Nigerians are likely going to pay more taxes in the coming year as federal government plans to increase taxes in order to tackle revenue shortfalls. This is according to a statement issued by the Minister of Finance, Mrs. Zainab Ahmed, who said that new tariffs and levies would be introduced in 2022 to stimulate Nigeria’s economic growth.

Mrs. Ahmed made this known on Monday while addressing some stakeholders at a public hearing on the 2021 Finance Bill organized by the House of Representatives Committee on Finance in Abuja.

According to Vanguard, she said that a couple of reforms and amendments had been recommended in the draft 2021 Finance amendment bill, adding that more reforms would be introduced by the middle of 2022.

She explained that while modest changes had been proposed, more fiscal reforms were in view as the ministry could not take all the proposals collected from stakeholders.

“Our aspiration is to do a midterm review with a possibility of another Finance Bill in mid-year 2022 to bring in more amendments. There are ongoing cases in court against the Federal Government on the Value Added Tax (VAT) and stamp duties, which was why the ministry stayed off those areas.

“We prepared this draft bill along five reform areas, the first domestic revenue mobilization, the second is tax administration and legislative drafting, third is International taxation, fourth is financial sector reforms and tax equity and fifth is improving public financial management reform.

“The provision in the draft bill is proposing to amend the Capital Gains Tax Act, Company Income Tax, FIRS Establishment Act, Personal Income Tax, Stamp Duties Act and Tertiary Education Act, Value Added Tax, Insurance Police Trust Fund and the Fiscal Responsibility Act.

“This is to amend the Police Trust Fund Act and the Nigerian Trust Fund Acts, the purpose is to empower the FIRS to collect the Nigerian trust fund levies on companies on behalf of the fund itself.

“Currently, because there is no such provision, the FIRS is unable to start collecting on behalf of the fund. Also, it is to streamline the tax and the levy collection from the Nigerian companies in line with Mr. President’s administration ease of doing business policy.

“So we do not have NASENI going out to collect that tax, the FIRS will collect on their behalf during their collection process and it will be passed through to them,” she said.

Ahmed said that the bill was a product of the President Muhmmadu Buhari’s commitment made while presenting the 2022 budget to the joint session of the National Assembly on October 8, 2021, explaining that the ministry had worked with relevant stakeholders and Fiscal Policy Reform Committee to draft the 2021 Finance bill.

Since the past six years, Nigeria’s financial crisis has spiraled, slipping out of government’s control. With oil revenue, which is Nigeria’s main source of Gross Domestic Product (GDP), depleted, the country has taken to borrowing to fund its budgetary allocation. But the bloating debt burden has become a cause of major concern to Nigerians, as the loans taken by the government is believed to not commiserate with Nigeria’s infrastructural development and economic growth.

Last week, there was a report that federal workers would not be paid their December salaries due to revenue shortfalls. The Debt Management Office (DMO) said Nigeria’s total public debt has risen to N35,465 trillion as of June 30 2021. This means, currently, the federal government is spending over 98% of its revenue on debt servicing.

Seeking a way out of this predicament, President Buhari’s administration has taken to tax increment, starting with the upward review of Value Added Tax and the introduction of Stamp Duty tax. The new plan to amend Financial Bill 2020, which will include reviewing Capital Gains Tax Act, Company Income Tax, FIRS Establishment Act, Personal Income Tax, Stamp Duties Act and Tertiary Education Act and Value Added Tax upward, indicates that apart from borrowing, taxation seems to be Nigeria’s only alternative for revenue generation – but it may hamper Nigeria’s economic recovery.

In the wake of covid outbreak, many countries acted to limit the resultant economic hardship by providing liquidity support to businesses to help them stay afloat, and providing income support to vulnerable households.

Measures taken include extending deadlines for tax filing, the deferral of tax payments, the provision of faster tax refunds and tax exemptions. These measures were recommended for every country, including developing countries like Nigeria, hardly hit by covid’s economic downturn.

“Tax policy should continue to focus on limiting hardship while maintaining the ability for a quick rebound …. The best way to boost tax revenue will be to support solid growth, including through sufficiently strong and sustained stimulus,” the OECD said in its policy response to covid-19.

Nigeria is still grappling with meagre disposable income crisis buoyed by struggling businesses and high unemployment rate. Thus, government’s plan to increase taxes is seen as adding nails to the coffin of its ailing economy.

At Tekedia Capital Syndicate in the just concluded cycle, our members came out big to support a Texas-based startup which is going to run a digital bank with laser-focus on immigrants and global citizens. 

We are at the last phase of US regulatory approval to go live, and we hope we will conclude this month. Largely, we need to make deposits (like the money you deposit with the Central Bank of Nigeria as it works on your license; the apex bank will return that money later) as the regulator requires.  Our members have helped to raise the funds needed.

Imagine selling from Nairobi to African diasporas, in New York, and they can see your business as a local “US” business, reducing payment frictions. We are launching with support for at least 36 countries (ramping to 66 fast). You can sell and at the end of the month, you can remit via us (we have a money transfer license) to your local country. #disintermediation on the way to old global paytech ordinance.

We’re Tekedia Capital, we’re funding innovators of the future https://school.tedia.com/tekedia-capital/

When your numbers are great, you become a great presenter before the Board. But even if you are an orator, if your numbers are poor, you struggle. To become a good presenter, you need to lead. Be a leader and not a boss at the early stage of your startup. Help people get things done. Let’s help you at Tekedia Startup Masterclass where we teach the physics of startups.

A great startup founder is not driven by title but by the need to get the job done. The person can do sales, marketing, coding, etc just to make sure the startup survives. The person answers to the team and leads by example.

I have never seen a good founder who is a boss at the early stage of a startup! But I have seen great founders who are servants to all even at the same time mentoring and coaching everyone.

To execute an entrepreneurial call to mission, founders #LEAD, not #BOSS.

His generation’s finest innovator and possibly the world’s first trillionaire is Time’s Person of the Year. We’re living in the age of Elon Musk: brilliant, peerless, bold, fearless, enigmatic and AFRICAN by birth. Yes, out of South Africa, he drank from the purest of streams and today, he is leading the human species for a possible future where we can travel to other planets, possibly enabling new eras of civilization.

As the world debates on China’s rise, Elon Musk can unlock a new world and drop the key with America. He is the most important heartbeat in this world because he has the most power to create a “new world”.

As the Igbo Nation says, it takes the killing of one leopard to be called a killer of leopards, Elon through Tesla, SpaceX and upcoming Boring has CHANGED his generation and the world. That market has anointed him The Richest among us is simply a ticket for his ascension, leaving the solid bounds of this earth into the ecclesiastical planets of outer heavens where he will possibly rule as a landlord.

Hope you save to join him because soon the auction will begin: one plot of “land” in outer space goes for $$. LEGENDS!

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Comment 1: Whether we or Time congratulate Elon or not, the market has congratulated him with a really tall net worth.

The good thing about Elon is that he has more Moral Capital than his peers. If you noticed, Elon is probably the only high net worth billionaire that people genuinely fan about. He’s genuinely passionate about the progressive development of civilisation as opposed to accumulating wealth as an end.

While Google and Facebook keep optimising and optimising for Ad Revenues by aggressively invading people’s privacies with cookies and more cookies despite knowing that the people really hate it, Elon, as a brand, is pushing the boundaries of our possibilities as a civilisation.

While Amazon ramps up America’s trade deficit by chosing to make everything in China, including the very containers for its shipping vessels and lorries, basically turning America into a dump site for Chinese manufacturers at the expense of the American economy, Tesla makes his cars in its key markets, largely contributing to those markets, little wonders nations are willing to subsidise to have the company but not Amazon, a benefit that Elon now thinks aren’t quite necessary.

Elon is a real Revolutionary and a reminiscence of the American Dream.

Comment 2: Whether TIME gives Musk Person of the Year trophy or not, it neither increases nor diminishes him, same way telling a beautiful woman that she’s beautiful doesn’t increase her beauty, she’s already beautiful…

But just like other billionaires who once topped the exclusive list, most people only remember or talk about them from the standpoint of their wealth, and not really what they possess internally. The size of wealth is ephemeral, but what need to wow discerning mind are their intellectual capital, the quality of their judgments, visioning capability, courage, and of course the unparalleled execution capabilities. The material wealth can go up or down, but with those internal qualities, you remain eternal.

The man Musk is an outlier, he doesn’t say what those wearing nice suits like to hear sometimes, but they are forced to find ways to work with him, because he’s smarter than all of them put together. Conventions only apply to normal creatures, but if you are different, a different set of rule will have to be formulated, Musk belongs in the latter.

MTN and Mafab Communications have won Nigeria’s 5G spectrum auction: “The commission fixed the base price at $197.4 million. The two winners got the nod of the regulator at $273 million”. That means Airtel, Glo and others are going to return to the drawing board as this asset class could redesign the sector many years from now.. 

Yes, I am not moved by 5G in Nigeria to be that significant in the immediate near future. The fact remains that many would be fine with 3G or 4G if they are available and reliable. So, forget the nomenclature and demand for quality service irrespective of the technology generation. If 3G is reliable, many would be fine in Nigeria. 

Yet, congrats to MTN and Mafab – they are possibly going to make it possible for civil servants to be paid this December. Please send the alerts fast once you get the invoices; Nigeria needs money.

To NCC, well done. You remain the best agency or government unit in that nation.

MTN and Mafab Communications Limited have won the bid for the 5G spectrum auctioned by the Nigerian government Monday.

The Nigerian Communications Commission conducted the auction at the Transcorp Hotel in Abuja for the available two slots for the 3.5 GHz spectrum.

MTN Nigeria, Mafab Communications Ltd, and Airtel Networks Ltd participated in the bid using the Ascending Clock Auction System.

Nigeria needs money and there are many ideas which are evolving in the nation especially on VAT: “The Finance Bill is proposing an amendment to section 10 of the VAT, by introducing a new section 10, putting the burden of VAT on non-resident digital companies rather than non-resident individuals.”

The Minister of Finance, Budget and National Planning, Zainab Ahmed, has said the proposed amendment to the Finance Act will ensure that Amazon and other digital companies become Value Added Tax collectors for the Federal Inland Revenue Service (FIRS).

Ms Ahmed said the bill, which emanated from the executive arm of government, if passed by the lawmakers and assented to by President Muhammadu Buhari, will reduce ambiguity and restrict VAT obligations to digital non-resident companies.

The minister spoke in Abuja on Monday at the public hearing into the bill.

The hearing was organised by the House of Representatives Committee Finance.

Mr Buhari had transmitted the bill to the two chambers of the National Assembly last week Tuesday.