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By: Anuoluwa Openiyi

Over the poor performance of the 2017 budget at open plenary, the Senate on Thursday reversed itself on the invitation to the Minister of Finance, Mrs. Kemi Adeosun, and her Budget and National Planning counterpart, Senator Udo Udoma.

It instead decided that the ministers should appear before the joint committee on Finance and Appropriation next Tuesday.

The Senate last Tuesday had resolved to invite the ministers to query the reasons for the poor implementation of the N7.441 trillion budget, particularly at a time when the country is working to properly exit recession.

The resolution was taken to have the ministers appear before all 108 (Anambra central seat is vacant) members.

However, following a point of order raised by the Senate Leader, Senator Ahmed Lawan on Thursday, the lawmakers made a fresh resolution to have the ministers make their submissions before the committee.

Lawan argued that the members of the joint committee are in a better position to ask detailed questions from the ministers.

Moreover, it was gathered that the decision may not be unconnected to the need to avert any line of questioning from senators, which may embarrass the All Progressives Congress (APC), with majority in the Senate.
It was further gathered that the opposition members from the Peoples Democratic Party (PDP), might take advantage of the open session to thoroughly grill the ministers and grill them with questions which may expose the failings of the government.

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Finance

Court Freezes N350m Linked to Patience Jonathan

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A Federal High Court in Lagos has ordered that N350 million belonging to AM-PM Global Network Limited, in Stanbic-IBTC bank, be placed on temporary attachment, pending an ongoing investigation by the EFCC.

This order was made by Justice Hadiza Rabiu-Shagari, on Tuesday following an ex-parte application filed by the Economic and Financial Crimes Commission (EFCC).

The application was argued by EFCC’s lawyer, Rotimi Oyedepo, against the company.

In an affidavit deposed to by one Musbau Yahaya, the commission stated that between June 20, 2012 and Nov. 15, 2013, the respondent fraudulently received N1.2 billion into its Diamond Bank account.

He said that the sum was proceeds of an unlawful enrichment derived by Patience Jonathan, who was then a Permanent Secretary, appointed by the Bayelsa State Government.

The deponent also stated that in a bid to dissipate the fund, the respondent opened an account with Stanbic-IBTC Bank.
He said out of the alleged proceeds of unlawful enrichment of Mrs Jonathan, the respondent, transferred N350 million, from its Diamond Bank account to the account sought to be attached.

He added that there was a desperate bid to dissipate the funds.
The deponent further stated that the commission had traced the said N350 million to the respondent’s account, now sought to be attached.

He added that a court order is needed to instruct the bank to attach the account to prevent the dissipation of the funds.
The commission argued that unless the application was determined, the respondent will tamper with the account being sought to be attached.

He submitted that it will serve the course of justice if the application is granted.
After listening to the submissions of counsel, Justice Rabiu-Shagari ordered the temporary freezing of the sum of N350 million, belonging to AM-PM Global Network Ltd, at the Stanbic-IBTC Bank, pending the conclusion of the investigation on the account by the EFCC.

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BUSINESS

IMF Wants Nigeria to Stop Tax Holidays

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The International Monetary Fund has advised the Federal Government to implement a reform that would see it phase out tax holidays and exemptions eroding the Company Income Tax base.

This came from the Senior Resident Representative and Mission Chief for Nigeria, Africa Department, IMF, Mr. Amine Mati, while making a presentation at a forum organised by the Chartered Institute of Bankers of Nigeria in Lagos on Saturday, as he said the Federal Government needed to reduce interest payments on borrowed funds to about 30 per cent of the country’s revenue.

The Washington-based Fund also asked the Federal Government to increase taxes imposed on tobacco and alcohol, emphasising the need for socially responsible fiscal adjustment based on revenue mobilisation.

According to Mati, there is also a need for Nigerian policymakers to move beyond voluntary compliance measures in tax matters in order to mobilise non-oil revenue and increase the fiscal space.

In the presentation, he stressed the need to embark on full Value Added Tax and broaden it.

On monetary policy, Mati welcomed the recent “de facto” tighter monetary policy stance and said there was a need to “stop the financing of the central bank to the government and strengthen the monetary policy framework.”

On exchange rate, the IMF chief told the Central Bank of Nigeria that the “recent introduction of the Investors and Exporters FX window is welcomed and there is a need to address market segmentation; remove FX restriction; simplify/unify the FX market; and improve operations of the FX market in line with market fundamentals.”

Mati said there were significant economic headwinds amid challenges and elevated risks for the country.

He noted that the Federal Government’s Economic Recovery and Growth Plan was an important step forward, adding that important policies and steps had been taken but policy action remained urgent.

“Comprehensive policy package is needed, including front-loaded non-oil revenue mobilisation, greater exchange rate stability.”

A former President of the Chartered Institute of Taxation of Nigeria, Chief Mark Dike, described tax as a compulsory levy imposed by the government on individuals and companies for the provision of public goods and services.

As a result, he said he was of the opinion that the government should create an enabling environment and provide general incentives for companies, adding that tax waivers and holidays could create a lack of level playing field.

According to him, the government can reduce the tax rate to enable every company and individuals to pay.

In terms of using tax to generate employment in some sectors, Dike said questions had arisen on the number of jobs being created in such sectors.

The Director-General, West Africa Institute for Economic Management, Prof. Akpan Ekpo, said the government might still need to give little tax holidays in order to encourage foreign direct investments and domestic investments in certain sectors.

He, however, said that such tax holidays and exemptions should be given for only a short and definite period of time, and to only very few credible companies that had proven records.

According to him, tax holiday and waivers have been abused in Nigeria and the government needs to watch the manner such are given.

On the need to increase taxes on alcohol and tobacco, Ekpo stated that it was necessary owing to the health hazards they pose.

An economic analyst and Chief Executive Officer of Cowry Asset Management Limited, Mr. Johnson Chukwu, said there was a need for the Federal Government to overhaul the entire tax holiday system, especially in the pioneer sectors, because the current system allowed corruption.

According to Chukwu, there is a need to still give tax holidays and exemptions but it has to be only for a short period on an initial investment.

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BUSINESS

Nigeria’s Securities and Exchange Commission Orders Suspension of Oando Shares

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Nigeria’s Securities and Exchange Commission (SEC) has ordered the suspension of Oando shares citing concerns about possible insider trading and the oil company’s shareholding structure.

Oando, with dual listings in Johannesburg and Toronto, said it would issue a statement in due course.

Its shares last traded at 5.99 naira in Lagos.

The regulator said it had carried out a comprehensive review of Oando after it received two petitions and found related party transactions were not conducted at arm’s length and discrepancies in its ownership structure.A company source said the petitions centred around the ownership of some Oando shares bought through an investment vehicle at the time the company bought ConocoPhillips’ Nigerian business for $1.65 billion in 2014.

It was noted that the petitions centred around the ownership of some Oando shares bought through an investment vehicle at the time the company bought ConocoPhillips’ Nigerian business for $1.65 billion in 2014.

“The commission notes that the above findings are weighty and therefore needs to be further investigated. After due consideration, the Commission believes that it is necessary to conduct a forensic audit into the affairs of Oando Plc,” the SEC said in a statement.

It said a team of auditors, lawyers, stockbrokers and share registrars would conduct the forensic audit on Oando to ensure independence.

The SEC said in July it was investigating Oando’s shareholding structure.

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