FG Deploys Tax Credits for Private Firms to Boost Infrastructure

The federal government is using a system of tax credits to
encourage private companies to share the cost of infrastructure
projects as part of a drive to diversify the economy away from its
reliance on oil sales, the Executive Chairman of the Federal Inland
Revenue Service (FIRS), Mr. Babatunde Fowler, has said.

Fowler told Reuters in an interview wednesday that more than 10
local companies had applied for the scheme to receive 50 per cent
of expenditure in tax credits.

He also said Nigeria had a target to nearly double tax revenues
this year from 2018 due to a surge of new payers following the end
of an amnesty and the introduction of a new database that uses
biometric data.

Fowler said two companies had successfully applied to receive
tax credits for infrastructure projects so far.

According to him, one was a member of the Dangote Group, which
will build a road under the scheme.

He did not name the other company.

“It may reduce the amount of my collections initially, but … as
I expand my tax net, I would make up for that reduction,” said
Fowler. “We believe we would generate more revenues from the
additional infrastructure that would be created.”

The tax credit scheme was signed into law, under an executive
order, by President Muhammadu Buhari in January.

Fowler said N5.32 trillion naira ($17.39 billion) was collected
in taxes in 2018 and his office was targeting N8.9 trillion this
year.

He said the increase was possible because the number of tax
payers was expected to jump to around 45 million this year from 20
million in 2018.

That was largely due to the inclusion of people identified in a
tax amnesty that ended this year.

Fowler said that change, coupled with a new database drawing on
biometric data tied to bank accounts, had led to an improvement in
compliance and collections in the first eight months of this
year.

But Fowler’s targets, which he described as “ambitious”, may be
hard to meet in a country of 190 million people where around 80% of
the workforce is employed in the informal sector. That has hindered
tax collection in the past.

Fowler, speaking at his office in the capital, Abuja, said a
move to include value added tax (VAT) on all online transactions
was expected to come into force in January 2020. He said e-commerce
was, at present, a tax loophole.

“There are a lot of areas that are not yet captured,” he
said.

Fowler added the current VAT rate of five per cent, one of the
lowest in the world, should be raised.

“I believe that Nigeria should review the VAT rate to 7.5 per
cent,” he said, though any such change would have to be implemented
by the government.

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Air Peace to Evacuate Nigerians from South
Africa

The Ministry of Foreign Affairs wishes to inform the general
public that following the recent unfortunate xenophobic attacks on
foreign nationals, including Nigerians in South Africa, the
Proprietor of Air Peace Airlines Chief Allen Onyema, has
volunteered to send an aircraft from Friday 6th September 2019 to
evacuate Nigerians who wish to return to Nigeria free of
charge.

The general public is hereby advised to inform their relatives
in South Africa to take advantage of this laudable gesture.
Interested Nigerians are therefore advised to liaise with the High
Commission of Nigeria in Pretoria and the Consulate General of
Nigeria in Johannesburg for further necessary arrangement.

Signed

Ferdinand Nwonye
Spokesperson
Ministry of Foreign Affairs, Abuja
Wednesday, 4 September, 2019