gas for a thermal plant, I need to pay my suppliers. Currently, we are being owed about a trillion naira and most of it will go to the gas suppliers that we are owing and who have refused to give us gas on credit. So, if you are projecting 7,000mw, I would expect Siemens to sit down with the gencos and the gas suppliers bearing in mind that over 80 per cent of power generated in Nigeria comes through gas sources. So, the Ministry of Petroleum—–the gas suppliers—– are the critical stakeholders you can’t overlook” she said.
Ogaji wondered why the Federal Government should target 7,000 megawatts when the nation is already generating 7,500 megawatts
“In the 7,000 mw, are we talking about installed? Are we talking about available? Are we talking about actual? This is because in the generation terminology, each of these three things means different things. An installed capacity means the machine capability. “Seven thousand megawatts is shortchanging us by 500 and above. If we are to start on the actual then 7,000 in 2021 is already constraining the gencos the more”, she observed.
FLUTTERWAVE OPENS UP AFRICA – CHINA TRADE WITH ALIPAY PARTNERSHIP
Africa’s leading payments technology platform, Flutterwave, has announced its partnership with Alipay of China, thereby opening up Africa’s market to Chinese buyers.
The partnership enables Flutterwave, a Nigerian-founded B2B payments service – primarily for companies in Africa to accept payment from customers on the continent and abroad – leverage on Alipay’s global network of more than one billion active users.
With a large portion of Alipay’s network situated in China, the shrewd move will see Flutterwave, capture payment activity around an estimated $200 billion in China-Africa trade, which Flutterwave CEO, Olugbenga Agboola, said would mean that “All our merchants can accept Alipay as a payment method. “
Commenting further on the initiative, Agboola said: “This isn’t an unprecedented move. The answer to why we’re opening up Africa to the Chinese buyers, lies in what we have set out to do since inception.
We set out to provide the complete payment solution for Africans to thrive in the global economy, and this is exactly what this partnership will achieve, as the complete payment solution would first require interconnectivity within Africa which we are already winning at, then connectivity from Africa to the world. In 2010, airlines averaged less than one flight a day between China and Africa. Now, it’s eight direct flights on the average. Imagine what being able to accept Alipay payments will do for duty-free shops at Africa’s airports for instance.”
Flutterwave , which counts Uber, Wakanow, Arik Air among other multinational businesses among its customers, seems to be winning in its mission to shrink the trading gap between Africa and the rest of the world.
N3.6 BILLION DEBT: AMCON TAKES OVER BAO YAO FUTURLEX
Following the order of Hon. Justice Binta Nyako of the Federal High Court Abuja, the Asset Management Corporation of Nigeria (AMCON) at the weekend took over ownership amd management of Bao Yao Futurlex Iron & Steel Company Limited in Abuja and Bao Yao Huan Jian Iron & Steel, Calabar, Cross River State.
The order mandates AMCON to take over all the assets of Bao Yao Huan Jian Iron & Steel Company Limited promoted by Mr Shen Yaozhang and General Idris Garba, retired over a staggering indebtedness of over N3billion.
In compliance with the court order, AMCON through Mr. Robert Ohuoba, the Receiver who also received protective orders from the court has taken possession of Bao Yao Futurlex Iron & Steel Company Limited, Abuja. Assets now under AMCON include Bao Yao Futurlex Iron & Steel Company Limited, Abuja as well as Bao Yao Huan Jian Iron & Steel Company Limited, Calabar belonging to the obligors.
The order also froze all accounts of the companies in all financial institutions in the name or belonging to the defendants, which include Bao Yao Futurlex Iron & Steel Company Limited; Bao Yao Huan Jian Iron & Steel Company Limited, Mr Shen Yaozhang, Mr Ji Yunfeng and Gen. Idris Garba (Retd.) and all financial institutions served with the order. The court also granted AMCON possessory order over all that piece of land consisting of buildings/factory and situated at Esuk Utan Village, Calabar, Cross River State, more particularly described as Plot A23 – A30, Calabar Export Processing Zone; All those chattles consisting of five Oil Tank Barges and seven Tug Boats among others, including pieces of land consisting of an acre and situated at Kaduna in the Kaduna Local Government Area, more particularly described as Plot No. 13, Idoma Close, amongst others assets.
Justice Nyako also sanctioned AMCON’s appointment of Mr. Robert Ohuoba, as Receiver over the business and stock in trade and over all fixed and floating assets of both companies wherever they may be found within the jurisdiction of the Federal High Court.
It further directed the Inspector-General of Police and the Commissioner of Police, in all the state of the federation to assist and protect the bailiffs of the Federal High Court and the Receiver, Mr. Robert Ohuoba to carry out the takeover.
Confirming that AMCON had already taken over the assets/properties as directed by the Court, Jude Nwauzor, Head, Corporate Communications, AMCON said, “We saw it coming because the said debt is long overdue. Like we have always said, going to court with obligors is usually the last resort for us as a Corporation. Whenever you see us take over a company as in this instance, it means we must have patiently tried to resolve the matter without going to court without success.
“Taking over the firm as directed by the court is an indication that all efforts by AMCON to get the obligors to amicably repay the indebtedness have failed. If you have exhausted all avenues of peaceful resolution, there is no other option left for AMCON than to commence enforcement action against Bao Yao Futurlex Iron & Steel Company Limited as well as Bao Yao Huan Jian Iron & Steel Company Limited as directed, which is also provided under Section 49-52 of the AMCON Act.”
MTN NIGERIA INVESTS N2 TRILLION AS MARKET VALUE CLOSES AT N2.6 TRILLION
MTN Nigeria Communications Plc has invested more than N2 trillion in its business operations over the past 18 years. The market value of MTN Nigeria closed at the weekend at N2.585 trillion.
MTN Nigeria, in a regulatory filing at the Nigerian Stock Exchange (NSE) at the weekend, indicated that it has invested more than N2 trillion since incorporation in 2001.
MTN Nigeria reiterated its commitments to the Nigerian economy, noting that it had paid more than N1.7 trillion in taxes, levies and other regulatory fees in its nearly two decades of existence.
The market value of MTN Nigeria dropped by 1.59 per cent to close weekend at N2.585 trillion. The share price decline came on the heels of what the telecommunications company described as “technical disagreement” with the Federal Inland Revenue Service (FIRS) over the tax treatment of the N330 billion fine imposed on the company for failing to deactivate more than five million unregistered SIM cards. MTN Nigeria had completed the payment of the N330 billion fine in May 2019 but the tax treatment remains a subject of judicial review at the Tax Tribunal. MTN Nigeria believes the N330b fine should be treated as part of operating cost and not subjected to any other tax but FIRS holds that the fine should be subjected to tax.
MTN Nigeria has remained Nigeria’s second largest quoted company since listing on the NSE in May 2019. MTN Nigeria last month earmarked N60 billion as interim cash dividend to shareholders as it released its first earnings report as a quoted company.
The board of the telco indicated shareholders will receive a dividend per share of N2.95 for the first half ended June 30, 2019. This however represented a drop of 17.83 per cent from N3.59 per share paid for the first half of 2018.
Key extracts of the six-month report for the period ended June 30, 2019 showed that MTN Nigeria’s profit before tax rose by 30.9 per cent to N141.8 billion in first half 2019 as against N108.35 billion recorded in comparable period of 2018. Profit after tax grew by 34.8 per cent from N73.4 billion to N98.93 billion. Total turnover grew by 12.12 per cent to N566.95 billion as against N505.67 billion. Operating profit had risen by 39.49 per cent from N136.50 billion to N190.4 billion. Earnings per share rose by 34.8 per cent to N4.86 compared with N3.61.
The report showed that the telco’s mobile subscribers increased by 3.3 million within the first six months of this year to 61.5 million while service revenue increased by 12.2 per cent. Voice revenue increased by 11.4 per cent, data revenue rose by 31.7 per cent while fintech revenue increased by 21.2 per cent. However, digital revenue dropped by 64.5 per cent. The company’s earnings before interest, tax depreciation and amortization (EBITDA) rose by 40 per cent to N304.9 billion while EBITDA margin improved by 10.7 percentage points to 53.8 per cent.
Nigeria is MTN’s largest market, accounting for one-third of the South African Group’s business. The telco last week announced that the Central Bank of Nigeria (CBN) has granted its subsidiary, Yello Digital Financial Services Limited (YDFS), full Super Agent Licence. The licence will enable MTN Nigeria to convert its existing airtime agents and recruit other small businesses to distribute financial services.
The telco stated that the Super Agent Licence will enable it to pursue its fintech strategy, as part of efforts to deepen financial inclusion in Nigeria.
Chief Executive Officer, MTN Nigeria Communications Plc, Ferdi Moolman described the first half performance as a solid performance as the company continued to invest to improve network quality and expand 4G coverage.
He noted that recent work on revamping data prices and accelerating 4G network has put the company in a strong competitive position to offer more value to customers and provide new impetus for overall corporate growth.
He said the listing of the company on the Nigerian Stock Exchange (NSE) in May 2019 demonstrated the company’s commitment to the Nigerian market while providing opportunity to domestic investors to participate in and benefit from the company’s growth.
“Our overriding priority for the rest of the year is to focus on our BRIGHT strategy to build a sustainable business and create value for customers. We will continue to progress in the second half of the year making improvements to our network experience, subscriber growth and enhance operational efficiency. We expect lower data pricing and our acceleration of the 4G network expansion to bolster the acquisition of customers and data traffic volumes in the second half,” Moolman said.
- WHY N8.2 TRILLION FIRS REVENUE TARGET CANT BE ACHIEVED – EXPERTS
- GENCOS PICK HOLES IN SIEMENS POWER CONTRACT
- FLUTTERWAVE OPENS UP AFRICA – CHINA TRADE WITH ALIPAY PARTNERSHIP
- N3.6 BILLION DEBT: AMCON TAKES OVER BAO YAO FUTURLEX
- MTN NIGERIA INVESTS N2 TRILLION AS MARKET VALUE CLOSES AT N2.6 TRILLION