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FG Exempts Farmers, Manufacturers, SMEs From Paying Withholding Tax

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Recently, the Federal Government of Nigeria has implemented significant changes to the withholding tax regime, exempting certain categories of entities to foster a more favorable business environment. This development was confirmed by Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, in a post on social media.

According to Oyedele, the reforms aim to address various challenges and introduce exemptions and reduced rates under the new withholding tax regime. Key highlights include:

  1. Exemption for Small Businesses: Small businesses are now exempted from withholding tax compliance, which simplifies their tax obligations and reduces administrative burdens.
  2. Reduced Rates for Low-margin Businesses: Businesses with low profit margins will benefit from reduced withholding tax rates, acknowledging their financial constraints.
  3. Exemptions for Manufacturers and Farmers: Manufacturers and producers, such as farmers, are also exempted from withholding tax. This exemption aims to support these sectors crucial to economic growth.
  4. Measures Against Evasion: The reforms include measures to curb tax evasion and minimize tax avoidance, ensuring more effective revenue collection for the government.
  5. Ease of Credit and Utilization: The reforms facilitate easier access to credit and the utilization of tax deducted at source, enhancing liquidity for businesses.

Oyedele highlighted that these changes reflect emerging issues and adopt global best practices in tax administration. The new regulations are expected to be officially published in the gazette soon, providing clarity on the timing of deductions and defining key terms related to withholding tax.

Withholding tax, introduced in Nigeria in 1977, serves as an advance payment of income tax on specified transactions. Its primary objectives are to provide regular revenue to the government and combat tax evasion by ensuring taxes are deducted at the source of income.

Overall, these reforms mark a proactive step by the Nigerian government towards creating a more simplified and business-friendly tax environment, supporting economic activities across various sectors and promoting sustainable growth.

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NCAA Suspends 10 Private Jet Operators Over Failure To Commence Rectification Process

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The Nigeria Civil Aviation Authority (NCAA) has suspended 10 private jet operators over failure to commence the recertification process.

A statement signed by NCAA’s Director, Public Affairs and Consumer Protection, Michael Achimugu, said the suspension was rooted in its Nigeria Civil Aviation Regulations 2023 Part 18.3.4 which forbids holders of Permit for Non-Commercial Flights (PNCF) from using their aircraft for carriage of passengers, cargo or mail for hire or reward which is commercial operation or charter service.The suspended operators are Azikel Dredging Nigeria Ltd, Bli-Aviation Safety Services, Ferry Aviation Developments Ltd, Matrix Energy Ltd, Marrietta Management Services Ltd, Worldwide Skypaths Services, Mattini Airline Services Ltd, Aero Lead Ltd, Sky Bird Air Ltd and Ezuma Jets Ltd.The authority also warned that engaging PNCF holders for commercial purposes is illegal.

It said, “And It will not hesitate to initiate enforcement actions against any PNCF holder found guilty of illegal operations.”

In April, the NCAA suspended three private jet operators’ permits for commercial flights.The Acting Director General of the NCAA, Chris Najomo, at the time, said the Minister of Aviation and Aerospace Development, Festus Keyamo, gave marching orders for the cessation of the use of private jets for commercial purposes in 2023 but the operators continued in such act.“Subsequently, in March 2024, the NCAA had issued a stern warning to holders of the permit for non-commercial flights, PNCF, against engaging in the carriage of passenger-cargo or mail for hire and reward,” Najomo stated.“The Authority had also deployed its officials to monitor activities of private jets at terminals across the airports in Nigeria.

“As a consequence of this heightened surveillance, no fewer than three private operators are involved in violation of the annexure provision of their PNCF and Part 9114 of the Nigeria Civil Aviation Regulations 2023.“In line with our zero tolerance for violation of regulations, the Authority has suspended the PNCF of these operators.”

The regulator had also directed that all non-commercial flight permit holders be re-evaluated on or before April 19, 2024.

“All PNCF holders will be required to submit relevant documents to the authority within the next 72 hours.“This riot act is also directed at existing Air Operator Certificate (AOC) holders, who utilise aircraft listed on their PNCF for commercial charter operations.”The regulator stressed that only aircraft listed in the Operation Specifications of the AOC were authorised to be used in the provision of such charter services.“Any of those AOC holders who wish to use the aircraft for charter operations must apply to the NCAA to delist the affected aircraft from the PNCF and include it into the AOC operations specification.”The NCAA urged the travelling public not to patronise any airline charter operator who does not hold a valid Air Operator Certificate issued by the NCAA.

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FG Clears $850m Debt To EU Airlines

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The Federal Government of Nigeria has successfully cleared a backlog of debts amounting to $850 million owed to European airlines. This significant achievement was announced by Samuela Isopi, the European Union Ambassador to Nigeria and ECOWAS, during the 9th edition of the Nigeria – EU Business Forum held in Abuja.

Ambassador Isopi commended the Nigerian government for taking action to settle the outstanding debts. She also praised the government’s decision to lift foreign exchange restrictions on the importation of forty-three items, which has been viewed positively by the EU.

Nigeria remains a crucial economic partner for the EU, with bilateral trade reaching approximately 35 billion Euros in the past year. Additionally, the EU is the largest foreign investor in Nigeria, with investments valued at around 26 billion Euros, representing a significant portion of Nigeria’s foreign direct investment.

Isopi highlighted the presence of over 230 EU companies operating in Nigeria, contributing to job creation particularly among youths and women. This underscores the economic ties and mutual benefits derived from the EU-Nigeria relationship.

The theme of the forum, ‘Investing in Jobs and Sustainable Future’, reflects the focus on fostering dialogue between the public and private sectors. It aims to emphasize the role of government in supporting businesses to achieve inclusive development, demonstrating a commitment to sustainable economic growth and job creation.

The forum was attended by key figures including Myriam Ferran, Director General at the EU, Atiku Bagudu, Minister of Budget and National Planning, and Nura Rimi, Permanent Secretary at the Ministry of Industry, Trade and Investment. It provided a platform to discuss strategies for enhancing economic cooperation and investment opportunities between Nigeria and the EU.

Overall, the successful settlement of airline debts and the positive outcomes highlighted at the forum signify a strengthening of economic relations between Nigeria and the European Union, with a focus on mutual prosperity and sustainable development.

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Dangote Faults CBN’s 26% Interest Rate

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In a recent address at a summit organized by the Manufacturers Association of Nigeria (MAN), Aliko Dangote, Chairman and Chief Executive of the Dangote Group, strongly criticized the Central Bank of Nigeria (CBN) for its decision to increase the interest rate to nearly 30 percent. This decision was made during the CBN’s Monetary Policy Committee meeting in May, where the Monetary Policy Rate (MPR) was raised from 24.75 percent to 26.25 percent.

Dangote expressed grave concerns about the impact of such high interest rates on businesses, stating that they hinder economic growth and job creation. He emphasized that under these conditions, no meaningful job creation can occur, and economic growth becomes severely constrained.

Furthermore, Dangote called on the Nigerian government to prioritize supporting existing businesses, particularly in the manufacturing sector, by creating a conducive environment for their operation. He stressed the importance of addressing challenges such as power supply and providing affordable financing to stimulate growth and development.

Highlighting the interconnectedness of manufacturing and economic prosperity, Dangote stated that a country dependent on imports remains economically vulnerable and unable to achieve sustainable development.

The MAN President, Otunba Francis Meshioye, echoed Dangote’s sentiments by criticizing government policies and their impact on the manufacturing sector’s performance. He noted a significant number of manufacturers exiting the sector in recent years and urged a reassessment of support mechanisms to bolster manufacturing under the current administration’s agenda.

The summit, attended by Vice President Kashim Shettima and other government officials, provided a platform for industry leaders to address crucial issues affecting the Nigerian manufacturing landscape and advocate for policy changes that could revitalize the sector.

In summary, Dangote’s remarks underscored the urgent need for a more supportive economic environment in Nigeria, particularly concerning interest rates and government policies affecting manufacturing. His stance aligns with broader industry concerns about the sector’s viability and its critical role in national economic development.

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