Business

UK promises ‘robust’ reaction if EU starts trade war over Northern Ireland

The UK will react in a “robust” manner if the EU launches a retaliatory trade war in the event of Brexit talks on Northern Ireland breaking down, the government has warned.

The Brexit minister, David Frost, said he expected the EU to issue its formal response to the UK’s demand for renegotiation of the Northern Ireland protocol within the next 10 days, as he outlined fresh detail on the timeline for talks.

It means a November crunch time for the Democratic Unionist party, which on Monday repeated its threat to quit Northern Ireland’s power-sharing administration and force fresh Stormont elections if substantial progress on ditching the protocol is not made.

Lord Frost said he would then engage with the EU in an “intensive” manner for a “short period” before deciding whether to trigger article 16, the mechanism to suspend parts of the protocol and enter a formal dispute.

“On the talks question, we must do it as quick as possible … The team is ready to go to Brussels,” he said. “We need a short and intensive negotiation, and when I say short, I mean weeks, three weeks.”

“I personally believe there comes a decision point probably around early November when we know an agreement can be reached or it cannot and certain consequences flow from that,” Frost added.

Speaking at a Centre for Brexit Policy event at the Conservative party conference, Frost also warned that if no agreement could be reached, the UK would be “robust” if the EU retaliated by imposing tariffs or other barriers to trade flow between Great Britain and the EU.

“We don’t think retaliation makes any of those things any easier,” he said, but if they did launch trade wars, which could include enforcement action in other parts of the Brexit deal, “proportionality is important”.

Earlier on Monday, the leader of the DUP gave Boris Johnson until the end of October to solve the Northern Ireland protocol row, just hours after the UK issued a veiled threat to the EU that it would pull the plug on the Brexit arrangements.

At a private meeting with the prime minister in Manchester and later at a public event, Sir Jeffrey Donaldson warned that the party needed him to “take action within weeks” or he would force an election in Northern Ireland.

Donaldson, however, said he was “greatly encouraged” by what Johnson had told him on Monday morning and hoped that significant progress could be made within the next three weeks.

The DUP leader was speaking shortly after Frost said Britain “cannot wait for ever” for the EU to respond to its demands to rewrite the Brexit arrangement.

In a speech to the conference, Frost said he had been waiting since July for a formal request for substantial changes to the protocol, which the UK has largely suspended over objections to checks on a range of goods, including sausages.

“We cannot wait for ever. Without an agreed solution soon, we will need to act, using the article 16 safeguard mechanism, to address the impact the protocol is having on Northern Ireland,” he said.

Setting the scene for an imminent triggering of article 16, he said he was not confident that the EU would meet his demands.

“From what I hear, I worry that we will not get one [a response] which enables the significant change we need,” Frost said. .

The government is also coming under renewed pressure from the European Research Group of MPs to ditch the protocol completely.

The chair of the influential group of backbench Tory MPs, Mark Francois, said its members knew the protocol was flawed when they voted for the withdrawal agreement in January 2020, but went into it with their “eyes wide open”. He said the group viewed the protocol as unfinished business at the time and had faith in Frost and Johnson’s ability to renegotiate the arrangements.

David Trimble, one of the architects of the 1998 Northern Ireland peace accord, said there was little point in waiting for the EU to renegotiate the protocol. “They will never change their position. We need to repudiate the entire arrangement.”

The EU’s ambassador to the UK, João Vale de Almeida, said there was nothing strange or unexpected in Frost’s speech, promising a response to the UK’s demands within the coming weeks.

Business

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.

Business

FG imposes levy on transactions above N10,000 on Opay, others

The federal government has imposed a N50 deduction for every electronic money transfer (EMTL) of N10,000 and above, affecting customers of fintech platforms such as Opay and Moniepoint.

The deduction, which is in line with the Federal Inland Revenue Service (FIRS) regulations, is set to take effect from September 9, 2024.

The announcement was made by the fintech companies through notifications to their customers.

In a statement, Opay informed its customers, “Dear valued customers, please be informed that starting September 9, 2024, a one-time fee of N50 will be applied for electronic transfer of N10,000 and above paid into your personal or business account in compliance with the Federal Inland Revenue Service regulations.”

The company clarified that these deductions are part of the government’s requirements and not a revenue stream for fintech companies. “It is important to note that OPay does not benefit from these charges in any way as it is directed entirely to the Federal Government,” the statement added.

Similarly, Moniepoint, another major fintech platform, issued a brief notice, stating: “A N50 fee would be charged on inflows you receive of N10,000 and above from Monday, September 9, 2024. Your BRM is available to answer questions you might have.”

Business

NNPC not the sole offtaker, market open to lower prices from any domestic refinery

The Nigerian National Petroleum Company Limited (NNPC Ltd) has said it has no desire or intention to be the sole offtaker of petrol produced by the Dangote Refinery Limited, DRL.

NNPC Ltd said this while reacting to claim by the Muslim Rights Concern, MURIC that the Dangote Refinery Limited (DRL) is being undermined by actions of the NNPC Ltd.

MURIC had in a statement issued on Friday claimed that recent changes to the pump price of petrol will prevent the Dangote Refinery from selling the product at lower prices to Nigerians.

The group also claimed NNPC Ltd. has become the sole offtaker of all products from the refinery to the detriment of Nigerians.

However, Olufemi Soneye, Chief Corporate Communications Officer, NNPC Ltd in a statement on Saturday dismissed the claims of MURIC.

While puncturing the claims of the group, NNPC LTD in the statement, noted that the pricing of petroleum products from any refinery, including the Dangote Refinery Ltd. (DRL), is determined by global market forces.

The company thefore noted that recent changes in PMS prices have no impact on the DRL or any other domestic refinery’s access to the Nigerian market.

“In fact, if current prices perceived as high, it presents an ideal opportunity for the refinery to sell its products at lower prices in the Nigerian market.

“Furthermore, we emphasize that there is no guarantee of lower prices associated with domestic refining compared to any global parity pricing framework, as confirmed by the DRL.

“The NNPC Ltd. will only fully offtake PMS from the DRL if the market prices of PMS are higher than the pump prices in Nigeria.

“The DRL and any other domestic refinery are free to sell directly to any marketer on a willing buyer, willing seller basis, which is the current practice for all fully deregulated products.

“NNPC Ltd. has no desire or intention to become the distributor for any entity in a free market environment, and therefore, the notion of becoming a sole offtaker does not arise.

“The NNPC Ltd. cannot undermine a business in which it holds a billion-dollar stake.

“As an advocacy group for fair and just treatment, MURIC should have verified the facts before making statements that are entirely flawed and has the potential to incite ordinary Nigerians against the NNPC Ltd.”