The Minister of Finance, Budget and National Planning, Zainab Ahmed, has said Nigerians will pay more taxes.
She said this has been captured in the medium term as proposed in the Finance Bill 2021.
The minister disclosed this Monday during a public hearing on the bill organised by the House of Representatives Committee on Finance.
She said: “While these issues may require modest increases in taxes and tariffs on certain businesses, sectors, industries and individuals over the medium term, this administration remains committed to continuous dialogue and engagement with all stakeholders and interest groups.”
Mrs Ahmed said Nigeria must diversify its revenues from oil to fund critical expenditures.
She said Nigeria also requires more fiscal reforms.
FG’s incomes in outgoing year
The finance minister said as of September 2021, the federal government’s retained revenue was N4.56 trillion, achieving 75 per cent of the budget while its share of oil revenues was N845 billion, representing 56.3 per cent pro-rated performance.
According to her, the “Federal share of non-oil revenues was N1.31tr (117.3% above budget). Companies Income Tax (CIT) and Value Added Tax (VAT) collections were N616bn and N274.4bn representing 121% and 153%, respectively, of the pro-rata targets. Also, customs collections were N418.97bn.”
The minister said the current fiscal policy stance was to let tax incentives with sunset provisions to naturally expire and not to automatically renew them without a detailed tax expenditure cost and benefit evaluation of the relative success of the incentives before extending them further.
She said there will also be an acceleration of the projected increase in tariff and excise duties on tobacco, alcohol and carbonated drinks to fund vital expenditure on health, education, and security as well as wholesale reform of antiquated stamp duties and capital gains tax regime.
In his opening remark, the Speaker, Femi Gbajabiamila, who was represented by the Minority Leader, Ndudi Elumelu (PDP, Delta), said the 2021 Finance Bill seeks to introduce strategic and broadminded, positive reforms that would engender best practice, statutorily check borrowing by local, states and federal governments.
“It is instructive to state that the essence of the 2021 bill is to further reposition our finance system to plug wastes, close openings for corruption, create opportunities for employment as well as stimulate stability and growth in our productive sectors, within the wider context of our quest for economic recovery in our country,” he said. The chairman of the committee, James Abiodun Faleke (APC, Lagos), said the committee will analyse the submissions by the various stakeholders as regards the proposed amendments and submit its report.
A member of the committee, Mukhtar Ahmed (APC, Kaduna), called on the finance ministry and the Nigeria Customs Service (NCS) to speed up the excise duty on carbonated drinks which, he said, will reduce the increasing cases of diabetes.
‘Too early to name taxes to increase’
When one of our correspondents sought clarification from the finance minister to give specifics on the taxes and levies to be increased, Mrs Zainab said it was too early to give specifics.
“That will be too early as we are working to complete the current one,” she told our correspondent in a text message.
However, a source within the Ministry of Finance who craved anonymity, said whilst the Value Added Tax (VAT) would likely not be increased even after the litigations around it were completed, stamp duty might be increased.
“Even after the court cases, VAT might remain at 7.5 per cent but stamp duties might be raised. I can’t say to what percentage but it may likely be reviewed upward.”
He also said excise duties, especially for alcohol and other luxury items would be increased, adding that the conversation was already on.
He said capital gains tax, company income tax and others would be increased.
Google set to invest $9.5bn in US
Google has announced plans to invest $9.5bn in its US offices and data centers around the country in 2022, up from more than the $7bn it spent in 2021.
According to CNN, the big bet on office space was coming at a point Google was embracing a hybrid work model. The Alphabet-owned company has called for many of its employees to work in an office three days a week after two years of being fully remote.
The Chief Executive Officer of Alphabet and Google, Sundar Pichai, said, “It might seem counterintuitive to step up our investment in physical offices even as we embrace more flexibility in how we work.
“Yet we believe it’s more important than ever to invest in our campuses and that doing so will make for better products, a greater quality of life for our employees, and stronger communities.”
Google said it would open an office in Atlanta this year and continue to develop and expand office space in Austin and New York. It added that it planned to continue investing in data centers in Iowa, Nebraska, and Tennessee, among other states.
As part of the announcement, Google said it expected to create at least 12,000 new full-time jobs at the company this year.
Google and other tech companies were among the first businesses to shift to remote work when the pandemic hit in early 2020. But that shift always appeared to be temporary. Like others in Silicon Valley, Google had previously invested billions in expansive campuses and lavish office benefits for workers.
European markets pull back amid doubts over latest Russian pledges over Ukraine
European stocks retreated on Wednesday following the latest round of talks between Russia and Ukraine, aimed at finding a solution to the conflict.
The pan-European Stoxx 600 fell 0.8% in early trade, with autos shedding 1.9% to lead losses, while oil and gas stocks gained 1.7%.
In terms of individual share price movement, Finland’s Nokian Tyres fell 6.6%, while Sweden’s Lundin Energy added 4.7%.
Investor sentiment was boosted on Tuesday following negotiations between Russian and Ukrainian officials in Turkey, at which Russia’s deputy defense minister claimed Moscow had decided to “drastically” cut back its military activity near Ukraine’s capital.
Alexander Fomin, who spoke following the talks in Istanbul, said Russia would slow its military operations near Kyiv and Chernihiv in order for peace talks to progress. Russia previously claimed that it would reduce military operations in other parts of Ukraine but then continued its advance.
Growing hope for a cease-fire appeared to boost investor sentiment Tuesday, as Dow Jones Industrial Average futures rose 200 points, or 0.6%. S&P 500 futures also climbed 0.6%, while Nasdaq 100 futures climbed 0.7%. Meanwhile, the price of U.S. benchmark West Texas Intermediate crude oil, which spiked on the heels of Russia’s invasion of Ukraine, fell more than 4% to $100 per barrel.
Doubts have set in over the pledge, however, and while the Russian military has begun moving some of its troops in Ukraine away from areas around Kyiv to positions elsewhere in Ukraine, Pentagon Press Secretary John Kirby warned the troop movements do not amount to a retreat.
Shares in Asia-Pacific were mixed in Wednesday trade as investors watch for developments surrounding the war in Ukraine. Stateside, traders are keeping tabs on a slew of key economic reports, while also monitoring the Federal Reserve’s planned interest rate hikes.
The Job Openings and Labor Turnover Survey on Tuesday showed 11.3 million job openings, higher than the 11.1 million expected. The ADP will also release its private payrolls data ahead of the closely watched monthly jobs report, on Friday.
Lagos Assembly kicks against harassment of residents by police
Lagos State House of Assembly Speaker, Mudashiru Obasa, yesterday, cautioned police in the state against harassment, intimidation and extortion of residents.
Obasa said this on the floor of the House when lawmakers honoured outgoing Commissioner of Police, Mr. Hakeem Odumosu, who has been promoted to Assistant Inspector-General, and is due to retire in January 2022.
Obasa said Odumosu was honoured as the first Commissioner of Police in the state to stand before the lawmakers and address Lagosians on his experience policing the state.
The Speaker thanked Odumosu for his openness and responsiveness to issues affecting the peace of the state.
“It is important to call on those behind you to know that the relationship between the police and the people need to be constantly improved upon,” Obasa said, adding that men of the Nigeria Police Force need to build more trust among the people.
“Everybody must be treated with respect, dignity and honour. And that is how we can earn respect. Policing should not be about harassment and extortion but building trust among the people and making them comfortable,” Obasa said.
The Commissioner of Police, who led a team of officers to the House, thanked the lawmakers for their support. According to him, nothing could have been achieved in terms of security and peace in the state without assistance of the House.
He said he would remain grateful to Lagosians for making it possible for him and his team to effectively manage the security of the state.
Odumosu, who described Lagos as ‘mini-Nigeria’, said proactivity of the Assembly led to the creation of laws that helped the police remain successful in the state.
He said the Cultism Prohibition Law also helped to reduce illegal associations in tertiary institutions in the state and enlightened property owners and residents.
“We promise to continue to excel in providing watertight security for people of the state,” he told the lawmakers. He also promised he would encourage his successor to sustain the relationship between the police and the House, while urging the lawmakers to extend their support to his successor.
“Policing Lagos is not a tea party. Without the laws in Lagos, it would have been difficult to police the state. Don’t get tired, don’t relent in making laws that would make Lagos maintain its place as the most peaceful state in Nigeria,” he said.
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