Oil dips to $84.75, as IMF cuts down outlook

Written by Maritime First

…Buhari moves against errant offshore assets owners, over tax evasion***

Brent crude prices, yesterday, slipped to $84.75 per barrel, following the decision by the International Monetary Fund (IMF) to lower its growth forecasts.

Benchmark Brent crude was down 25 cents at $84.75 a barrel by 0735 GMT after a 1.3 per cent gain on Tuesday. US light crude was 25 cents lower at $74.71

The International Monetary Fund downgraded its global economic growth forecasts for 2018 and 2019(two days ago) Tuesday, raising concerns that demand for oil products may slump as well.

However, markets were supported as Hurricane Michael moved towards Florida causing the shutdown o of nearly 40 per cent of US Gulf of Mexico crude production.

Trade tensions and rising import tariffs are taking a toll on international commerce, while emerging markets struggle with tighter financial conditions a ..

“Prices are peaking at the most opportunistic time given the waning global growth narrative,” said Stephen Innes, head of trading APAC at OANDA in Singapore.

In the United States, nearly 40 per cent of daily crude oil production was lost from offshore US Gulf of Mexico wells on Tuesday because of platform evacuations and shut-ins ahead of Hurricane Michael.

Michael has strengthened into an “extremely dangerous” Category 4 hurricane, according to the latest advisory from the US National Hurricane Center.

Oil producers evacuated personnel from 75 platforms as the storm made its way through the central Gulf on the way to landfall on Wednesday on the Florida Panhandle.

The country’s largest privately owned crude terminal, the Louisiana Offshore Oil Port, said late on Tuesday it halted operations at its marine terminal.

The facility is the only US port able to fully load and unload tankers with a capacity of 2 million barrels of oil.

Companies turned off daily production of about 670,800 barrels of oil and 726 million cubic feet of natural gas by midday on Tuesday, according to offshore regulator the Bureau of Safety and Environmental Enforcement.

In the meantime, President Muhammadu Buhari has stepped up the regulations on money laundering and tax evasion by signing Executive Order 008 entitled: ‘Voluntary Offshore Assets Regularisation Scheme’.

According to a statement on Wednesday by his Senior Special Assistant on Media and Publicity, Garba Shehu, the new Executive Order took effect from Monday when Buhari signed it.

Shehu explained that with the signing of the order, Nigerian taxpayers who held offshore assets and incomes were expected to, within 12 months, voluntarily declare those assets and pay taxes on them.

He said when they do this, they should expect to derive certain specified benefits.

The presidential aide quoted the order as stating, “Any taxpayer who truthfully and voluntarily complies with the conditions of the scheme pays a one-time levy of 35 per cent on the total offshore assets or pays all outstanding taxes, penalties and interest after forensic audit of their offshore assets and income shall obtain immunity from prosecution for tax offences and offences related to offshore assets, among others.

“Equally, failure of any defaulting taxpayer to take advantage of this scheme shall, at the expiration of the scheme, result in investigation and enforcement procedures concerning offshore assets anywhere in the world pursuant to information now readily available through automatic exchange of information between Nigeria and foreign countries.”

Shehu added that in accordance with the new order, the Federal Government, through the office of the Attorney-General of the Federation, would set up a VOARS in Switzerland for all categories of taxpayers, who had defaulted in the declaration of their offshore assets, payment of taxes due and collectibles, subject to the fulfilment of the terms and conditions as stipulated in the order, or any other subsequent complementary regulations that follow.

To avoid the abuse of the process, he said the Federal Government made clear that the “scheme is open to all persons, entities and their intermediaries holding offshore assets and are in default of their tax obligations in any way, including those who are not already under investigation by law enforcement agencies in Nigeria or any other country, and have not been charged with any crimes, including theft of public funds or obtaining offshore assets through corrupt practices.”

Shehu stated that in signing the order, Buhari noted that under the Nigerian law, every citizen had the duty to declare their income and assets and pay taxes on them, but regretted that this, in most instances, had not been the case.

“The sad reality is that efforts to recover these taxes from defaulters through litigation are often frustrated by the complications caused by the change in the character and nature of such assets, insufficient financial intelligence and long delays in courts, among several other reasons,” he quoted the President as further saying.

Shehu said Buhari was optimistic that the new scheme would help to facilitate the expedient regularisation of offshore assets connected to Nigeria and lead to “a new expanded tax base for the Federal Government, and also fund the Nigeria Infrastructure Fund in Switzerland.”

The Nation with additional report from Punch 

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Maritime First