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FG set to increase VAT to 10 %



The Federal Government is set to increase Value Added Tax from its current level of five per cent on goods and services to 10 per cent.

This was disclosed on Friday in Lagos by Mr. Sunday Ogungbesan, Acting Chairman, Federal Inland Revenue Service (FIRS), while speaking with the media.

The FIRS boss was, however, not forthcoming on when the increase would take effect, saying “It is only the Federal Government that can announce when it will take off.”

According to him, increasing the VAT was one of the measures being considered by the Federal Government to shore up the revenue of the country that had suffered a slide since the slump in crude oil price started last year.

Nigeria earns about 80 per cent of its revenue from oil exports.

Ogungbesan, who did not say what the effect of the increased of VAT would be on the people said the legislature and other critical stakeholders had already been briefed and the machinery to implement the new policy as soon as the government gave the go ahead was already in place.

The FIRS boss frowned upon some state governments’ policies which impose sales tax on residents of such states, which he said amounted to duplication of taxes.

As he put it, “The FCT, for instance, just introduced hospitality tax. This is similar to the VAT that would be paid by the same set of people.

This means the people are going to pay double tax on the same service. We have to find a way of resolving this. We should have a  system that makes tax payment attractive to the populace.”

Ogungbesan, who said some states have as many as 60 levies, added that such multiplicity of taxes would not encourage investment.

Speaking in a similar vein, Registrar-General, Corporate Affairs Commission (CAC), Alhaji Bello Mahmud, has called on the Chartered Institute of Taxation of Nigeria (CITN) to address the lingering issue of double taxation in the country.

According to the News Agency of Nigeria (NAN), this is contained in a statement issued by the commission’s Director of Public Affairs, Mr Churchil Williams, on Friday in Abuja.

The statement quoted Mahmud as making the call when the Registrar/Chief Executive of CITN, Mr Adefisayo Awogbade, led a team of the institute on a courtesy visit to the commission.

The statement quoted Mahmud as stressing the need for tax harmonisation to ensure that people did not suffer double taxation.

According to the statement, Mahmud noted that double taxation discouraged payment of tax, among other negative effects on the nation’s economy.

He advised officials of the institute to work closely with the Federal Government, especially in promoting public awareness on government’s commitment, to use taxes for public good.

Mahmud noted that public enlightenment was important to enable tax payers to appreciate the benefits of tax payment.

He added that this would help eligible persons to appreciate the benefits of tax payment and positively change the perception of tax evaders, the statement quoted him as saying.

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Netflix lays off 150 employees due to slow revenue growth and business needs



Netflix is reportedly laying off nearly 150 employees in the coming days due to disappointing earnings and slow revenue growth.

According to a Variety report, the Amazon Prime Video rival might also terminate its contract with contractual contributors.

The layoffs are about 2 per cent of Netflix’s US workforce. “As we explained [in reporting Q1] earnings, our slowing revenue growth means we are also having to slow our cost growth as a company. So sadly, we are letting around 150 employees go today, mostly U.S.-based,” a Netflix spokesperson said.

The statement further revealed that the decision was primarily driven by business needs rather than individual performance. Netflix reported $7.87 billion in Q1, which was short of Wall Street’s estimates of $7.93 billion.

The report further reveals that nearly 70 part-time employees in Netflix’s animation studio will have to pack up and leave. A report by The Verge stated that about 26 contractors working on Netflix’s fan-focused Tudum website might see a termination.

“A number of agency contractors have also been impacted by the news announced this morning. We are grateful for their contributions to Netflix,” the company said.

Netflix, in its recent earnings call, revealed that it lost thousands of subscribers, which is a first for the company in over a decade.

The company expects to lose an additional 2 million in the next quarter due to the ongoing war between Russia and Ukraine. Netflix has shut shop in Russia following the country’s invasion of Ukraine.

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Dollar breaks N600/$ ceiling ahead of party’s presidential primaries



Less than two weeks to the presidential primaries of the political parties ahead of the 2023 elections, the US dollar has broken the N600/$ mark at the parallel market and set the tone for a possible uptick in the coming days.

The black market rate had traded between N570/$ and N590/$ since the beginning of the year while the Central bank of Nigeria (CBN)’s intervention at the Nigerian Autonomous Foreign Exchange (NAFEX) has kept its rate under N420/$.

With the latest slump of the naira, the arbitrage between the parallel and NAFEX, which is regarded as the official window, is now inching close to N200/$. The spread measures the deviation of the controlled official rate from the real rate of exchange, with experts calling for liberalisation of the market to enable naira to find its true value.

The World Bank and the International Monetary Fund (IMF) have also warned of the repercussions of sustaining an artificially high naira while calling on the CBN to embark on market reform.

But the CBN has maintained that Nigeria, with the current high level of importation and underperformance of the industrial sector, cannot afford to float the naira completely as the exchange rate could spill out of control.

At the Lagos street market, yesterday, naira traded between N595/$ and N600/$ band. With the presidential primaries of the two leading political parties scheduled for Abuja next weekend, there is an expectation the demand pressure has not peaked, suggesting that naira is in for a protracted pressure.

At peer-to-peer (P2P) trading platforms, the dollar has been trading above N600 in the past three weeks, which had signaled that the black market rate could break through the psychological ceiling.

With that eventually happening, naira could be on a renewed free fall.

But there is also hope that it is a season to offload warehoused hard currencies for political campaigns to possibly shore up supply.

Experts are not sure where rising demand and supply of foreign exchange would lead the naira to, but the interplay between the movements of the two variables is a key factor in predicting the value of the naira in the tense political season. Godwin Owoh, a professor of applied economics, advised Nigerians to prepare for a steeper fall of the local currency, saying partisan politics and intra-party meetings, which are highly dollarised would bring much pressure to bear.

The CBN has promised to continue to protect the naira but its ability could be constrained by the equally falling reserve. For the first time in eight months, the gross reserves dropped below N39 billion on Monday, when CBN data put the figures at N38.92 billion. Effectively, the country’s reserves have depleted by $160 billion year-to-date.

Bismarck Rewane, an economist, had projected the reserve to collapse to $32 billion in the year as he expected the CBN to spend $8 to $10 billion defending the naira, which is taking much pressure from excessive importation.

The value of Nigeria’s imports increased by 64 per cent last year to N20.84 trillion. Sadly, the value of exports increased at a slower rate – 51 per cent – to N18. 91 trillion in the same period. The falling reserves and rising imports have put the apex bank in dire straits in its efforts to continue to defend the naira.

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Stock market sets new milestone as investors gain over N5tr in four months



Amid uncertainties in the global economy and rising insecurity in the country, the nation’s stock market continued its bullish run, giving hope to patient investors who endured long periods of downturn on the Nigerian Exchange Limited (NGX).

After getting to a rock-bottom low for several years, the equities market have recorded an unprecedented upbeat rally since the beginning of the year to emerge the best performing market in Africa and third in the world.

The NGX’s All Share Index (ASI), an indicator used to track the general market movement of all listed equities on NGX, crossed 53,000 mark to hit a 14-year high for the first time since 2008, as indices soared significantly by N5.4 trillion from the beginning of the year.

Specifically, market capitalisation opened the year at 43,026.23 to close on Friday, May 13, at 53,098.46 points for the first time since 2008, representing 19 per cent appreciation, while trading for the year opened on January 4 with N23,187 trillion to close on Friday at N28,625 trillion, representing N5,438 trillion increase.

The Chief Executive Officer, Wyoming Capital and Partners, Tajudeen Olayinka, hinged the upswing trend on improved system liquidity that is traceable to massive reinvestment of 2021 yearly dividends by investors, who received their payments recently from listed companies.

According to him, the fact that dividends are now paid electronically means that institutional investors who do not have immediate need for cash can reasonably deploy such dividends to more profitable stocks given the low and attractive

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