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Why Nigeria Did Not Sign The OECD Minimum Corporate Tax Agreement – FIRS

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Why Nigeria Did Not Sign The OECD Minimum Corporate Tax Agreement - FIRS

“Nigeria has been involved in various work-streams under the OECD project”

Olushola Okunlade Writes

The Federal Inland Revenue Service (FIRS) has explained why Nigeria did not sign the Organisation for Economic Cooperation and Development (OECD) G20 Inclusive Framework two-pillar solution to tax challenges of the digitalized economy.

The OECD G20 Inclusive Framework two-pillar solution proposes a framework of rules aimed at tackling base erosion and profit shifting and providing for the taxation of Multinational Enterprises (MNEs). Four member countries of the Inclusive Framework (Nigeria inclusive), out of 140, have not agreed to the Two-Pillar solution.

Nigeria’s reasons for not agreeing to the Two-Pillar solution was explained in a webinar session hosted by the FIRS last week.

Why Nigeria Did Not Sign The OECD Minimum Corporate Tax Agreement - FIRS
Mr. Muhammad Mamman Nami, Executive Chairman of the FIRS.

The Executive Chairman of the FIRS, represented by the Group Lead, Executive Chairman’s Group, Mr M. L. Abubakar, noted that taxation of the digital economy has become a topical issue that many economies and developmental blocs are working to solve, including the OECD and the United Nations Tax Committee who have commissioned projects to produce a common front for countries to adopt.

“Nigeria has been involved in various work-streams under the OECD project and had articulated its position on the technical work towards the goal of producing a common front for countries. However, our concerns on potential negative revenue returns that the rule designs would have for developing countries were unaddressed, Nigeria abstained from committing to the rules at this time.” He stated.

He explained that the webinar was therefore to educate the general public on the modalities and impact of the statement released by the OECD Inclusive Framework on the 8th of October 2021 and to provide a broad picture on why Nigeria abstained from signing.  

The webinar which was a special edition of the FIRS Taxpayer Engagement Series was hosted by Mr. Olufemi Olarinde, Technical Assistant (Tax Policy) to the Executive Chairman FIRS, while technical papers were delivered by Mr. Mathew Gbonjubola, Mr Temitayo Orebajo, Mr Kehinde Kajesomo, Mr, Emmanuel Eze and Ms. Aisha Isa, all staff of the FIRS.

Explaining in detail, Mr. Mathew Gbonjubola, the Group Lead Special Tax Operations Group, and Nigeria’s representative at the OECD Inclusive Framework highlighted that despite the expected outcome that both Pillars will increase Global Corporate Income Tax by as much as $150 Billion per annum, with an attendant favourable environment for investment and economic growth, there were serious concerns that the pillars did not address negative revenue outcome for Nigeria and other developing countries.

“The general issue that developing countries have with the outcome that was published on October 8th is the high cost of implementation. And that speaks to the complexities of the proposal in the inclusive framework statement. In every complex situation or rule, implementation and compliance will always be difficult. When implementation or compliance is difficult, there would be the high cost of implementation.

“Another issue was that the economic impact assessment that was carried out on Pillar 1 and 2 were founded on an unreliable premise. The country-specific impact assessment that was done was top-down. Somebody just looked at the GDP of Nigeria and says Nigeria’s GDP is this much and then they should be able to buy this number of shoes and things like that. And you and I know, in that kind of postulation, the margin of error is usually very wide. That exactly was what happened with this. Particularly for Nigeria, when we ran the numbers it was way off the figures that the OECD gave us.

“And the final issue most developing countries had was that the developed world, within the inclusive framework, was very indifferent to the concerns expressed by most developing countries. This you can see from the outcome, with respect to the complexity, issues of the high cost of implementation and on the issue of revenue accruable to developing countries. When you look at the bulk of the money that would accrue from the project, if any, 70% – 80% will go to the developed countries. Almost nothing comes to the developing countries.” He explained.

On the specific concerns raised by Nigeria, Mr. Gbonjubola, who led Nigeria’s team on the Inclusive Framework negotiations, explained that while the whole project started out to find solutions to the challenges of a digitalised economy the outcome was completely different.

He went further to note that the statement by the OECD Inclusive Framework required all parties to remove all Digital Service Taxes and other relevant similar measures with respect to companies taxation and to commit not to introduce such measures in the future.

“The statement required the withdrawal of unilateral measures by countries. Which Nigeria does not have a problem with (Nigeria does not have any unilateral measure targeted at digital services companies). However, the paper that was released on unilateral measures was so expansive in its definition that we are concerned that the taxing rights that Nigeria has always enjoyed may be withdrawn.”

He further explained that Nigeria is unable to implement the mandatory binding resolution on arbitration because of constitutional limitations as to tax dispute resolution.

He also stated that for Nigeria, “Pillar 2 is not a deal-breaker because Nigeria could work with Pillar 2. “We have a few issues with Pillar 2 but we could live with them but because Pillar 1 and 2 are a single package, since we are rejecting Pillar 1, we can’t take on Pillar 2”.

“Under the inclusive framework rule you either accept both Pillars or you reject both Pillars. You cannot pick one to the exclusion of the other. And since Nigeria is not able to join one of the pillars, it means we are out of both Pillars.”

Mr. Gbonjubola also stated that Nigeria does not see any additional revenue coming to by way of Pillar 2, though he added that it could act as a behaviour modifier for policy makers to take another look at the various tax incentives and tax waivers we have in our tax laws and begin to restructure them in other to ensure that we are not deliberately throwing away revenue.

“Nigeria could not sign up to the statement of the inclusive framework because it did not address the concerns that we had expressed as a country and it also did not take cognisance of issues around developing countries, which will make those outcomes not to provide additional revenue, and if any, very little, and at very significant cost.”

He further stated that Nigeria, which had participated in all the meetings of the working groups would continue to participate in the design of all technical notes and model rules, and would agree to the Pillars if its expressed concerns are addressed.

“And finally, just like the Honourable Minister of Finance said a couple of months ago, Nigeria would continue to participate in the inclusive framework activities particularly the design of all the technical notes and the model rules, and then, if and only if, the concerns we have expressed are addressed, then Nigeria still has the chance to join up and to sign up. But if not, we will leave that to our policymakers to decide going forward”

The Webinar had in attendance Prof. Abiola Sani, a professor of Commercial Law in Nigeria as well as other eminent tax practitioners and representatives of government and private institutions. The representatives of the Kenya and Zambia revenue authorities were also in attendance.

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Dangote-Led Flood Committee Commences Distribution Of N1.5bn Relief Items To Victims Nationwide 

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Dangote-Led Flood Committee Commences Distribution Of N1.5bn Relief Items To Victims Nationwide

Olushola Okunlade Writes

The Dangote-led Presidential Committee on Flood Relief and Rehabilitation (PCFRR), known as Dangote Flood Committee has commenced the distribution of relief materials, worth N1.5 billion to victims of flooding nationwide.  

The PCFRR, which was established by the Federal Government following the 2012 flooding, is co-chaired by Africa’s foremost industrialist Aliko Dangote, and Dr. Olisa Agbakoba.  

The flagging off ceremony for the relief materials distribution for this year started in Borno State and was conducted by the State Governor, Professor Babagana Umara Zulum Tuesday in Maiduguri, Borno State capital. The Governor thanked the Dangote Flood Committee and promised that he will ensure that the items get to the victims.

Dangote-Led Flood Committee Commences Distribution Of N1.5bn Relief Items To Victims Nationwide
Left-Right: Assistant Secretary (PCFRR) Umar Musa Gulani, Who Represent the Chairman Presidential Committee On Flood Relief Rehabilitation (PCFRR) Aliko Dangote, Borno State Governor, Prof. Babagana Umar Zulum, Director General (NEMA) Ahmed Mustapha Habib, Representative of King Salman Humanitarian Aid and Relief Center, Al-Yousuf Abdulkarim, during the visit to the Governor office before the Flag Off ceremony for Distribution of Presidential Committee on Flood Relief Rehabilitation donated relief materials to Flood Victims in Borno State on Tuesday 6th December 2022 at NEMA Zonal Office, Maiduguri, Borno State.
Dangote-Led Flood Committee Commences Distribution Of N1.5bn Relief Items To Victims Nationwide
Left-Right: Assistant Secretary (PCFRR) Umar Musa Gulani, Who Represent the Chairman Presidential Committee On Flood Relief Rehabilitation (PCFRR) Aliko Dangote, Borno State Governor, Prof. Babagana Umar Zulum, Director General (NEMA) during the visit to the Governor office before the Flag Off ceremony for Distribution of Presidential Committee on Flood Relief Rehabilitation donated relief materials to Flood Victims in Borno State on Tuesday 6th December 2022 at NEMA Zonal Office, Maiduguri, Borno State

UNICEF revealed that the 2022 flood killed 600 people, displaced 1.3 million, and destroyed more than 82,000 homes in Nigeria, therefore making it the worst in decades.   

The Representative of the Dangote-led Presidential Committee on Flood Relief and Rehabilitation (PCFRR), Alhaji Umar Musa Gulani assured at the flagging off for the Northeast zone that the exercise would also be conducted in the other five geopolitical zones of the country.

Gulani said the items from the Committee have been officially handed over to the Borno State Government and the National Emergency Management Agency (NEMA). He said the exercise would be conducted across the six geo-political zones, beginning from the northeastern State of Borno.   

The breakdown of items donated includes 86 bags of rice, 34 bags of beans, 34 bags of maize, 34 bags of millet, 34 bags of Guinea Corn, 34 bags of Garri, 86 cartons of noodles, 86 cartons of spaghetti, 86 cartons of macaroni and 86 bags of sugar, and 857 bags of cement, among several food and non-food items.   

Gulani said over N10 billion has been expended by the committee to mitigate the effect of flooding since inception in 2012, adding that no fewer than 84 Hostels have been built for flood victims in 24 states of Nigeria. According to him: “This private sector-led project is highly commendable and it has been sustained in the past ten years. It is a selfless service from the private sector and Nigerians should appreciate their selfless service to humanity”

Director General of NEMA Alhaji Mustapha Habib Ahmed described the Committee’s intervention as a milestone for Nigeria in general, and flood victims in particular. “Responding to the humanitarian outcomes of this nature requires concerted effort,” the DG said and added that the donation by the Dangote Flood Committee would eventually be made available to flood victims across the affected states in Nigeria.   

Dangote-Led Flood Committee Commences Distribution Of N1.5bn Relief Items To Victims Nationwide
Left-Right: Borno State Governor, Prof. Babagana Umar Zulum, Director General (NEMA) Ahmed Mustapha Habib, Assistant Secretary (PCFRR) Umar Musa Gulani, Who Represent the of Chairman Presidential Committee On Flood Relief Rehabilitation (PCFRR) Aliko Dangote, at Flag Off ceremony for Distribution of Presidential Committee on Flood Relief Rehabilitation donated relief materials to Flood Victims in Borno State on Tuesday 6th December 2022 at NEMA Zonal Office, Maiduguri, Borno State
Dangote-Led Flood Committee Commences Distribution Of N1.5bn Relief Items To Victims Nationwide
Left-Right: Assistant Secretary (PCFRR) Umar Musa Gulani, Who Represent the Chairman Presidential Committee On Flood Relief Rehabilitation (PCFRR) Aliko Dangote, Director General (NEMA) Ahmed Mustapha Habib, Borno State Governor, Prof. Babagana Umar Zulum, at Flag Off ceremony for Distribution of Presidential Committee on Flood Relief Rehabilitation donated relief materials to Flood Victims in Borno State on Tuesday 6th December 2022 at NEMA Zonal Office, Maiduguri, Borno State.
Dangote-Led Flood Committee Commences Distribution Of N1.5bn Relief Items To Victims Nationwide
Left-Right: Assistant Secretary (PCFRR) Umar Musa Gulani, Who Represent the Chairman Presidential Committee On Flood Relief Rehabilitation (PCFRR) Aliko Dangote, Director General (NEMA) Ahmed Mustapha Habib, Borno State Governor, Prof. Babagana Umar Zulum, at Flag Off ceremony for Distribution of Presidential Committee on Flood Relief Rehabilitation donated relief materials to Flood Victims in Borno State on Tuesday 6th December 2022 at NEMA Zonal Office, Maiduguri, Borno State

Speaking on behalf of the victims, Khalifa El-Miskin said the victims were extremely appreciative of the gesture. 

It would be recalled that the Committee also recently, during the spread of the COVID-19 pandemic, donated N1.5 billion to fight the virus. Announcing the donation, Dangote said it was imperative for well-meaning Nigerians to help the Federal Government in fighting the virus.

The Committee also recently provided N250 million as relief assistance to victims of the devastating floods in Benue State. Aside from the donation in Benue, the Dangote-led committee also revealed that it had also donated the sum of N150 million (in kind) to provide relief assistance to flood victims in Anambra State.

It also released the sum of N118 million to NEMA to augment the N1.6 billion released by the Federal Government for procurement of food and non-food relief materials in aid of the flood victims in the following 16 states: Abia, Akwa-Ibom, Bayelsa, Ebonyi, Edo, Ekiti, Enugu, Abuja FCT, Kebbi, Kwara, Lagos, Niger, Ondo, Oyo, Plateau, and Sokoto.

It would be recalled that the Committee at its inauguration by former President Goodluck Jonathan raised a whopping N11.35 billion for flood victims. Top on the list of donors at the event was Dangote and the Federal Government, who donated N2.5 billion each.

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Nigerian Breweries Holds Extra-Ordinary General Meeting, Recommends 2.1 Billion Bonus Shares To Shareholders

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we look forward to the dividends that this initiative will bring to the various areas where the beneficiaries live

Olushola Okunlade Writes

Nigerian Breweries Plc, the foremost brewing company in Nigeria is set to hold an Extraordinary General Meeting (EGM) on Thursday, December 8, 2022, at the Grand Ball Room, Oriental Hotel, Victoria Island, Lagos State.

At the meeting, the Board of Directors of the Company is proposing a bonus issue of one (1) new share for every four (4) shares held by qualifying Shareholders, that is those on the Register of Members at the close of business on Tuesday, 6th December 2022.

The Board’s proposed bonus share scheme is expected to be implemented upon the receipt of the Shareholder’s approval at the EGM. In view of the Company’s huge Share Premium Account, the Board decided to reward the company’s shareholders with the bonus share scheme as the best option to close the gap between the issued and unissued shares as required by the Corporate Affairs Commission.

Other items proposed by the Board for Shareholders’ approval at the EGM include an increase in the Company’s share capital to accommodate the bonus shares, a change in that regard in the share capital clause in the Memorandum of Association, and updates to some provisions in the Articles of Association to align with the 2020 Companies and Allied Matters Act.

In furtherance of the Company’s commitment to continue to deliver value to its Shareholders, an interim dividend of 40 kobo per ordinary share of 50 kobo each was paid on 1st December 2022 to Shareholders whose names appeared in the Register of Members of the Company as at close of business on 23rd November 2022.

Speaking on the bonus issue proposal and the interim dividend payment, the Company Secretary/Legal Director, Uaboi Agbebaku explained that both actions clearly demonstrate the commitment of the Board to continue to reward Shareholders for their investment in the Company.

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LASAA Launches 2023 Mobile Advert Stickers For Branded Vehicles

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LASAA Launches 2023 Mobile Advert Stickers For Branded Vehicles

…promises improved and efficient process

By Moninuola Sulaiman

Lagos State Signage and Advertisement Agency (LASAA), the agency saddled with the mandate to regulate advertisement displays in Lagos State, has announced the release of its 2023 mobile advert stickers for branded vehicles in the state.

Managing Director of LASAA, Prince Adedamola Docemo, in a statement in Ikeja yesterday, stated that the new and improved mobile advert e-sticker will be in force effective from the 1st of January 2023, a development that will render the 2022 sticker invalid.

He reiterated that, just like last year, the agency has fully deviated from the yearly tradition of launching the stickers with pomp and would rather focus on improving the efficiency of the new process.

He explained that the new e-sticker, which was introduced last year, has attracted a lot of commendation from stakeholders. He said LASAA has continuously reviewed and improved the mobile advert e-sticker product throughout the year to assess the process and fix all barriers for better and more efficient performance.

LASAA Launches 2023 Mobile Advert Stickers For Branded Vehicles
Prince Adedamola Docemo, Managing Director, LASAA.

Prince Docemo disclosed that the 2023 e-sticker continues to experience constant upgrades with a Quick Response (QR) code scanner application, which is readable with a simple smartphone.

He said, “The e-sticker has been enhanced with internal control mechanism, which comes with specialised bar codes and embedded details, including vehicle particulars and serial numbers for authentication.”

He explained that the new e-sticker comes with new and improved security features such as anti-counterfeit properties and an authentication system against fraud.

Prince Docemo emphasised that the level of security implemented for ease of confirmation has improved the process of compliance for the agency’s clients. He stressed that all branded vehicles state-wide will be effectively captured on a mobile advert database, thereby making the agency’s ability to monitor compliance and enforcement work efficiently.

He noted that the incidence of fraud has been hugely minimised, adding that non-compliant vehicles will be impounded and grounded. He assured clients that upon registration, the e-stickers will be available to them within 48 hours.

According to him, LASAA continues to monitor the activities of unscrupulous persons parading themselves as staff of the Agency as well as those working to frustrate its efforts by selling mobile advert stickers belonging to other States. This act LASAA believes is an attempt to cause confusion and conflict within Lagos territory. He added that LASAA has already taken bold steps to reverse this anomaly.

He, however, assured us that LASAA is always a step ahead in ensuring that all vehicles branded with logos and adverts are properly registered in Lagos State. He warned that the agency would arrest those who fail to comply.

He also warned clients and customers who are in the habit of patronising touts to desist from the such act because LASAA’s operation is fully automated and any forged registration will be easily detected.

He urged all registered clients to install the LASAA verifier app on their smart devices to verify the status of registration of their branded vehicles. The LASAA e-sticker Verification App is a reliable platform that allows LASAA field officers or law enforcement agencies to verify the authenticity of brand publications on automobiles in the state.

With the verifier app, all information regarding the organisation or individual name, plate number (where applicable), brand type, vehicle type, and branding type will be displayed seamlessly to verify the authenticity of the sticker.

The platform has been developed to ensure that branded automobiles have authorised stickers and to eradicate any occurrence of falsified brand information.

Prince Docemo expressed appreciation to Governor Babajide Sanwo-Olu for his immense support towards the agency’s initiatives while also stressing that clients’ satisfaction is at the heart of the agency’s business.

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