Archives 2019

Nigeria Economy Nigeria population is estimated at over 200 million and most populated in Africa and the 7th in the world. As at 2019, the country’s GDP (nominal) is estimated at $447.013 billion with a per capita $2,244.The huge population of the country is a fertile ground for any kind of trade as every nation sees her as a potential trading partner.

Globalisation The advent of internet has revolutionised trade across the world to the extent that emphasis on physical border has shifted in the face of globalisation. But no nation will waive its sovereignty when its territorial integrity is being compromised both from within and outside. Across all nations, countries have signed trade and bilateral agreements to promote economic integration and cooperation. The goal usually is to promote ease of trade across geographical borders without any artificial or deliberate encumbrances from parties to the agreement within terms and conditions.

By
Michael ‘Dare Idowu, Ph.D., ACCA

Taxes can be conveniently classified as either Direct or Indirect. Value Added Tax (VAT) is a good example of an indirect tax of which the incidence or burden of payment falls on manufactured or sale of goods and services. On the other hand, a direct tax burden is shouldered by the individuals and the company. For instance, Personal Income Tax (PIT), Company Income Tax (CIT), PAYE etc are some of the examples of direct taxes.

The quantum of revenue that can be generated by the government through taxation is directly proportional to the state of the economy. In an economy with tax to GDP ratio of 6.1% (Wikipedia), the importance of an indirect tax like VAT cannot be disputed. To depict that, in every N1m of goods and services produced in our economy, taxes generated is just N61, 000. The flip side of the coin is that the country needs to produce a greater GDP to have a higher receivable from taxes.

While it is conceded that the Nigeria economy tax to revenue is poor and among the lowest in Africa and the world at large, whether this is the right time for the Federal Government to move up VAT rate from 5% to 7.5% as recently approved by Federal Executive Council (FEC) has becoming the talking point. Let me quickly remind my readers that the policy direction is yet a proposal except the relevant tax law, in this case, the VAT Act is amended accordingly.

By
Michael ‘Dare Idowu, Ph.D., ACCA

The mal-administration at the local government level in Nigeria has become a major discourse to concerned Nigerians at home and abroad. The abysmal failure of this level of government despite being the closest that should have impacted positively in the lives of local community is hydra in nature and deserves a thorough exposition. It is obviously in our collective best interest for the local government to work so as to deliver the required complementary role to the state government.

CONSTITUTIONAL PROVISION: ADMINISTRATION

Part 2, Section 7(1-6) of Nigeria 1999 constitution as amendeddescribes how the local government administration should be operated and sub-section 6 (a & b) are instructive in the face of current debate.

(6) Subject to the provisions of this Constitution: ­                                               (a) The National Assembly shall make provisions for statutory allocation of  public revenue to local government councils in the Federation; and               (b) The House of Assembly of a State shall make provisions for statutory allocation of public revenue to local government councils within the State.

FUNDING: S162 (1-8) particularly 5-8.

(5) The amount standing to the credit of Local Government Councils in the Federation Account shall also be allocated to the State for the benefit of their Local Government Councils on such terms and in such manner as may be prescribed by the National Assembly.

(6) Each State shall maintain a special account to be called “State Joint Local Government Account” into which shall be paid all allocations to the Local Government Councils of the State from the Federation Account and from the Government of the State.

(7) Each State shall pay to Local Government Councils in its area of jurisdiction such proportion of its total revenue on such terms and in such manner as may be prescribed by the National Assembly.