28 Jun

Daily Watch – Lagos to appeal Otodo Gbame judgement, Tax amnesty commences July

  • Nigeria hopes to raise at least $1 billion from a scheme that will give tax evaders a chance to make payments retrospectively, the finance ministry said on Friday. In an evident move aimed at boosting its income from non-oil sources, the finance ministry said a scheme would be launched on June 29 to give evaders immunity from prosecution, penalty charges and interest if they “regularise their tax status” between July 1 and December 31, 2017. It said tax evaders who delayed participation until after December 31 would be liable for interest on overdue tax balances. International asset tracers and investigative specialists have been appointed to assist the government in tracking assets held by Nigerians, the ministry said in an emailed statement. “Anticipated funds to be raised are at least US$1 billion, which will reduce Nigeria’s borrowing needs, allow investment in vital infrastructure and spur development,” said the finance ministry statement. Economists have long criticised the low levels of tax in the country and in March the FG laid out plans to increase its overall tax to GDP ratio to 15 percent by 2020 from 6 percent now. The ministry said in May that it would increase the interest rate on unpaid taxes to discourage companies and individuals from paying late and racking up a larger debt.
  • OPEC has beat its own oil cut compliance record, which stood at 104 percent as at April 2017. According to the joint OPEC-Non-OPEC Ministerial Monitoring Committee (JMMC), for the month of May 2017, OPEC and participating Non-OPEC producing countries recorded the highest conformity ever with their voluntary adjustments in production, achieving a level of 106 percent. Nigerian crude oil production in May jumped to 1.73 million bpd, up by 80,000 bpd from April, its highest level since March 2016, according to the most recent S&P Global Platts OPEC survey. Since then, the Forcados’ resumption of production has boosted flows and production is expected to increase even further this summer, according to recent loading programmes. Exports of crude oil and condensate are set to jump to over two million bpd in August, making it the longest loading programme in 18 months, according to the Platts estimates. With crude and condensate output now near its full capacity of 2.2 million bpd, Nigeria, which is exempted from the current OPEC cuts, could be asked to join the deal if the recovery continues.
  • The Lagos state government has rejected a High Court ruling that it stop a programme of evictions on the city’s waterfront that has left more than 30,000 Nigerian fishermen and their families homeless. The government of Nigeria’s fast-growing megacity of 23 million in October announced its intention to demolish all waterfront communities, home to around 300,000 people, for public safety. Residents and rights groups say this was an excuse to help a local businessman get rid of a settlement that had existed for decades so he could build more skyscrapers, hotels and malls. Steve Ayorinde, the Lagos state commissioner for information said that the government would appeal last week’s court ruling that deemed demolitions of the waterfront Otodo Gbame settlements “unconstitutional”. “The Lagos state government will exercise its constitutional right to appeal a judgment that we do not agree with,” he said in a phone message to Reuters.
  • A Germany-based global solar developer, Soventix, and Gentec EPC have formed a joint venture called Soventix Hybrid to develop solar projects across Nigeria. The Founder, Gentec EPC, Deepak Khilnani, said, “We are very excited about this partnership with Soventix. Gentec is continually seeking to bring innovative and diversified energy offerings to the Nigerian market and we believe solar energy meets the customer requirements: reliable, affordable and emission-free power. According to the statement, Soventix Hybrid will initially focus on industrial rooftop solar applications that synchronise with the existing generators or grid power systems. The companies said the second phase of the joint venture would also aim to develop national solar parks that would feed clean energy into the Nigerian grid. The German solar company builds and operates PV solar systems around the globe, with operational solar plants and branches in 12 countries and four continents. USAID estimates that 95 million Nigerians, approximately 55 percent of the population, do not have access to electricity and those that are connected to the grid suffer from extensive power outages.
  • Conoil has reported a gross profit of ₦3.318 billion for the first quarter of 2017, representing a 67.66 percent earnings rise compared to ₦1.979 billion posted in the first quarter of 2016. The improved financial performance for the first quarter ended March 31, showed a revenue of ₦24.474 billion, which is an increase of 28 percent over the ₦19.042 billion recorded in the corresponding period of 2016. Its profit after tax stood at ₦174.458 million in 2017, compared with a loss of ₦944 million in 2016. Thus, it added that it was raising investors’ expectations for another bountiful harvest at the end of the year. The firm had last Wednesday announced a profit after tax of ₦2.837 billion and proposed a dividend of 310 kobo per share for the 2016 financial year. The company statement said in part, “Amid the challenging economic environment, our team proactively identified potential business risks and suggested quick fix solutions to optimally manage and minimise the risks, which helped in achieving efficiency in the way we do our business.”