13 Apr

The week ahead – When you come right down to it, life holds no surprises

President Muhammadu Buhari has approved the extension of the Voluntary Assets and Income Declaration Scheme (VAIDS) to 30 June 2018. The short extension after the original 31 March date is based on the appeals of professional bodies and individual taxpayers, Femi Adesina, the presidential spokesman said in a statement. Adesina added that no further extension of time will be approved after 30 June. The statement said the new date was given based on the conviction of the finance ministry that the overall objective to increase compliance will be attained, and additional revenue will accrue. With a target of raising at least $1 billion from undeclared liabilities, VAIDS applies to all tax-paying individuals, companies, executors and trusts, and covers all taxes collectable by federal and state tax authorities.

President Muhammadu Buhari confirmed on 9 April he will seek another term in elections next year, ending months of speculation about his future after bouts of ill health. The 75-year-old said he would seek his party’s presidential ticket to contest elections in February 2019 during a closed-door meeting of the APC national executive committee. He flew to the United Kingdom for talks with Prime Minister Theresa May a few hours later. The announcement by Buhari was widely expected although Nigerian stocks fell 1.01 percent on Monday to a three-month low. The bond market shrugged off the announcement with the 10-year benchmark debt unchanged at 13.64 percent from its previous session after one trade on Wednesday, traders said.

The Nigerian Army on 10 April said it is setting up a special standing court martial that will prosecute officers caught dabbling in politics, compromising military ethics or playing any role in the 2019 general election. Military personnel have in the past also been accused of aiding and abetting vote rigging in some state races won by both major political parties. Speaking at the Chief of Army Staff First Quarter Conference in Abuja, the Chief of Army Staff, Lt Gen Tukur Buratai warned his officers and men to steer clear of the 2019 elections. In his words, “I have directed for a special standing court martial to be set up in preparation for the coming 2019 elections. I must warn that any Nigerian Army personnel found hobnobbing with politicians or being partisan will be investigated and sent to the special standing court martial.”

President Donald Trump has removed Chad from the requirement of enhanced immigrant vetting because the country has demonstrated it no longer is a security threat to U.S. interests, the White House said in a press release. “Trump signed a proclamation today announcing that the Republic of Chad has improved its identity-management and information sharing practices sufficiently to meet the baseline security standard of the U.S. “Chad nationals will therefore again be able to receive visas for travel to the U. S.,” the White House said. Trump’s proclamation states that Chad shares information used in the U.S. screening and vetting programmes about known or suspected terrorists. “Chad also improved its handling of lost and stolen passports, which helps the United States and other partners prevent fraudulent use of the documents,” the proclamation said.

Suggestions

  • On the VAIDS extension, the FIRS says it has been able to raise ₦20 billion over the course of the nine-month period it has run, significantly less than its projected tax revenue of $1 billion. Clearly, the three-month extension will not meet this benchmark. We have talked about what needs to be done in the past, but it bears repeating – in order to achieve the set target of raising non-oil revenue’s share from 6 percent to 15 percent in 2020, the FIRS will need to do more to scale up its tax collection capabilities from the informal sector rather than what seems to be the easier to target high net worth formal sector participants. That is the work they must do.
  • President Buhari’s announcement, which essentially kicks off 2019 campaign season, has long been expected, especially his following his recent tour of Lagos state and some troubled spots in the country – something he had failed to do in almost three years in office. While Buhari will be banking on the North-West, the country’s largest voting block led by Kano, Kaduna and Katsina states, to deliver him another mandate, he will certainly be disturbed by the negative sentiment spreading across the Middle Belt and Southern Nigeria following an escalation of the Pastoral Conflict. There are many other issues which are a cause for concern as Buhari prepares for another round of campaigning. With this week’s stock market slide (though market is still up 6.72% for the year), it appears some foreign investors have begun to ready themselves for a stint on the sidelines until after the elections. Also of concern is the failure of the government to pass its 2018 budget due to disagreements with the legislature. This is important considering the economy’s fragile state. Finally, while the Presidency has insisted that Buhari’s UK trip is mainly for talks, almost all observers believe that the President has gone to attend to his health. If the past antecedents of this administration are anything to be reckoned with, Nigerians will not be further enlightened regarding the President’s health – a dark horse issue which is likely to be revived during campaign season.
  • The army has been accused at various times of meddling in some state elections, prominent among which was the Ekiti contest in 2014 won by the outspoken Ayodele Fayose. The announcement came barely a day after President Buhari declared his intention to seek re-election next year and must be considered within that light. The wording of sections of the statement suggest a possible motive. Away from the politics of the move, questions abound about the enforceability of this new directive, chief among which is determining what constitutes ‘dabbling in politics.’ In a country where the military, which is currently involved in ten active ‘internal security operations’ as well as other deployments that span a total of 33 states, traditionally provides security cover alongside the police during the actual vote, and remains cosy with state governors and politicians in a nod to its historical participation in governance, this directive, grounded in certain provisions of the Armed Forces Act may be the latest political chess move masked as a regulatory announcement.
  • According to a 2016 report by the Global Security website, there were five active rebel groups in Chad. Including Boko Haram and AQIM which move in and out of its territory, not much has changed in Chad since the initial ban. The removal of Chad from the list of countries whose nationals are restricted from entry into the US can thus be seen as a vindication of critics of that policy which saw it as ill-thought and hastily adopted, and is discriminatory on the grounds of race and religion for the large part. The policy, which has been challenged in numerous courts with only one victory going the way of the United States Government is unlikely to be sustainable in the long-term.