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Economy

Senate to invite Finance Minister, FIRS Chairman

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…As NECA cautions FG, and Experts fault FEC’s VAT increment to 7.2%***

The Senate Committee on Finance indicated Thursday, a decision to invite the Minister of Finance and the Chairman, Federal Inland Revenue Service,  (FIRS) to give reasons for the proposed increase in Value Added Tax (VAT).

It coincides with Nigeria Employers’ Consultative Association (NECA) warning on Thursday, faulting the timing of the announced increment of VAT, by Federal Government from five per cent to 7.2 per cent.

The Chairman of the Committee, Sen. Solomon Adeola highlighted the intent to invite FIRS, in a statement issued by his Media Adviser, Mr Kayode Odunaro, in Abuja, on Thursday.

Adeola said the invitation was hinged on the proposed plan to increase VAT from 5 per cent to 7.2 per cent.

The Minister of Finance, Mrs. Zainab Ahmed had after the Federal Executive Council (FEC) meeting on Wednesday spoken on the proposed plan to increase VAT.

Adeola, said the proposed increase in VAT had generated mixed reactions among the public on its possible effects on living standards and the economy.

“We are glad that the minister of finance indicated that the VAT act will have to be amended for the increase to take effect.

“But we are concerned about the current economic situation of the country as it affects the generality of the people.”

The chairman said the interaction with the two key officials of Federal Government would form part of the basis for possible amendments of the VAT Act.

Meanwhile, the Nigeria Employers’ Consultative Association (NECA) on Thursday in Lagos, faulted the timing of the announced increment of Value Added Tax (VAT) by Federal Government from five per cent to 7.2 per cent.

Mr Timothy Olawale, NECA’s Director General, made this known in Lagos on Thursday.

Olawale said that the benefits of the recently signed National Minimum Wage of N30,000 would be neutralised by the proposed increase in the VAT.

The Federal Executive Council on September 11 approved 7.2 per cent as new VAT rate for the country, up from the current five per cent.

The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, who spoke with State House Correspondents after the FEC meeting in Abuja, said consultations were in process over when the new rate would apply.

Also read: FIRS rakes in N97.7bn from going after tax defaulters’ bank accounts

Olawale said the increment would further reduce the purchasing power of the citizens, lead to increase in prices of goods and services, increase inflation rate, and further contraction of the economy.

According to him, recently released data of the country’s GDP growth indicated a contraction in Q4, 2018 (2.38 per cent), Q1, 2019 (2.10 per cent) and Q2, 2019 (1.94 per cent).

“Also, International Monetary Fund has recently revised downward its global economic growth forecast to 3.2% due to sluggish in global economy.

“Therefore, this suggests, that at such period of time, economies should be formulating fiscal measures/policies to stimulate their economies,” Olawale said in a statement.

Olawale said that, since the purchasing power of the citizens would have been reduced, sales of goods and services would reduce and inventories for business would be high.

“This can lead to closure of businesses that ought to be supported by government in reducing unemployment rate that is currently alarming,” he said, urging the government to double its efforts at expanding the tax net, reduce the income gap and improve the economy through more friendly fiscal policies and promote the ease of doing business in Nigeria.

“The government should bring up machinery in order to further increase the tax bracket, widen the tax net as the country is presently achieving less than 10 per cent of its VAT potentials,” Olawale said.

Meanwhile, a financial expert and Managing Director of Cyber1 Systems Network International, Mr. Momoh Aliyu, has faulted the increment in Value Added Tax (VAT), saying it will negatively affect the cost of living in the country.

Aliyu said this in Abuja on Thursday, while reacting to the increment of VAT from five per cent to 7.2 per cent by the Federal Government.

VAT is a consumption tax placed on a product; and whenever value is added at each stage of the supply chain, from production to the point of sale, it could negatively affect the users who were made to pay more for such products.
Aliyu noted that such increase could also cause a drastic reduction in consumption, thus reducing investments and business expansions.

According to him, VAT is usually shared among three tiers of government, and if the federal government is increasing it to pay salary, then, that would be unfortunate and inimical to economic growth.

“Vat in general perspective in Nigeria is shared with four per cent net to FIRS, 50 per cent to states, 35 per cent to Local Governments and 15 per cent to the Federal Government.

“With this development, only few states like Lagos, Kano, Rivers and FCT will have the impact positively, as they will have huge chunk of the money because they contribute 85 per cent of the VAT revenue in the country.

“The question now becomes, what is the fate of the economic impact of other 32 states in Nigeria which, by virtue of increment of VAT, will be affected.

“The solution to tax and VAT in Nigeria is tax netting. All the country needed to do is to create a better administrative know how that will increase tax netting.

“We currently have serious problem with compliance at five per cent; what do you think will happen to an increment?” he queried.

Another financial expert, Mr Akinsanya Niyi, also faulted the increment, adding that its timing is wrong.

Niyi said the time for the increment was wrong, owing to the economic situation and the high rate of unemployment in the country.

“An increase in VAT means a reduction in specific goods, which may lead to an increase in consumption of food items that are exempted. Increase in VAT has significant influence on consumer’s lifestyle.

“Increase in VAT reduces the purchasing power of consumers, especially when the incomes remain the same.
“This may lead to a shift in goods consumed to a lesser quality,” Niyi said.

 

Economy

N672Bn: Sell-offs in Dangote Cement, MTN, Others Push Equity Down By 1.23%

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Stock Market Gains N18bn; FTN Cocoa Processors, Prestige Assurance lead Losers’ Chart 

…Dangote Cement, Conoil lead losers table

Selloffs in the shares of Dangote Cement, Conoil, and MTN Nigeria, among others, on Friday, dragged the equity market’s performance indices down by 1.23 percent to close the week’s trading sessions.

Specifically, investors lost N672 billion or 1.24 percent, as the market capitalisation, which opened at N54.707 trillion, closed at N54.035 trillion.

The All-Share Index also lost 1.24 percent or 1.228.32 points, to settle at 98,751.98, as against 99,980.3 recorded on Thursday.

Consequently, the Year-To-Date (YTD) return on the index dropped to 32.07 percent.

Selloffs in Dangote Cement, MTN Nigeria,  Fidelity Bank, Sovereign Trust Insurance, and Nestle made the market performance negative terrain.

Analysis of the market activities showed trade turnover drop when compared to the previous session, with the value of transactions down 22.01 percent.

A total of 367.62 million shares valued at N6.78 billion were exchanged in 9,168 deals, compared to 542.95 million shares valued at N8.70 billion exchanged in 9,650 deals posted previously

Meanwhile, Dangote Cement and Conoil led the losers’ table by percentage terms of 10 each to close at N135, and N90.90 per share respectively.

MTN trailed by 9.96 percent to close at N200.70, Thomas Wyatt Nigeria lost 9.78 percent to close at N2.03, while Sovereign Trust Insurance shed 6.52 percent to close at 43k per share.

On the gainers’ table, The Initiative Plc and FTN Cocoa Processors led by 10 percent each to close at N1.98 and N1.65 per share respectively.

Juli Plc followed closely by 9.97 percent to close at N3.75, Champion Breweries Plc gained 9.94 percent to close at N3.76 and PZ Nigeria rose by 9.93 percent to close at N33.75 per share.

On the activity table, Transcorp led in volume with trade of 57.00 million shares valued at N792.05 million, while Access Corporation sold 31.77 million shares worth N667.8 million.

United Bank of Africa (UBA) traded 28.50 million shares valued at N674.07 million and Fidelity Bank transacted 28.07 million shares worth N297.65.

Also, First City Monumental Bank(FCMB) sold 27.92 million shares worth N227.22 million.

However, market breadth closed positive with 43 gainers and eight losers on the trading floor

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Economy

Equity Market Recovers, Investors Gain N390bn

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Stock Market Gains N18bn; FTN Cocoa Processors, Prestige Assurance lead Losers’ Chart 

…Sunu Assurances, CWG Plc lead the losers’ table

The Nigerian equity market on Thursday recovered from its three sessions losses, making investors to gain N390 billion.

Improved buy interest in the shares of Guaranty Trust Holding Company(GTCO), Zenith Bank, FBN Holdings, NEM Insurance, Juli Plc, among other top traders, pushed the market performances up.

Specifically, the market capitalization, which opened at N54.317 trillion, gained N390 billion or 0.72 percent and closed at N54.707 trillion.

The All-Share index also rose by 0.72 percent or 714 points to close at 99,980.3 points, compared to 99,266.02 recorded on Wednesday.

Consequently, the Year-To-Date return rose to 33.71 percent.

Stock Market Gains N18bn; FTN Cocoa Processors, Prestige Assurance lead Losers’ Chart 

Analysis of the market activities indicated that trade turnover settled higher relative to the Wednesday 5 session, with the value of transactions increased by 49.27 percent.

The market breadth closed positive with 35 gainers and 19 laggards on the trading floor.

On the gainers table, GTCO, NEM Insurance, Juli and United Bank of Africa(UBA) led in percentage terms of 10 each to close at N36.60, N6.60, N3.41 and N22.55 per share, respectively.

ALSO READ: NAFDAC NATIONAL STRATEGIC ACTION PLAN: Partners With Pharmaceutical Supply Chain Stakeholders

Champion Breweries also gained 9.97 percent to close at N3.42 per share.

On the other hand, Sunu Assurances led the losers’ table by 10 percent to close at N1.17, followed by Eterna Plc by 9.81 percent to close at N14.25 per share.

CWG Plc trailed by 9.76 percent to close at N9.55, Morison Industries Plc shed 9.58 percent to close at N1.51 and Cadbury Nigeria lost 9.52 percent to close at N19 per share.

A total of 542.95 million shares valued at N8.70 billion were exchanged in 9,650 deals, compared to 396.23 million shares valued at N5.83 billion exchanged in 10,549 deals posted on Wednesday.

On the activity table, UBA led in volume and value with 93.71 million shares traded in deals worth N2.07 billion, Transcorp followed with 54.08 million shares traded in a value of N692.19 million.

Japaul Gold Group sold 34.33 million shares worth N65.77 million, Sterling Nigeria transacted 28.49 million shares valued at N129.15 million and Fidelity Bank sold 27.09 million shares worth N270.74.

Meanwhile, market breadth closed positive with 35 gainers and 19 laggards on the trading floor.

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Economy

NGX Opens Week Weakly, As Market Sheds N1.82trn

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Stock Market Gains N18bn; FTN Cocoa Processors, Prestige Assurance lead Losers’ Chart 

 …MTN and Dangote Cement lead the Losers’ Table 

Transactions resumed on the Nigerian Exchange Ltd. (NGX), on Monday, on a negative posture with the market indices declining by 3.15 percent due to selloffs.

Specifically, the market capitalisation which opened at N57.849 trillion, shed N1.82 trillion or 3.15 percent to close at N56.028 trillion.

Similarly, the All-Share Index(ASI) also dropped by 3.15 percent or 3,330 points to settle at 102,393.23, compared to 105,722.78 achieved on Friday.

As a result, the ASI Year-To-Date (YTD) return fell to 36.94 percent.

The market was dragged down due to selloffs in the shares of MTN Nigeria, Dangote Cement, and Zenith Bank.

On the losers’ table, MTN and Dangote Cement led in percentage of 10 each to close at N247.50 and N686.70 per share, respectively.

NGX Group trailed by 9.76 percent to close at N22.20, NEM insurance dropped 9.74 per cent to close at N6.95, while Tantalizers lost 9.52 percent to close at 38k per share.

On the contrary, Juli Plc led the gainers table by 9.52 percent to close at N1.61.

Dangote Cement followed with an increase of 8.64 percent to close at 88k per share.

Sunu Assurances garnered 6.74 percent to close at N1.90, while ABC Transport gained 6.67 percent to close at 96k per share.

Nigerian Aviation Handling Company Plc (NAHCO) also appreciated by 5.86 percent to close at N30.70 per share.

On the activity chart, Guaranty Trust Holding Company (GTCO) led with a trade of 28.85 million shares valued at N1.13 billion.

Also, Transcorp sold 20.14 million shares worth N275.93 million, while Access Holdings traded 15.90 million shares worth N359.5 million.

FBN Holdings sold 15.87 million shares worth N450.74 million and Zenith Bank transacted 15.84 million shares valued at N568.04 million.

Analysis of the market activities showed trade turnover settled lower relative to the previous session, with the value of transactions down by 7.58 percent.

Meanwhile,  273.85 million shares valued at N7.44 billion were exchanged in 9,688 deals, compared to 342.52 million shares worth N8.05 billion in 8,395 deals on Friday.

Meanwhile, the market breadth closed negative with 36 declining stocks and 16 that appreciated.

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