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FG denies report of increasing VAT to 10% despite hardship in Nigeria

The Finance Minister and Coordinating Minister of the Economy, Wale Edun, has denied a report of a potential hike in the Value-Added Tax (VAT) rate from 7.5% to 10%.

In a statement released Monday, Edun clarified that the VAT rate is still firmly set at 7.5%, as outlined in Nigeria’s tax laws.

“The current VAT rate is 7.5% and this is what the government is charging on a spectrum of goods and services to which the tax is applicable. Therefore, neither the Federal Government nor any of its agencies will act contrary to what our laws stipulate,” Edun affirmed.

He elaborated on the need for a balanced tax system, emphasizing that Nigeria’s tax framework operates on three key components: tax policy, tax law, and tax administration.

“The tax system stands on a tripod, namely tax policy, tax laws, and tax administration. All the three must combine well to give us a sound system that gives vitality to the fiscal position of the government,” the minister explained.

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Edun addressed concerns from the public about policies that might seem burdensome, assuring that fiscal measures are designed to foster sustainable growth and reduce poverty, not the opposite.

“Our focus as a government is to use fiscal policy in a manner that promotes and enhances strong and sustainable economic growth, reduces poverty as well as makes businesses flourish,” Edun stated.

In response to media reports suggesting the government is imposing undue hardship on citizens, Edun refuted such claims.

Edun also pointed out recent government actions aimed at reducing the financial strain on Nigerians, particularly by eliminating import duties on key food items like rice, wheat, and beans.

“The imputation in some media reports on the issue of VAT and the opinion articles that have sprouted from them seem to wrongly convey the impression that the government is out to make life difficult for Nigerians. That is not correct. If anything, the Federal Government has, through its policies, demonstrated that it is committed to creating a congenial environment for businesses to thrive.

“In fact, it is on record that the Federal Government, as part of efforts to bring relief to Nigerians and businesses, recently ordered the stoppage of import duties, tariffs, and taxes on rice, wheat, beans, and other food items,” Edun noted.

Edun reiterated that the VAT rate remains at 7.5% and will continue to apply to all eligible goods and services.

“For emphasis, as of today, VAT remains 7.5% and that is what will be charged on all the goods and services that are VAT-able,” he concluded.

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Nigeria begins sales of Crude Oil in Naira

Nigeria has officially commenced the sale of crude oil and refined petroleum products in Naira.

This milestone, announced by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, marks a new chapter in the nation’s economic strategy.

Effective from October 1, 2024, the Federal Executive Council (FEC) directive to trade crude oil and petroleum products in Naira was implemented following a key meeting of the Implementation Committee.

The meeting included prominent stakeholders, such as the Minister of State for Petroleum (Oil), the Special Advisers to the President on Revenue and Energy, executives from the Nigerian National Petroleum Company (NNPC), and top representatives of the Dangote Group. The Group Chief Executive Officer (GCEO) of NNPC and its Chief Financial Officer (CFO) were also in attendance, underscoring the initiative’s national significance.

The strategic policy, championed by the Bola Ahmed Tinubu-led administration, is expected to reshape Nigeria’s economy.

By denominating oil sales in Naira, the country aims to bolster economic growth, enhance stability, and promote self-sufficiency.

The move is seen as a crucial step toward reducing dependency on foreign currencies, positioning Nigeria for long-term success amidst the ever-changing dynamics of global markets.

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Electricity Tariff hike: Nigeria’s discos collect N887bn as revenue

Revenue of electricity distribution companies in Nigeria increased to N887.86 billion in the first seven months of 2024 amid an electricity tariff hike.

This is according to the analysis of Nigerian Electricity Regulatory Commission data on Discos’ commercial performance for the seven months of 2024.

The data showed that out of N1.14 trillion electricity bill issued by Discos to customers, the companies recorded 79.7 percent collection efficiency which stood at N887.86bn in the period under review.

A breakdown of the bill collection by Discos from January to July 2024 includes N95bn, N97bn, N100.44bn, N142.92bn, N191.65bn, N150.86bn and N162.14bn which amounted to N887.86 billion.

Further analysis showed that during the corresponding period in 2023, the companies issued bills totaling N797.18 billion, while they managed to collect N604.15 billion.

This surge in revenue collection is not unconnected to the hike in electricity tariff in April from N66 per kilowatt-hour to N225.

Recall that amid the call for the electricity tariff hike reversal, it was reviewed downward to 206.68 per kilowatt-hour, but was reviewed upward to N209 per kilowatt-hour thereafter.

Though the electricity tariff hike was introduced for customers getting at least 20 hours of power supply, Nigerians have lamented the burden occasioned by the tariff.

The energy cost pain has been exacerbated as Discos migrate more consumers to Band A feeders.

The Minister of Power, Adebayo Adelabu, however, insisted that Nigeria’s electricity tariff is among the cheapest within African countries.

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FG unveils seven CNG conversion centres in Ekiti

The Presidential Compressed Natural Gas Initiative (P-CNGi) has unveiled seven centres where commercial transporters can convert their petrol to CNG-powered vehicles in Ekiti.

The Program Director of P-CNGi, Michael Oluwagbemi who spoke during the official unveiling of the centres and handing over of 15 CNG-powered buses to government in Ado-Ekiti, Ekiti State capital at the weekend, urged commercial transporters in the state to visit the centers to convert their vehicle free of charge.

He explained that the CNG initiative is cheaper, more convenient, and safer compared to petrol, noting that the administration of President Bola Tinubu is determined to energize the economy through the initiative which he said would create jobs and enhance sustainable development.

Oluwagbemi disclosed that the administration is targeting one million vehicle conversions to CNG by 2027, saying that no fewer than 125 centres have been opened across the country.

He listed the new centres in Ekiti state to include, Femoyo centres, Beijing Universal Limited, ABJ oil and gas, Bovas Company, and NADDC training center in the state capital.

The program director said that the 15 buses donated would be deployed for inter and intra-state transportation towards achieving about 40 percent reduction in the transportation cost and ultimately reduced hike in food items.

According to him, ” the government of President Bola Tinubu through the presidential CNG initiative is committed to ensuring they(transporters) use this for their vehicles because it is cheaper, cleaner and more importantly it is safer and more reliable.

” This is a compressed natural gas, it is not the same you use in your kitchen to cook. It is lighter and stored in a bulletproof container. It is also the fact it is produced in Nigeria and what the president said is that instead of us to continue to import poverty and export jobs. He said will need to look inward and use what God has given us.

” It is about job creation, it is about reducing the cost of transportation and ensuring economic development by moving away from subsidy payment where we were making the few richer.

” This is a more sensible and reliable path for Nigeria in terms of our energy sector, and that is what the president is doing with this initiative.”

Speaking, the state governor, Biodun Oyebanji commended the federal government for the initiative, adding that the state would support the programme towards ensuring that more vehicle owners embrace the CNG conversion.

The governor who was represented by the commissioner for Infrastructure and Public Utilities, Professor Mobolaji Aluko explained that the CNG conversion initiative would help in generating employment opportunities and economic development in line with his shared prosperity agenda for the state.

The state chairman of National Union of Road Transport Workers(NURTW) Joseph Falope and his counterpart in Road Transport Employers Association of Nigeria(RTEAN) Sunday Adeola, expressed delight over the initiative, assuring the government that members of their respective unions would take their vehicles for conversion to CNG.

On his part, the Chief Executive Officer of the National Automotive Design and Development Council (NADDC), Joseph Osanipin said the council has trained no fewer than 45 technicians across the state on how to convert petrol vehicles to CNG-powered vehicles.

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