The Federal Executive Council on Wednesday approved an increase in the Value Added Tax (VAT) payable in Nigeria.
The Minister of Finance, Zainab Ahmed, announced the approval while briefing journalists after the FEC meeting presided by President Muhammadu Buhari.
Mrs Ahmed said the VAT was increased from the current 5 per cent to 7.2 per cent.
“We also reported to council and council has agreed that we start the process towards the increase of the VAT rate.
“We are proposing and council has agreed to increase the VAT rate from 5 per cent to 7.2 per cent,” she said.
Mrs Ahmed gave an increase in revenue accruable to state governments as one of the reasons for the increase.
“This is important because the federal government only retains 15 per cent of the VAT, 85 per cent is actually for the states and local government and the states need additional revenue to be able to meet the obligations of the minimum wage.”
The minister, however, said the implementation will not be immediate as there was the need to amend the current law.
“This process involves extensive consultations that needs to be made across the country at various levels and also it will involve the review of the VAT Act.
“So, it is not going to be implemented immediately until the Act is reviewed,” she said.
She said the increase in the VAT was also included in the government’s revenue projection for 2020.
“Following these assumptions, the total revenue estimate in the sum of N7.5 trillion for the year 2020 and N2.09 trillion that will be accruing to the federation account and the VAT respectively.
“There will of course be the distribution to the three tiers of government based on the statutorily revenue sharing formula as defined in the constitution and to this effect, it means the federal government will be receiving proposed aggregate of N4.26 trillion from the federal account and the VAT pool, while the states and the local government are expected to receive N3.04 trillion and N2.27 trillion respectively,” she said.
Mrs Ahmed also spoke on the government’s planned expenditure for 2020. She said about N2.45 trillion has been proposed for debt servicing.
“The expenditure for the year 2020 is in the total sum of N10.07 trillion. This is three per cent less than the approved expenditure in the 2019 budget that has been passed into law. The total expenditure includes statutory transfers, non-debt recurrent expenditure such as salaries and pensions and also the Social Intervention Programme.
“The 2020 budget has a debt service estimated at N2.45 trillion and a sinking fund to retire maturing obligations issued to local contractors and other creditors in the sum of N296 billion. So there is a total sum of N3.43 trillion that is provided for personnel and pension cost inclusive of N218 billion for the top 19 government-owned enterprises in the country. This represents an increase of N453 billion over the 2019 approved budgetary expenditure. This also implies a 40 per cent of this recurrent expenditure to the projected revenue.
“The budget deficit is projected at N2.15 trillion in the year 2020 and this is lower than what was approved in the 2019 budget which was N2.47 trillion.
“Let me state that these projections include drawdowns on project tied loans and these represent 1.51 per cent of estimated gross domestic product (GDP). This is well below what is allowed by the Fiscal Responsibility Act of 2007 which is still put at 3 per cent.
“I want to add that council approved our presentation and so the next phase for us is to consult with the National Assembly and then the Medium Term Expenditure Framework (MTEF) to the National Assembly for their own view and subsequent approval,” she said.
The 2020 budget proposal is expected to be submitted to the National Assembly when they reconvene from their recess later this month.
Senate President Ahmed Lawan has said the National Assembly would pass the budget before the end of the year if it receives it early from the Executive.
FG Further Reduces Petrol Pump Price to N123.5 Per Litre
The Federal Government on Tuesday night reduced the price of petrol from N125/litre to N123.5/litre.
Announcing the reduction, the Executive Secretary of the PMS pricing regulator, Abdulkadir Saidu, said, “PPPRA, in line with the government approval for a monthly review of Premium.
“Motor Spirit pump price hereby announces guiding PMS pump price of N123.50 per litre.
“The guiding price which becomes effective 1st April 2020, shall apply at all retail outlets nationwide for the month of April 2020. PPPRA and other relevant regulatory agencies shall continue to monitor compliance to extant regulations for a sustainable downstream petroleum sector.”
It added, “Members of the public and all oil marketing companies are to be guided accordingly.”
The spokesperson for PPPRA, Kimchi Apollo, had told our correspondent at 7.30pm that stakeholders had been meeting on the new price since Tuesday morning.
Officials from the Central Bank of Nigeria, Nigerian National Petroleum Corporation, oil marketers and labour unions, among others, who constitute the petroleum products price modulation committee attended the meeting.
On March 19, 2020, a day after the Federal Government announced the pump price of N125/litre for petrol, the PPPRA declared that there was the possibility of a new price regime for the PMS beginning from April 1, 2020.
It explained that the N125/litre price might last till the end of March, as a new cost for petrol might be introduced on April 1.
Saidu had told journalists that the PPPRA would be undertaking a review of the PMS price and would announce a new price for the product on April 1 (today) if there were changes in the parameters used in determining the N125/litre pump price.
In another development, the Transmission Company of Nigeria on Tuesday announced an improvement in power generation.
FirstBank Donates N1bn to Fight Against COVID-19, Reiterates Commitment to Safety
FirstBank has announced its donation of the sum of N1bn towards the joint effort by the Nigerian Private Sector Coalition Against COVID-19 (CACOVID) to rapidly expand the health facilities; especially Testing, Isolation, treatment and the provision of Intensive Care Unit (ICU) facilities pivotal to controlling the spread and importantly, treating individuals diagnosed with COVID- 19. This is in addition to the Bank’s drive to move one million children to e-learning, together with an early partner – Roducate – as recommended by the Ministry of Education, Lagos State
In line with the 14-day stay home directive for Lagos, Ogun and FCT Abuja in the speech by President Muhammadu Buhari, the Bank has also reiterated its preparedness to provide essential Banking services through its alternative channels to its customers and the public at large which is in line with its robust Business Continuity Plan.
Updating on the Bank’s efforts; the Bank’s CEO, Dr. Adesola Adeduntan, said “we promise to continue to look at all areas of intervention where our business infrastructure, reach, digital platforms and other natural strengths lie and can be deployed to further support all efforts for Nigerians; young and old alike.
To that end, we will continue to communicate ways in which we can do more together.
We thank our community of friends, customers and other stakeholders who have continued to send us ideas and initiatives and are gladdened at the solidarity we see as Nigerians come together to tackle this under one umbrella.
Please stay safe and let’s work together to flatten the curve”, he concluded.
Coronavirus: FirstBank Devices Measures to Protect Employees, Customers, Others
Nigeria’s leading financial inclusion services provider, First Bank of Nigeria Limited, has announced proactive measures it has taken to control the spread of the COVID – 19 (Coronavirus) pandemic.
The Bank’s Group Head, Marketing & Corporate Communications, Folake Ani-Mumuney, said “embedded in our corporate strategy is business continuity management that ensures the delivery of products, services and initiatives to our stakeholders and enabling the economy in the long-term with minimal impact.
Therefore, we have employed necessary measures to keep our employees, customers and the general public safe-guarded and sensitised on preventive steps to flatten the curve at the fastest possible rate. These include the deployment of temperature measuring tools; hand sanitisers; face masks and adopting social distancing including utilizing virtual meetings. We have also cancelled owned and partnered planned events in the interim; suspended staff travels and have put measures in place to identify and communicate to staff who are arriving from affected countries to self-quarantine following the established protocols by the World Health Organisation and the government.
In addition, we have been amplifying all necessary official information from relevant health bodies and partners such as encouraging everyone to adhere to good hygiene practices which comprise regular cleaning of all surface areas – for example, tables, door handles – with disinfectants, consistent washing of hands as well as avoiding close contact with people and staying away from crowded environment’’.
Encouraging the use of cashless transactions, Mrs. Ani-Mumuney said; “we implore all our customers to embrace cashless transactions across our self-service platforms like *894# USSD banking services, FirstMobile, WhatsApp Banking, First Online for their needs like funds transfers, various bill payments, credit and internet data recharge and much more. In need of quick loans, these self-service platforms are also designed to meet their immediate needs through our FirstAdvance service”.
For enquiries and complaints, customers are encouraged to contact the Bank’s 24 hours multi-lingual customer care centre, FirstContact, on 01-4485500 or email, firstname.lastname@example.org.
She noted that the Bank is committed to protecting the health and safety of all its staff, customers and host communities as together the fight against Coronavirus would be won.
The National Centre for Disease Control (NCDC) should be reached on its Toll-Free Number: 0800 9700 001 for immediate medical attention and advise.