VenturesNow

Nigeria reconsiders waivers as annual tax incentives hit N6tn

Published

8 months ago

September 2, 2023

Nigeria’s Presidential Tax Reform Committee has pushed for a reduction in tax waivers to corporate entities in the country as tax incentives hit N6tn annually.

The committee Chairman, Mr Taiwo Oyedele, said the body had undergone comprehensive tax waiver review in line with the plan the previous administration had set.

According to earlier reports, the average annual tax waiver amount was over N5 trillion. Several businesses, including Jigawa Rice Limited, Dangote Sinotrucks West Africa Limited, Lafarge Africa Plc, Honeywell Flour Mills Nigeria Plc, and Stallion Motors Limited, among others, had benefited from tax exemptions due to their pioneer status.

Others also include African Foundries Limited, Royal Pacific Group Limited, Kunoch Hotels Limited, Princess Medi Clinics Nigeria Limited, Medlog Logistics Limited, and Masters Liquefied Gas Limited.

Oyedele, while addressing joutnalists in Abuja, said, “Incentives in and of themselves are not bad. But you will also agree with me that as time changes, you need to also review what you have done for years.”

He added that Nigeria had about N6tn annual tax expenditure, which needed to be reviewed.

“When you don’t look at your incentive regime, it can get to a point when it becomes a distortion for economic growth because some people benefit and others don’t but they operate in the same sector; so, they cannot compete. You also have to think about it from the point of view of cost benefits. As a country, if we are giving away N1, we need to be able to convince ourselves that the benefit we are getting is more than N1. Otherwise, that is no longer an incentive for the economy but for some individuals.

“If you look at our tax expenditure reports over the past three to four years, on the average, we are giving away around N6tn per annum. That is significant. What we have not been measuring enough is the benefit we are getting from that.

“But I can confirm to you as part of the mandates given to us by Mr President is to look at the incentive regime in Nigeria so that we can based on data and evidence, design what is appropriate for us as a country. In terms of what we want to drive, those incentives will be targeted, data-driven, evident-based, and in most cases, we have subset clauses so that they don’t last forever and we will only find out after losing so much money,” he stated.

The drop in investment and the lack of public funding that impedes development have both been linked to tax policies across the continent. Several nations, including Senegal, Kenya, and Nigeria, recently proposed tax revisions. Beyond widening the tax base to include more “common men” or middle-class people, however, some experts argue that governmental initiatives must be made to collect taxes owed by corporations, local and international alike.

VenturesNow

ExxonMobil ‘optimistic’ over Mozambique LNG project

Published

1 day ago

May 3, 2024

Ifeoluwa Dada

According to a company spokesman on Thursday, ExxonMobil is “optimistic and pushing forward” with its postponed Rovuma liquefied natural gas (LNG) project in Mozambique and anticipates a final investment decision before the end of next year.

In offshore Area 4 in northern Mozambique, ExxonMobil and its partner Enivare are developing the Rovuma LNG project. Exxon is in charge of building and running the onshore liquefaction and associated facilities, while Eni is focused on the Coral floating LNG and upstream activities.

ExxonMobil was also impacted by the development of shared and common facilities, such as an LNG jetty and offloading facility when TotalEnergies declared force majeure in 2021 in response to an offensive by militants linked to the Islamic State that threatened its Area 1 Mozambique LNG project.

“We recognise there are challenges and there are. We recognise that those challenges can be overcome if we work together,” Arne Gibbs, general manager at ExxonMobil Mozambique, told an energy conference in Maputo.

“My message is quite simple … We are optimistic, we are pushing forward,” he said of a project expected to enter a front-end engineering and design (FEED) phase in a few months.
Originally planned for 15 million metric tons per year (mtpa), the project has been changed to a modern, electric, modular facility capable of producing 18 mtpa of LNG, which is more flexible and emits fewer harmful pollutants, according to Gibbs.

“It was important to change our design to a project that is ready-made, that is fit for purpose for the current business environment, including the attention to CO2 emissions and GHG (greenhouse gases),” he added.

Credit Agricole declared in March that it would not lend money to two significant LNG projects, including Rovuma, on the grounds that it had made a pledge to abstain from further fossil fuel ventures.

According to Gibbs, the business acknowledged that the intervention of a regional military force and Rwanda’s military assistance to Mozambique had resulted in a notable improvement in the security environment.

In February, Exxon announced that it was keeping an eye on security developments in the province of Cabo Delgado, where terrorists affiliated with the Islamic State have been launching new attacks this year.

VenturesNow

Nigeria’s Insurance Corporation raises maximum deposit coverage from N500k to N5m

Published

1 day ago

May 3, 2024

Ifeoluwa Dada

The maximum deposit insurance coverage levels for Deposit Money Banks has been raised by the Nigeria Deposit Insurance Corporation (NDIC) on Thursday from N500,000 to N5 million.

At a news conference in Abuja, NDIC Managing Director Bello Hassan declared this effective immediately. He said, “For Deposit Money Banks, the increase of the maximum deposit insurance coverage from N500,000 to N5,000,000, would provide full coverage of 98.98% of the total depositors compared with the current cover of 89.20%. Regarding the value of deposits covered, the revised coverage would increase the value of deposits covered by deposit insurance to 25.37% compared with the current cover of 6.31% of the total value of deposits.

“The increase of the maximum deposit insurance coverage from N200,000 to N2,000,000 would provide full coverage of 99.27% of the total depositors compared with the current level of 98.76% and would increase the value of deposits covered by deposit insurance to 34.43% compared with 14.38% of the total value of deposit, currently covered.

“The increase of the maximum deposit insurance coverage from N500,000 to N2,000,000 would provide full coverage of 99.34% of the total depositors compared with the current 97.98% and would increase the value of deposits covered by deposit insurance to 21.04% compared with 10.77% of the total value of the deposit, currently covered.”

Additionally, Hassan said that increasing the maximum deposit insurance coverage for primary mortgage banks from N500,000 to N2,000,000 would cover all depositors, or 99.99% of them, and increase the value of deposits covered by deposit insurance from the current 40.60% cover to 43.10% of the total deposit value.

Additionally, the Corporation increased the maximum pass-through deposit insurance coverage for each Mobile Money Operator subscriber from N500,000 to N5,000,000.