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Nigeria: Tax committee wants Customs duty rate pegged at N800/$

Published

6 months ago

June 2, 2024

An exchange rate of N800 per dollar for customs’ import duty for the remainder of the year has been suggested by the Nigerian Presidential Committee on Fiscal Policy and Tax Reforms.

This will be a significant difference from the current situation, in which customs duties are modified arbitrarily—sometimes twice a day, with a total of around 40 adjustments made this year. The value has also fluctuated sharply with the foreign exchange rate, ranging from N900 to N1,700 to one US dollar this year alone. This situation has drawn criticism from a broad variety of economic sectors.

Taiwo Oyedele, the committee’s chairman, revealed the new course of action yesterday during a speech about the tax panel’s operations in Lagos. The tax expert, a former partner at PwC Nigeria, claimed that firms are unable to prepare effectively because of the Nigeria Customs Service’s (NCS) frequent adjustments to the import duty rate brought on by the foreign currency market’s volatility.

His words: “When we did the budget, we said naira to the dollar will be N800, now it is way more than N1,000. People need to plan.

“So now, we are saying to the government, can you please sign an order that says for paying import duty, we shall use N800 for the rest of the year, till December. So, we have proposed N800.”

For import tariffs, customs usually uses foreign exchange rates that the Central Bank of Nigeria (CBN) recommends based on trading activity in the official foreign exchange market. This strategy has drawn criticism from numerous analysts who point out that it is detrimental to companies since it causes chaos in company planning.

The Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, suggested that the Customs establish a quarterly exchange rate for the assessment of import tariffs between N800 and N1000 as a workaround.

Oloyede added that the group has suggested merging the nation’s more than 100 separate tax collection organizations at the federal, state, and local government levels into the Nigerian Revenue Service, a single, central tax organization. According to him, the group also suggested instituting long-term appropriation and zero-based budgeting.

“The budget must be restructured to classify items under infrastructure, human capital investment, personnel cost and productivity, administrative overheads, debt service and sinking funds,” he said.

Related Topics:Featured Nigeria Taiwo Oyedele

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Food prices drive second straight monthly hike in Nigeria’s inflation

Published

2 days ago

November 17, 2024

Ifeoluwa Dada

According to official statistics released on Friday, Nigeria’s inflation rate increased for the second consecutive month in October, rising to 33.88% in annual terms from 32.70% in September, mostly as a result of increasing food costs.

In an attempt to boost economic development and strengthen public finances, President Bola Tinubu devalued the naira and reduced subsidies, which caused inflation to spike in the second half of last year.

As the effects of the naira devaluation started to lessen in July of this year, a slew of hikes in the price of petroleum and devastating floods that destroyed crops once again exacerbated pricing pressures, making the greatest cost-of-living crisis in decades worse in Africa’s most populous country.

According to the National Bureau of Statistics, price increases for basics such as rice, maize, bread, potatoes, and cooking oil prompted food inflation to surge from 37.77% in October to 39.16% year over year.

This year, more than 1.5 million hectares of agriculture have been damaged by torrential rain and floods in 29 of Nigeria’s 36 states, leaving millions hungry and displacing large numbers of people.

In an effort to curb inflation, the central bank has raised interest rates five times this year. On November 26, it is expected to make its final rate decision of the year.

VenturesNow

MTN financial report reveals drop in group service revenue

Published

2 days ago

November 17, 2024

Ifeoluwa Dada

Due to operational difficulties in Sudan and the depreciation of the Nigerian naira, MTN Group, Africa’s largest telecom provider, announced on Thursday an 18.5% decline in service revenue for the third quarter that concluded on September 30.

With 288 million users in 17 African regions, MTN said that its group service revenue dropped from 156.3 billion rand ($6.99 billion) in the same quarter of the previous year to 127.4 billion rand.

Despite stating that “the naira was less volatile on a sequential basis in Q3 than in preceding quarters,” the business reported a 48.7% decline in MTN Nigeria’s income due to the currency’s depreciation.

Due to a stronger Ugandan shilling than the previous year, Uganda’s largest contributor, MTN South Africa (MTN SA), expanded by a meagre 3.3%.

Due to “subscriber registration regulations in Nigeria and a decline in users in Sudan, where the conflict has displaced millions of people,” the business reported that its subscriber base increased by 1.6% to 288 million.

Given the higher demand in Nigeria despite the legal obstacles, MTN plans to increase its capital expenditures, which it expects would total between 28 and 33 billion rand for the entire year.