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Effective tax drive key to states’ financial independence – Sanwo-Olu

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…Fowler: ‘Lagos Set The Pace For Tax Administration’

…JTB Flags Off New Tax ID In Southwest

An aggressive tax drive through the tech-driven process will wean federating States from overdependence on federal allocations, Lagos State Governor, Mr. Babajide Sanwo-Olu, has said.
Lagos, Sanwo-Olu said, understood the challenges associated with overdependence on federal handouts early enough, prompting the State to pursue an inclusive revenue generation push to achieve financial autonomy and reduce its reliance on crude oil earnings.

The Governor spoke on Thursday when he officially flagged off the new National Taxpayers Identification Number (TIN) Registration System and Consolidated National Taxpayers Database in the Southwest region.

The new TIN was introduced by Joint Tax Board (JTB) – a body headed by the Executive Chairman of Federal Inland Revenue Service (FIRS), Mr. Babatunde Fowler.

Sanwo-Olu said the sustenance of Lagos’ tax collection drive in the last 20 years had helped to insulate the state from the effects of the decline in revenue derived from Federal Account Allocation Committee (FAAC), arising from the 2014 crash of global crude oil prices.

He said: “With improved tax revenues, governments of the federating states can begin to wean themselves from an overdependence on crude oil earnings. In Lagos, we very much understood the importance of this early enough.

“The overwhelming success of our tax collection drive over the last 20 years has helped, in no small measure, to insulate Lagos from the worst effects of the decline in FAAC allocations resulting from the 2014 crash of global crude oil prices. Many other states in the federation were not as fortunate.”

To achieve improved revenue generation, the Governor said there was the need to pursue efficient tax compliance among the citizens, pointing out that an improved tax collection and tax compliance drive would be a win-win policy for the government and the people.

He said: “We know that as the level of tax compliance rises, citizens are more inclined to hold their governments accountable and demand a higher quality of governance and service.

“Citizens everywhere in the world are constantly seeking easier ways of engaging with their governments and fulfilling their civic responsibilities. It is the duty of governments to respond to this need by removing barriers that inhibit compliance.”

How would the government achieve higher tax compliance? “It is through technology,” Sanwo-Olu declared, adding that a tech-driven process remained the vital tool that should be leveraged by the government to actualise the purpose.

He said: “This new Taxpayer Identification Number Registration System demonstrates the transformative power of technology as a significant contributor to the ease of doing business reforms, both at the national and sub-national levels. More critically, this also aligns with our agenda of leveraging technology to drive change across various economic sectors.

“I believe there is still a lot of room for improvement on the progress made but this laudable initiative we are flagging off today will go a long way in bridging tax deficit by capturing eligible tax payers within the tax net.”

The Governor praised the JTB and FIRS for the introduction of “a smart, innovative and technology-driven solution” in achieving higher tax compliance.

Sanwo-Olu urged the media to play its role in educating the public on the importance and benefits of the new tax collection approach.

Fowler, in his remark, said it was instructive Lagos was picked as a suitable location for the flag-off of the new TIN Registration System in the Southwest, noting that first-ever tax transformation effort started in the state in 1999.

The FIRS boss said the Southwest was the largest contributor to the tax generated in 2018 among sub-national zones. This, he said, was as a result of vibrancy in economic activities in the zone.

He said the new TIN Registration System would not only improve the efficiency of the tax administration system but would also reduce the cost and challenges associated with the tax collection process.

JTB Executive Secretary, Mr. Oseni Elamah, said the new registration system had addressed the challenges of multiple registrations previously experienced, adding that it had also strengthened transparency in the collection process.

After unveiling the new TIN certificate, FIRS chairman presented Gov. Sanwo-Olu with his certificate.

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Bank, oil & gas stocks drag market N72bn lower

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Banking and oil and gas stocks have further dragged the market lower, shedding N72bn as the market capitalisation of equities dropped to N12.930tn on Wednesday.

The market capitalisation of equities, which increased to N13.049tn on Monday, dropped to N12.975tn on Tuesday, and N12.930tn on Wednesday, bringing the total losses recorded in three days to N119bn.

Analysts at Afrinvest Securities Limited said the bearish outcome on Wednesday was due to major losses in FBN Holdings Plc, Access Bank Plc, and Dangote Cement Plc as the All Share Index fell by 35 basis points to close at 26,790bps.

The activity level weakened as volume and value traded fell by 9.6 percent and 52.2 percent to 189.860 million units and N1.5bn, respectively.

The most traded stocks by value were Transnational Corporation Plc (26.3 million units), Zenith Bank Plc (22.5 million units) and Chams Plc (18.9 million units) while Zenith Bank (N416.4m), Guaranty Trust Bank Plc (N207.1m) and MTN Nigeria Communications Plc (N120.3m) led by value.

Performance across sectors was largely bearish as four indices recorded losses.

The insurance and AFR-ICT indices gained following buying interest in Wapic Insurance Plc, Aiico Insurance Plc, AXA Mansard Insurance Plc, and Airtel Africa Plc.

On the flip side, the oil and gas index topped laggards, losing 1.1 percent on the back of a major price decline in Oando Plc, while sell-offs in Access Bank, Sterling Bank, and Cadbury Nigeria Plc dragged the banking and consumer goods indices down by 0.5 percent and 0.2 percent, respectively.

The industrial goods index declined by 0.08 percent due to losses in Dangote Cement.

Investor sentiment weakened as market breadth (advance/decline ratio) fell to 0.7x from the 1.0x recorded on Tuesday as 19 stocks gained against 26 losers.

Analysts at Afrinvest said they expected a mixed performance for the rest of the week.

-Punch

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Reps will end overbearing regulation of Private Businesses in Nigeria – Gbajabiamila(Full Text) 

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TEXT OF KEYNOTE ADDRESS BY THE SPEAKER OF THE HOUSE OF REPRESENTATIVES OF THE FEDERAL REPUBLIC OF NIGERIA, RT. HON. FEMI GBAJABIAMILA, AT THE 13TH ANNUAL BUSINESS LAW CONFERENCE OF THE NIGERIAN BAR ASSOCIATION- SECTION ON BUSINESS LAW ON WED. JUNE 26, 2019 AT EKO HOTEL, LAGOS
PROTOCOL
I am deeply honoured to speak at this, the 13th Annual Business Law Conference of the Nigerian Bar Association – Section on Business Law. I thank the organisers of the conference for the gracious invitation to deliver the keynote address on the theme of Growth, Investment and
Employment: Beyond Rhetoric. That you have chosen this particular theme is evidence that you recognise as I do that our most serious challenge as a nation at this time, is the challenge of building an economy that is sufficiently robust to spur innovation, create jobs and ensure that all our citizens can live full lives of achievement and accomplishment.
The challenges we face are significant, but not insurmountable. We cannot be overwhelmed by them. Our best course, is to be critical of established thinking, of shibboleths that have outlived their utility and bold in seeking out and implementing new ideas. For too long, we have been required to accept that only slow incremental change is possible. I dare to differ. I believe that our present circumstances impose on us a mission of radical, rapid change, of impossible things made possible. At this time in our history, we are called to work at doing the hard things, the big deeds and we cannot fail. Too much depends on us, too many lives, too many hopes, dreams and aspirations are at risk if we take too lightly the awesome responsibilities to which we have been called. This period in our history calls for nothing short of a new covenant of public service based on public interest rather than private ambition. It is to this ideal that we must now commit ourselves.
We cannot look to government alone for solutions to unemployment and slow economic growth. The private sector from which many of you come will always be the primary driver of economic growth. Our job in government, particularly in the legislature is to use the instruments of legislation and policy to create a more enabling environment, to use the appropriations process to make investments in critical infrastructure and ensure that in the capital expenditure, priority is given to projects that have the potential to open new markets and transform communities by making them more attractive to foreign and local investors. Our role is to renew public faith in government by making a limited set of important promises and achieving them, by governing in the interest of the vast majority of our people who live their lives well, contributing to their communities and feel understandably cynical about a political system that too often feels as if it is intended to serve only the interests of the few at the expense of the many.
Investment is a sine qua non of employment and they both enjoy such symbiosis that one cannot be without the other. Whether the investment is government or private, it must exist for there to be growth or employment as they feed off each other
In the last four years, government has pursued a program of increased investment in transportation and power infrastructure. We have worked to increase year on year the amount of money set aside in the federal budget for construction of new roads and bridges, train lines and port maintenance. Many of the projects thus far invested in are ongoing and as such have not yet started to positively affect economic output. Laudable as they are, these investments are still insufficient to address our present and pressing infrastructure needs. Too many years of under investment in essential infrastructure has left us with significant deficits, estimated in some quarters to be in excess of $900b (Nine Hundred Billion US Dollars). This, coupled with the fact of reduced government income due to the global collapse in oil prices and the need to service other obligations, means that even the increased allocations to infrastructure development still fall far short of what is required to build up to where we need to be and to prepare for the future.
A more robust framework for public private sector partnership in funding infrastructure development across the country is needed. The statutory and policy framework currently in place has proved unfit to drive cooperation and private sector investment to the extent that is required. Therefore, we will in this 9th national assembly seek to review existing statutes and policy with a view to ensuring that what we have in place works for the purposes for which they were intended.
A critical concern of mine, borne out by my interactions with many leaders in the private sector is that we have a regulatory process that is so burdensome it has become a bane to businesses. The regulatory function of government is essential, but it should not hinder innovation, or hinder investment. Its primary purpose is to promote best practices so that our companies can be competitive in a global market place. We want to a more balanced economy, where we are not so dependent on a narrow range of economic sectors and we need to take urgent action to boost enterprise and develop a more responsible economic model. A systematic audit of government regulations particularly as it relates to taxation, environmental standards, employee protections will allow us the opportunity to end tick box regulation and cut red tape in the Federal Government. We will reform the corporate tax system by simplifying the process for reliefs, tax breaks and allowances, and more aggressively tackling avoidance. And we will consider the possibility of a ‘one in – one out’ rule whereby for every new government regulation implemented, another existing one will be exited to remove bureaucratic bottlenecks.
Nobody knows what business needs more than business itself. Often in the public sector we are playing catch up; reacting to events after the worst effects of statute or policy have gone into effect to our collective detriment. This needs to change, as it amounts to closing the stable after the horse has bolted. So, let me propose to you a permanent Legislative Working Group on Investment, Business and Regulation. This working group will be composed of legislators and business leaders supported by professional policy staff in the House of Representatives. The working group will provide a platform for ongoing interaction between the legislature and the private sector, a forum where we can look ahead at the challenges on the horizon, be made aware of potential policy failures before they become intractable challenges and an arena where we can jointly develop new ideas and implement effective solutions.
Recent reforms to the contracting process of the Federal Government have been implemented to make the processes more transparent, and ensure that only qualified companies bid for and are awarded contracts by the government. These reforms became necessary to curb the proliferation of briefcase companies abandoning contracts they should never have received in the first place. A consequence of these well-intentioned reforms is that a significant number of qualified small and medium scale companies have now been locked out of the federal government procurement process. We will level the playing field between these SMEs and the larger companies as it is to these SMEs that we often rely on to create jobs and economic opportunity for our citizens. We will consider a number of options including a mandate that a minimum percentage of government contracts, determined either as a portion of total contract values or absolute numbers should be awarded to small and medium-sized businesses.
When you grow and encourage SME’s, you grow the economy, When you grow the economy, you create employment. This is a no brainer.
I am sure if asked, many would readily identify the issue of security or more appropriately described, insecurity as the single most important challenge we face in our country. However I dare say, if you turn around our economic situation, that alone will have a transformational effect in curbing the insurgencies and bring about some measure of peace in the country.
Insecurity manifested through a concerning rate of banditry and insurgency has made entire swathes of our country inhabitable to profitable commercial enterprise. We know that capital is cowardly and capital is not going to go anyplace that is unfriendly. We also know that so long as investment and innovation are concentrated in a selected number of states or regions we cannot achieve our goals of sustained national economic growth, innovation, investment and rapid reduction in unemployment. Communities are the most valuable crime fighting group available to the policing agencies. They are the real experts on crime, not the police because they know who the criminals are. Our communities are not hostile territories to be subdued by policing efforts, they are partners in the crime fighting process. The legislature will encourage efforts to establish a new community policing paradigm within the federal police structure so that policemen and women police the places they know and the communities where they are not strangers or considered an occupying force, but partners in peace and prosperity. This is in addition to our increased allocations for training, salaries and wages and enhanced security equipment and logistics for the Nigeria Police, the Armed Forces and other security agencies of the Federal Government.
Ladies and gentlemen, we have not begun, in government or in the private sector, to thoroughly consider how the emerging crisis of climate change will affect the ways we do business in our country. Credible scientific evidence suggests that climate change is one of the gravest threats we face, and that urgent action at home and abroad is required to prevent the worst possible impacts on our national security, public health and socio-economic potential. There are understandable concerns that any attempts by government to engage fully with the emerging dangers of climate change will only result in imposing new obligations on the private sector, that will ultimately increase the costs of doing business and make our enterprises even less competitive than they already are. These concerns are valid, but they are not a sufficient argument for doing nothing, especially when we consider that doing nothing leaves us at the mercy of global policy directions that all too often are crafted without consideration for our concerns, our imperatives and peculiar circumstances. In this 9th assembly, we will seek to use the legislative policy process to articulate a new set of ideas and actions to help us build resilience against the dire consequences of a rapidly changing earth. However, rather than pursue a programme of government diktats imposed without consideration for the concerns of business, we will work through a process that allows the organised private sector to be equal partners in seeking the solutions we need.
Ladies and gentlemen, I believe, and history has shown that business and not government will always be the primary generator of jobs with incomes that lift people out of poverty into the middle class and keep them there. Yet, government in Nigeria has for too long been in the business of picking economic winners and losers. This overinvolvement has contributed greatly to public cynicism about government and has made it ever more so difficult to achieve public unity on critical issues of nation building. In this 9th Assembly, we will begin the process of dismantling an overbearing regulatory system that encourages unnecessary government interference in all areas of the economy, discourages investments, hinders innovation and stifles growth. We will make the organised private sector a more equal partner in the policy process and put an end to generations of top down regulation. We will with confidence and vision, exercise the convening power of government to bring people together to jointly consider and implement solutions to our most pressing concerns of infrastructure, healthcare, security, climate change and unemployment. Broken promises taint all politics, so we have made it our guiding rule in this 9th assembly not to promise what we cannot deliver and to deliver what we promise
A just society cannot and should not seek to guarantee equal outcomes for its citizens. Our responsibility is to ensure that all our citizens are afforded an equal opportunity to succeed or fail on their own. Our job is to protect those who need us to shield them, to empower through opportunity, to decide what future we want for all our nation’s children and to build it, in the full knowledge that society is a continuum, and the decisions we take today will have consequences for us, for our children and for generations yet unborn.
None of what we have set out to achieve will be achieved without the support of the private sector, with the cooperation of many of you present here. The partnership I envision and have sought to articulate here today requires that we deal with each other honestly, that we set aside vested interests and embrace the fact that we are all members of one universal community and we need to work together to help our community survive and thrive in the new global economy.
Let me once more extend my appreciation to the organisers of the conference for the opportunity to speak here today. I congratulate you all on this occasion of your 13th Annual Business Law Conference and I wish you a successful conference.
Thank you and God bless.
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Trump says King Salman ‘agree’ to crash oil prices

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Trump in a tweet said he had spoken to King Salman of Saudi Arabia who had agreed to increase production.

The president had again blamed OPEC for high global oil prices on June 13.

“Just spoke to King Salman of Saudi Arabia and explained to him that, because of the turmoil & dysfunction in Iran and Venezuela I am asking that Saudi Arabia increase oil production, maybe up to 2,000,000 barrels, to make up the difference…Prices too high! He has agreed! Trump tweeted.

Global oil prices, which ranged from between 40 dollars to 50 dollars a barrel in 2016, increased to about 50 to 60 dollars in 2017 and continued upward to 80 dollars in 2018.

The Russian-Saudi-led deal for Russia and OPEC to cut production in 2017, which was extended to 2018, was seen as one of the main cause of the price spike.

However, the U.S. Energy Information Administration estimated that OPEC crude production only decreased from 32.7 million barrels per day in 2016 to 32.5 million in 2017, a drop of less than one percent.

However, since U.S. production in 2017 alone increased almost twice as much as this OPEC cut, the Russian-OPEC deal is seen as not the only important cause.

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