I got this mail from HR a couple of minutes ago:

The President of the Federal Republic of Nigeria recently signed into law some amendments to the Personal Income Tax Act (PITA). The two main changes as follows:

1. The current Personal Relief Allowance (PRA) which was defined as N50,000 plus 20% of Earned Income, will be replaced by the Consolidated Relief Allowance (eRA). The value of this relief allowance has been increased. The definition is somewhat contradictory in the amendments and this has been pointed out to the Federal Inland Revenue Service by various Tax Experts.

2. A new Income Tax Table has been introduced as follows:

Before:

First N30,000 taxed at 5%
Next N30,000 taxed at 10%
Next N50,000 taxed at 15%
Next N50 000 taxed at 20%
Above N160 000 taxed at 25%

Now:

First N300,000 taxed at 7%
Next N300,000 taxed at 11%
Next N500,000 taxed at 15%
Next N500,000 taxed at 19%
Next NI, 600,000 taxed at 21%
Above N3, 200,000 taxed at 24%

If this is a palliative measure it's not a bad first move if you ask me. . .

Its like you have not paid double for transportation.

@op
muhehehe. . .don't be carried away.It changes nothing cos d masses r still going 2 spend more on fuel 4 gen sets,trnsportation and goods and services

Nice except that the lowest earners at less than N30,000 still have to pay 7% now as against 5% then so it's worse for them. Or maybe I don't understand the scale.

netotse:

I got this mail from HR a couple of minutes ago:

If this is a palliative measure it's not a bad first move if you ask me. . .

We should examine the "new" regime in perspective of per capita income.   Nigeria's Per capita income for 2010 , according to the link below, is $2,500.00 approximately N400, 000.

http://www.indexmundi.com/nigeria/gdp_per_capita_%28ppp%29.html


Well, under the new regime, a Nigerian earning per capita income (the best figure for comparison) will pay N32,000 (N21,000 for the first 300,000 at 7% and N11,000 on 100,000 pegged at 11% for the next 300, 000).

Under the old regime, a Nigerian earning circa per capita income will pay :

First N30,000 taxed at 5% =          N1,500.00
Next N30,000 taxed at 10% =        N3,000.00 covers band N30,000 up to the N60,000 salary threshold.
Next N50,000 taxed at 15% =        N7,500.00 covers band N60,000 up to the N110,000 salary threshold
Next N50 000 taxed at 20% =        N10,000.00 covers band N110, 000 up up to the N160,000 salary threshold
Above N160 000 taxed at 25%=     N60, 000. 00 covers band N160,000 to N400,000. 000 (being per capita income)

Total =  N82, 000.00 . The difference between old and new is then N50,000 for those earning circa N400,000.00. The difference is much less for those earning less than N160,000. 00 (around N10,800. 00) . That does not seem like much of "palliative" to me when hyper inflation is factored in that doubles or treble the cost of everything from food through to rent and even a haircut. 

I am no tax expert or accountant , and I certainly welcome correction, but I do my own UK tax return similar to what is laid out below that I picked out randomly and will assume the above calculation is correct.



http://www.ato.gov.au/youth/content.aspx?doc=/content/40811.htm

Taxable income


Tax on this income

$1 - $6,000                   Nil

$6,001 - $34,000          15% for each dollar over $6,000 (maximum tax in this bracket is 15% of $28,000= $4,200)

$34,001- $80,000          $4,200 + 30% for each dollar over $34,000 (maximum tax in this bracket is $4,200+ $13,800= $18,000

$80,001 - $180,000        $18,000 + 40% for each dollar over $80,000 (maximum tax in this bracket is $18,000, + $40,000 = $58,000)

$180,000+                      $58,000 + 45% for each dollar over $180,000

The first $6,000 you earn in an income year is tax-free. This is called the tax-free threshold.

Do we really think the initial post actually reflects FG's intended taxation policy? The post started with these words:

netotse:

I got this mail from HR a couple of minutes ago:

So on the basis of an email from HR of whatever company the OP works in we can glean FG's personal income tax bands?

Not good enough until you chop that N1billion Naira budget for food GEJ.

In two days of protest you have chopped [size=18pt]N6 million in food[/size].

Bros, if u earn over N3m per annum, dr is no reduction anywhere. U would be paying more tax in 2012.

@gbawe
you have a point sha the extra income isn't that much. . .


@xavier
the figures are per month o, if you earn 3m a year you still fall under the 0 - 300k band, so you're paying less P.A.Y.E. na the armed robbers wey dey earn above 3m a month don enter one chance

@aletheia
na why I put "?" in the topic o, I still dey look for other sources to corroborate the matter o. . .even though the pepper sellers I work for should know what they're talking about

all i want to see is a memorandum if nigeria can stick together or ,

Jonathan, ‎"The DEATH that knocks down your Friend (Gadafi) is Speaking to you in parables" If you have ears, use it wisely and listen.

Too much Fedora hat wearing must have damaged this man's brain. I think he needs to let more air in. How many of the miserably poor masses (who constitute the overwhelming majority of the population) actually earn 'taxable' income? Is it the Okada rider in the streets, or the Akara seller around the corner, or the petty trader in a makeshift kiosk, or the pure water hawker on the roadside that would enjoy this useless tax reduction or what? A more sensible move would have been to INCREASE the tax of high earners by 100% (thereby reducing the amount of disposable income they have to waste on 'ego trips' and other nonsensical vanities), and plough back the proceeds to social safety nets and infrastructure projects - while leaving the fuel subsidy in place!

I'm rich so I don't need subsidy or palliatives. Tax me more and give to the poor. We need to find ways in which whatever subsidy benefits only the poor.

efisher:

I'm rich so I don't need subsidy or palliatives. Tax me more and give to the poor. We need to find ways in which whatever subsidy benefits only the poor.

Now that's the sort of rich guy that armed robbers and angry, deprived youths should spare when the day of reckoning comes - as it eventually will.

It's good news for those who earn more. It favours those who earn alot than those who earn below 500k per annum.

This is not a 'palliative'.

netotse:

@xavier
the figures are per month o, if you earn 3m a year you still fall under the 0 - 300k band, so you're paying less P.A.Y.E. na the armed robbers wey dey earn above 3m a month don enter one chance

@ Netotse, If the figure you quoted is per month earning; then it renders gbawe's calculation useless, and I think it is a good measure ; as most people agree that Subsidy benefits the few, due to corruption in the system, And something along this line was  suggested by Thisday editor a while back if there was away to give the money to the masses instead of the few who get rich by playing the system.

@ Gbawe, N50k rebate in tax going by your calculation is equivalent to 200 pounds, not  sure people on PAYE anywhere in europe are getting such, and inflation has been well over target, rising food cost, Gas, Electric and Petrol cost, So while not saying it is the best solution for subsidy removal, but it is sure a decent palliative for those who will be hit by the effect of subsidy removal.

Rubbish move because of the large percentage the informal sector contributes to the economy and how it has been affected by subsidy removal. A good move would have probably been to force down VAT coupled with loosening interest rates.

@netotse
The figures there are annual and not monthly. I work with the wages dept in my organisation

netotse:

@gbawe
you have a point sha the extra income isn't that much. . .


@xavier
the figures are per month o, if you earn 3m a year you still fall under the 0 - 300k band, so you're paying less P.A.Y.E. na the armed robbers wey dey earn above 3m a month don enter one chance

@aletheia
na why I put "?" in the topic o, I still dey look for other sources to corroborate the matter o. . .even though the pepper sellers I work for should know what they're talking about

efisher:

I'm rich so I don't need subsidy or palliatives. Tax me more and give to the poor. We need to find ways in which whatever subsidy benefits only the poor.

Asking a corrupt government to tax you more to fund the poor , which poor?, oh boy! You really think the FG cares about the poor?

Let me explain a little a abt d tax issue. Let us say ur total income for a year is 1m. The first 200k is tax free and the next 300 will be subjected to 17% and d next 300 to d next tax rate and so on. So someone earning 80k\month and is subjected to something like 16k tax b4 will now be paying something like 6k.

I think i understand Al harem and jason's confusion your confusion was orchestrated by Ruben Abiati and GEJ by proxy.
How many of you have researched on this subsidy issue before taking a stand?There are more misnomers than facts surrounding this subsidy brouhaha.

First, the Govt said the economy will collapse, ridiculous indeedsecondly, the Govt said oil importers are a 'cabal', nearly fell off my seat.

Fellow Nigerians, there are no cabals, in 2009 the scarcity of petroleum products became intense and the Govt admitted that Nnpc through its subsidiary PPMC has failed Nigerians by their inability to meet up with the supply of pet. Products and that phenomenon gave rise to licensing of some people to 'assist' the Nnpc in doing their job for which they are paid for.

Please don't forget that hitherto, Nnpc has been doing the importation and refining themselves before corruption eroded their common sense.These importers went abroad and came back with a price Nnpc is already aware of comprising of logistics, storage and administrative costs, these were quantified before they arrived at a price.
The FG now fixed a price tag of 65naira on Pms and agreed to be reimbursing the importers the balance not oblivious of the fact that the landing cost is higher than the stipulated price

To my greatest chagrin, the Jonathan’s administration woke up and termed them 'cabals' who are fleecing the nation.Assuming Ruben Abiati goes abroad to buy a TM underwear for 1k and decides to sell it 1.5k adding purchase price  plus logistics plus profit and the Govt tells him to sell at 900 naira, wont he ask for the 600naira balance? 

When the incompetent NNPC agrees to reimburse him, then he has become a cabal stealing from the GOvt?

Are we this docile? If Nnpc lived up to their responsibility, we won’t have need for the importers in the first place.

There is no doubt that the subsidy regime is met with corrupt practices, is it not the responsibility of the govt to clamp down on those malfeasance?

The only solution that came to the minds of this disgruntled PDP administration is to remove subsidy into-to not minding its inflationary consequences.

This is the si1liest approach any human being with brain if they have one can summon.

Thirdly,

Jonathan insulted the intelligence of Nigerians telling us  that we don't benefit from this subsidy except for the importers and he had the unbridled temerity to be advertising it on NTA saying the rich are getting richer.
This people are demons.

When Ruben abiati's mother goes to the market to buy vegetable at a price, does he not know that the seller included cost of transportation to that price?
So when the transporter buys PMS @ 65naira and fixes his price based on that, he says his mother did not benefit from the subsidy that guaranteed the price in the first place?
In generator driven economy like ours?It is either Ruben Abiati and his employers are drunks or they think that Nigerians are m0rons.

I feel sorry for people that think that competition will crash the deregulated price erroneously juxtaposing it with GSM.
Do you know that the price of crude being the raw material for refined pet. Products are sold at the same price in the whole world?

If you agree to this, then, even if you deregulate and license 5million importers the product will still be expensive because crude itself is expensive. You will still need to subsidize it to 65naira. Exactly why deregulation of diesel in part did not work.
The only reason you have not bought diesel @ 200naira is because there are so many illegal refineries who bunker crude, settle JTF and refine diesel at a lower price.

This people still pose a great threat to the importers who buy at a higher price that is why you get diesel @ 140naira elsewhere but in the delta i buy as low as 70naira.At this verge you will not over rule the fact that these unscrupulous elements contribute to the availability of diesel, if you are in doubt, anywhere you see cheap diesel, ask the dealer the source of his consignment If he is honest he will tell you the truth, when i was told, i took an hr 20mins boat ride to a remote village in the delta between Belema and Kola communities and i saw the local refinery myself.

I will post the pictures later.Conduct a chemical test on those cheap diesels if you are not convinced and you will realize a lot of additives are missing.Sounds incredible but those are the realities on ground.You now know why many importers in the delta hardly have diesel.

I still feel sorry for those who think the Govt should build more refineries, that will not solve the problem either because there is no cheap crude to supply these refineries.

The oil production of Nigeria stands at 2.37 million barrels of crude daily. Nigeria get this crude in a JV (joint venture) with IOC's (international oil companies) and the Nigeria's cut stand btw 55% to 60% of the lot, if we go by 60% thenThat gives a total of 1.4m barrels daily.If we average the crude price from 2009 till date, the price falls close to 100usd/bbl.
In that case, Nigeria makes 140,000,000usd daily from this JV.
Nigeria has a policy called DSO (domestic supply obligation) which mandates 250,000bbl/d of this crude to be refined and consumed locally,In monetary terms, the Nigerian govt is giving us 25,000,000usd worth of crude to refine.Our three refineries at optimum capacity utilizes 450,000bbl/d which gives 45,000,000usd in monetary terms in other words, the price of raw material in this case, crude, accrued to our refineries comes at 45m usd per day, if you add refining cost and profit of 6usd per bbl,
The total cost becomes 270,000,000usd per day.There is no way you can refine that crude at that price and sell it 65naira/l and make profit.

Meanwhile, once we mark out that 45m usd worth of crude for our refineries (assuming they are working at optimum capacity), the govt has already lost 45m usd from their 140m usd daily earnings (which will affect budget implementation) and after refining will still spend more money to subsidize it to 65naira/l

With this analogy, you will agree with me that if all our refineries are working optimally, the govt will spend 3times our present day subsidy to bring the pump price down to 65naira/l.

So, for those of you clamoring for refineries should be careful what you wish for because there is no cheap crude for you to refine.I have argued abinitio that the sales of other derivatives of crude will bring down the cost of most sort PMS,DPK etc but after doing some feasibility studies, i realized i was dead wrong.

I further argued that to make cheaper crude available for our refineries, the Govt should reduce the price at which it is supplied unfortunately, the senate mandated the then GMD of Nnpc that the DSO must be sold at international crude price.

This i believe was proposed for the following reasons:

1 the refineries are working below capacity so what the heck does Nnpc use the crude for?

2, there is a benchmark on crude price for budget implementation.With these reasons, any existing or yet to exist refinery in Nigeria will get crude at a high price and must need subsidy to sell at 65naira/l, at this cross road, the then GMD of Nnpc decided that all crude should be exported and subsidy be paid on imported products.

Guess he was left with no choice.At this verge, i must reiterate here that competition amongst importers will only crash the profit margin but not cost price.

Even if every Nigerian becomes an importer of pet. Prods, we can never change the fact that crude in the int l market is already expensive before thinking of refined prod.

So we must need subsidy to make profit.Before this issue of subsidizing petroleum products can be addressed,You must have the following at the back of your minds:

1, Nigeria pegs a benchmark on crude prices to enable it implement budget. This stands at 75usd/bbl. And this crude is sort from the JV.

2, if crude price exceed the benchmark above, Nigeria makes excess crude revenue (ECR)

3, conversely, if we make excess crude revenue, the price of subsidy on refined products shoot up.With the above analogy,
One can argue that the ECR be used to subsidize imported petroleum products since both are a function of each other unfortunately in Nigeria, it comes with its own challenges.By law, the constitution clearly states that

"all revenue accrued to the FG be shared amongst the three tiers of Govt".

This alone makes it illegal for the FG to keep the ECR to itself for whatever reason.This is where the wahala started, during GEJ's campaign, he astronomically increased workers salary without consulting the state Governors,most Governors have refused to pay on the grounds that they cannot afford it.
On that grounds Taraba, jigawa and some other states have a genuine case.

With the above development, the states started scrambling for funds and remembered the ECR and insisted it must be shared to enable them pay the new wage and develop infrastructures.

The FG had no choice but to capitulateWith this development, the FG is left with little or no choice.The way forward:In the short run:While the FG is consulting, they must consider these options,

1,  identify and tackle the corruption prevalent in the subsidy regime. That will push down the cost of the subsidy in the first place.Like i said in April, no matter how sincere GEJ think his administration is, he cannot make any reasonable progress in the face of corruption,

2, the power projects must come upstream before removing subsidy, this will reduce the demand on pet. Products to a very great extent.

3, Nigeria must accommodate Gas export, port duties and other forms of revenue in their budget implementation policies

.4,  Govt must never invest an extra kobo in our moribund refineries, by doing otherwise, the cost price of the refineries will rise to an extent that it will no longer be attractive to investors or will prolong their repayment plan.Thereby making it very capital intensive.

5, Instead of deceiving Nigerians with their cabal bullshit and deluding them that they don't benefit from this subsidy, the FG should channel that propaganda with intense lobbying to the senate,NLC and civil society organizations to stop the state governors from demanding for the ECR, this can be achieved by the FG asking the state to pay whatever increment they can afford for the workers that way the ECR will be used for subsidizing pet. Products.

In the long run:

1 Nigeria must seek local production capacity.It is no longer news that Nnpc and its subsidiaries have failed woefully in meeting the needs of the Nigerian people.Nnpc through its subsidiary Npdc and Ngc are saddled with the responsibility of the above for oil and gas production respectively,

but as i write, the current production of NPDC stands at a paltry 90,000bbl/day which is a huge failure for an agency set up 23yrs ago,The IOC's has made us believe that it will cost less than 12usd to extract 1bbl of our oil.

The Management of NPDC must be reshuffled and if possible experts brought in on contract basis to improve NPDC's productionThese experts must be placed on targets appraised by milestones. in ogoni land for instance, Anglo dutch has a lot of abandoned production facilities and marginal wells and others scattered all over the country,

these can be bought by NPDC with the money FG want to waste on refineries to improve production,If NPDC can extract oil at 12usd/bbl and make a little profit, with this cheap oil available,

Nigeria will have no reason going to the JV. This cheap crude will attract investors to build refineries and create jobs,A 250,000bbl/d refinery will cost a little above 5b usd, dangote alone can afford two of those only if NPDC can guarantee cheap oil. This is why no investor is coming to build refineries.

A crude price of 18usd/bbl from NPDC will guarantee pump price of less than 22naira per litre of pms from these refineries.With this plan,

By the end of this Administration, NPDC will have robust production capacity and the refineries will guarantee steady refined products.

These refineries shouldn't be operated by the Govt for any reason.The FG will generate revenue from both ends, export of crude and export refined products and the production of NPDC must be increasing periodically.Once the above takes effect, there won’t be any need to be paying subsidy because pump price will be around 23naira/l and inflation will reduce by 40‰.

Now, how competent is Allison Madueke and iweala if they can’t figure this out?

To think of removing subsidy at this stage where there is no electricity and high corruption rate will be tantamount to economic suicide.

Please if the both of you want a trial and error approach to economic solutions please try the next country or preferably Haiti.

What iweala forgot is that in the face of inflation the cost of running Govt projects will be high, All Govt contractors will definitely come back for contract variations or Abandon those projects.

As a sound economist, she should tell Nigerians the value of 1.3 trillion naira ( she intends to save on subsidy removal) in the face of 60% inflation and how many projects Nigerians will benefit from the subsidy removal.

If you remove subsidy and the money disappears, then it is a NO NO for Nigerians

jp philips:

I think i understand Al harem and jason's confusion your confusion was orchestrated by Ruben Abiati and GEJ by proxy.
How many of you have researched on this subsidy issue before taking a stand?There are more misnomers than facts surrounding this subsidy brouhaha.

First, the Govt said the economy will collapse, ridiculous indeedsecondly, the Govt said oil importers are a 'cabal', nearly fell off my seat.

Fellow Nigerians, there are no cabals, in 2009 the scarcity of petroleum products became intense and the Govt admitted that Nnpc through its subsidiary PPMC has failed Nigerians by their inability to meet up with the supply of pet. Products and that phenomenon gave rise to licensing of some people to 'assist' the Nnpc in doing their job for which they are paid for.

Please don't forget that hitherto, Nnpc has been doing the importation and refining themselves before corruption eroded their common sense.These importers went abroad and came back with a price Nnpc is already aware of comprising of logistics, storage and administrative costs, these were quantified before they arrived at a price.
The FG now fixed a price tag of 65naira on Pms and agreed to be reimbursing the importers the balance not oblivious of the fact that the landing cost is higher than the stipulated price

To my greatest chagrin, the Jonathan’s administration woke up and termed them 'cabals' who are fleecing the nation.Assuming Ruben Abiati goes abroad to buy a TM underwear for 1k and decides to sell it 1.5k adding purchase price  plus logistics plus profit and the Govt tells him to sell at 900 naira, wont he ask for the 600naira balance? 

When the incompetent NNPC agrees to reimburse him, then he has become a cabal stealing from the GOvt?

Are we this docile? If Nnpc lived up to their responsibility, we won’t have need for the importers in the first place.

There is no doubt that the subsidy regime is met with corrupt practices, is it not the responsibility of the govt to clamp down on those malfeasance?

The only solution that came to the minds of this disgruntled PDP administration is to remove subsidy into-to not minding its inflationary consequences.

This is the si1liest approach any human being with brain if they have one can summon.

Thirdly,

Jonathan insulted the intelligence of Nigerians telling us  that we don't benefit from this subsidy except for the importers and he had the unbridled temerity to be advertising it on NTA saying the rich are getting richer.
This people are demons.

When Ruben abiati's mother goes to the market to buy vegetable at a price, does he not know that the seller included cost of transportation to that price?
So when the transporter buys PMS @ 65naira and fixes his price based on that, he says his mother did not benefit from the subsidy that guaranteed the price in the first place?
In generator driven economy like ours?It is either Ruben Abiati and his employers are drunks or they think that Nigerians are m0rons.

I feel sorry for people that think that competition will crash the deregulated price erroneously juxtaposing it with GSM.
Do you know that the price of crude being the raw material for refined pet. Products are sold at the same price in the whole world?

If you agree to this, then, even if you deregulate and license 5million importers the product will still be expensive because crude itself is expensive. You will still need to subsidize it to 65naira. Exactly why deregulation of diesel in part did not work.
The only reason you have not bought diesel @ 200naira is because there are so many illegal refineries who bunker crude, settle JTF and refine diesel at a lower price.

This people still pose a great threat to the importers who buy at a higher price that is why you get diesel @ 140naira elsewhere but in the delta i buy as low as 70naira.At this verge you will not over rule the fact that these unscrupulous elements contribute to the availability of diesel, if you are in doubt, anywhere you see cheap diesel, ask the dealer the source of his consignment If he is honest he will tell you the truth, when i was told, i took an hr 20mins boat ride to a remote village in the delta between Belema and Kola communities and i saw the local refinery myself.

I will post the pictures later.Conduct a chemical test on those cheap diesels if you are not convinced and you will realize a lot of additives are missing.Sounds incredible but those are the realities on ground.You now know why many importers in the delta hardly have diesel.

I still feel sorry for those who think the Govt should build more refineries, that will not solve the problem either because there is no cheap crude to supply these refineries.

The oil production of Nigeria stands at 2.37 million barrels of crude daily. Nigeria get this crude in a JV (joint venture) with IOC's (international oil companies) and the Nigeria's cut stand btw 55% to 60% of the lot, if we go by 60% thenThat gives a total of 1.4m barrels daily.If we average the crude price from 2009 till date, the price falls close to 100usd/bbl.
In that case, Nigeria makes 140,000,000usd daily from this JV.
Nigeria has a policy called DSO (domestic supply obligation) which mandates 250,000bbl/d of this crude to be refined and consumed locally,In monetary terms, the Nigerian govt is giving us 25,000,000usd worth of crude to refine.Our three refineries at optimum capacity utilizes 450,000bbl/d which gives 45,000,000usd in monetary terms in other words, the price of raw material in this case, crude, accrued to our refineries comes at 45m usd per day, if you add refining cost and profit of 6usd per bbl,
The total cost becomes 270,000,000usd per day.There is no way you can refine that crude at that price and sell it 65naira/l and make profit.

Meanwhile, once we mark out that 45m usd worth of crude for our refineries (assuming they are working at optimum capacity), the govt has already lost 45m usd from their 140m usd daily earnings (which will affect budget implementation) and after refining will still spend more money to subsidize it to 65naira/l

With this analogy, you will agree with me that if all our refineries are working optimally, the govt will spend 3times our present day subsidy to bring the pump price down to 65naira/l.

So, for those of you clamoring for refineries should be careful what you wish for because there is no cheap crude for you to refine.I have argued abinitio that the sales of other derivatives of crude will bring down the cost of most sort PMS,DPK etc but after doing some feasibility studies, i realized i was dead wrong.

I further argued that to make cheaper crude available for our refineries, the Govt should reduce the price at which it is supplied unfortunately, the senate mandated the then GMD of Nnpc that the DSO must be sold at international crude price.

This i believe was proposed for the following reasons:

1 the refineries are working below capacity so what the heck does Nnpc use the crude for?

2, there is a benchmark on crude price for budget implementation.With these reasons, any existing or yet to exist refinery in Nigeria will get crude at a high price and must need subsidy to sell at 65naira/l, at this cross road, the then GMD of Nnpc decided that all crude should be exported and subsidy be paid on imported products.

Guess he was left with no choice.At this verge, i must reiterate here that competition amongst importers will only crash the profit margin but not cost price.

Even if every Nigerian becomes an importer of pet. Prods, we can never change the fact that crude in the int l market is already expensive before thinking of refined prod.

So we must need subsidy to make profit.Before this issue of subsidizing petroleum products can be addressed,You must have the following at the back of your minds:

1, Nigeria pegs a benchmark on crude prices to enable it implement budget. This stands at 75usd/bbl. And this crude is sort from the JV.

2, if crude price exceed the benchmark above, Nigeria makes excess crude revenue (ECR)

3, conversely, if we make excess crude revenue, the price of subsidy on refined products shoot up.With the above analogy,
One can argue that the ECR be used to subsidize imported petroleum products since both are a function of each other unfortunately in Nigeria, it comes with its own challenges.By law, the constitution clearly states that

"all revenue accrued to the FG be shared amongst the three tiers of Govt".

This alone makes it illegal for the FG to keep the ECR to itself for whatever reason.This is where the wahala started, during GEJ's campaign, he astronomically increased workers salary without consulting the state Governors,most Governors have refused to pay on the grounds that they cannot afford it.
On that grounds Taraba, jigawa and some other states have a genuine case.

With the above development, the states started scrambling for funds and remembered the ECR and insisted it must be shared to enable them pay the new wage and develop infrastructures.

The FG had no choice but to capitulateWith this development, the FG is left with little or no choice.The way forward:In the short run:While the FG is consulting, they must consider these options,

1,  identify and tackle the corruption prevalent in the subsidy regime. That will push down the cost of the subsidy in the first place.Like i said in April, no matter how sincere GEJ think his administration is, he cannot make any reasonable progress in the face of corruption,

2, the power projects must come upstream before removing subsidy, this will reduce the demand on pet. Products to a very great extent.

3, Nigeria must accommodate Gas export, port duties and other forms of revenue in their budget implementation policies

.4,  Govt must never invest an extra kobo in our moribund refineries, by doing otherwise, the cost price of the refineries will rise to an extent that it will no longer be attractive to investors or will prolong their repayment plan.Thereby making it very capital intensive.

5, Instead of deceiving Nigerians with their cabal bullshit and deluding them that they don't benefit from this subsidy, the FG should channel that propaganda with intense lobbying to the senate,NLC and civil society organizations to stop the state governors from demanding for the ECR, this can be achieved by the FG asking the state to pay whatever increment they can afford for the workers that way the ECR will be used for subsidizing pet. Products.

In the long run:

1 Nigeria must seek local production capacity.It is no longer news that Nnpc and its subsidiaries have failed woefully in meeting the needs of the Nigerian people.Nnpc through its subsidiary Npdc and Ngc are saddled with the responsibility of the above for oil and gas production respectively,

but as i write, the current production of NPDC stands at a paltry 90,000bbl/day which is a huge failure for an agency set up 23yrs ago,The IOC's has made us believe that it will cost less than 12usd to extract 1bbl of our oil.

The Management of NPDC must be reshuffled and if possible experts brought in on contract basis to improve NPDC's productionThese experts must be placed on targets appraised by milestones. in ogoni land for instance, Anglo dutch has a lot of abandoned production facilities and marginal wells and others scattered all over the country,

these can be bought by NPDC with the money FG want to waste on refineries to improve production,If NPDC can extract oil at 12usd/bbl and make a little profit, with this cheap oil available,

Nigeria will have no reason going to the JV. This cheap crude will attract investors to build refineries and create jobs,A 250,000bbl/d refinery will cost a little above 5b usd, dangote alone can afford two of those only if NPDC can guarantee cheap oil. This is why no investor is coming to build refineries.

A crude price of 18usd/bbl from NPDC will guarantee pump price of less than 22naira per litre of pms from these refineries.With this plan,

By the end of this Administration, NPDC will have robust production capacity and the refineries will guarantee steady refined products.

These refineries shouldn't be operated by the Govt for any reason.The FG will generate revenue from both ends, export of crude and export refined products and the production of NPDC must be increasing periodically.Once the above takes effect, there won’t be any need to be paying subsidy because pump price will be around 23naira/l and inflation will reduce by 40‰.

Now, how competent is Allison Madueke and iweala if they can’t figure this out?

To think of removing subsidy at this stage where there is no electricity and high corruption rate will be tantamount to economic suicide.

Please if the both of you want a trial and error approach to economic solutions please try the next country or preferably Haiti.

What iweala forgot is that in the face of inflation the cost of running Govt projects will be high, All Govt contractors will definitely come back for contract variations or Abandon those projects.

As a sound economist, she should tell Nigerians the value of 1.3 trillion naira ( she intends to save on subsidy removal) in the face of 60% inflation and how many projects Nigerians will benefit from the subsidy removal.

If you remove subsidy and the money disappears, then it is a NO NO for Nigerians

To the trash bins of History, bunkers Waste of time, can't be bothered replying to assumptions and calculations that are out of place, good try, zero impact!

@ omo tier
the post was meant for Nigerians in Nigeria not Nigerians in the Uk working as genitors, cab drivers, security guards, door men and mortuary attendants.

it is a message for Nigerians that wish to make ur motherland a better place so that your likes will come back from exile.

Now quickly go and change that kid' s nappies freaking white man's nanny.
you black disgrace.

jp philips:

@ omo tier
the post was meant for Nigerians in Nigeria not Nigerians in the Uk working as genitors, cab drivers, security guards, door men and mortuary attendants.

it is a message for Nigerians that wish to make your motherland a better place so that your likes will come back from exile.

Now quickly go and change that kid' s nappies freaking white man's nanny.
you black disgrace.

Ha ha, I bet your Minister for Trade and Investment ( Mr. Olusegun Aganga) was also working as genitor, cab driver, security guard, door men and mortuary attendant!
COWARD, You want to come across as intelligent and grasping but you could not put up an article that is coherent, truthful and factual. The rubbish you put up there can only be consumed by those inbreed of the Nigerian Education System GEJ has offered your likes

Need I say get lost to the dustbin of History?, And FYI, Several Nigerian technocrats, Engineers, Adminstrators abound here, and they are making a difference to both Nigerian Economy and the UK Economy. I bet if you have managed to buy your parents a 'living hope' in your entire life

Omo_Tier1:
Quote from: jp philips on Today at 08:01:42 PM

@ omo tier
the post was meant for Nigerians in Nigeria not Nigerians in the Uk working as genitors, cab drivers, security guards, door men and mortuary attendants.

it is a message for Nigerians that wish to make your motherland a better place so that your likes will come back from exile.

Now quickly go and change that kid' s nappies freaking white man's nanny.
you black disgrace.

Ha ha,  I bet your Minister for Trade and Investment ( Mr. Olusegun Aganga) was also working as genitor, cab driver, security guard, door men and mortuary attendant!
COWARD,  You want to come across as intelligent and grasping but you could not put up an article that is coherent, truthful and factual. The rubbish you put up there can only be consumed by those inbreed of the Nigerian Education System GEJ has offered your likes

Need I say get lost to the dustbin of History?,  And FYI,  Several Nigerian technocrats, Engineers, Adminstrators abound here, and they are making a difference to both Nigerian Economy and the UK Economy. I bet if you have managed to buy your parents a 'living hope' in your entire life

Oh his even in the diaspora LWKMD e fit no even get paper may be na aduro e ∂eƔ chop, Abeg go wash dead body

that baby is still crying change the damn dipers omo tier
now if you dont mind I have a youth meeting to attend in prep to our monday street march.
will update you as we progress, pray for us

that baby is still crying change the damn dipers omo tier
now if you dont mind I have a youth meeting to attend in prep to our monday street march.
will update you as we progress, pray for us

The new personal income tax has been signed into law since the past 3 weeks,and I must tell U as a Tax Expert that Nigeria tax system is now really progressive,which means the low income earner now pay less. Personal reliefs have equally been adjusted. To me,the man has good intentions,only that some decision he took are ill-timed. Economically,subsidy removal is also a good economic development tools, but will work well when the leakages of economic growth has gone round.

karl max:

Omo_Tier1:
Quote from: jp philips on Today at 08:01:42 PM

@ omo tier
the post was meant for Nigerians in Nigeria not Nigerians in the Uk working as genitors, cab drivers, security guards, door men and mortuary attendants.

it is a message for Nigerians that wish to make your motherland a better place so that your likes will come back from exile.

Now quickly go and change that kid' s nappies freaking white man's nanny.
you black disgrace.

Ha ha,  I bet your Minister for Trade and Investment ( Mr. Olusegun Aganga) was also working as genitor, cab driver, security guard, door men and mortuary attendant!
COWARD,  You want to come across as intelligent and grasping but you could not put up an article that is coherent, truthful and factual. The rubbish you put up there can only be consumed by those inbreed of the Nigerian Education System GEJ has offered your likes

Need I say get lost to the dustbin of History?,  And FYI,  Several Nigerian technocrats, Engineers, Adminstrators abound here, and they are making a difference to both Nigerian Economy and the UK Economy. I bet if you have managed to buy your parents a 'living hope' in your entire life

Oh his even in the diaspora LWKMD e fit no even get paper may be na aduro e ∂eƔ chop,  Abeg go wash dead body

Go check Arik Flight from LHR to LoS to LHR,  departure at 10.05pm & 11.05am on the 27th,  you would find my details there,  COWARD!,  In your shallow mind,  you think all Nigerians in diaspora do 'elementry' jobs,  but let me enlighten you abit,  Some of us are Directors, Managers, and we run organisations with branches in 4 continents with over #2000 people!, another COWARD roaming the webspace!,  beaf has given birth,  hurrayyy!!!!

goksonjay:

The new personal income tax has been signed into law since the past 3 weeks,and I must tell U as a Tax Expert that Nigeria tax system is now really progressive,which means the low income earner now pay less. Personal reliefs have equally been adjusted. To me,the man has good intentions,only that some decision he took are ill-timed. Economically,subsidy removal is also a good economic development tools, but will work well when the leakages of economic growth has gone round.

Exactly ill timed and dictatorial. PITA was seen by many as one of those long overdue measures that the FG has gotten a handle on and was making step to turn it around to favour the masses. But let it also be said that PITA started under obasanjo, so lets not play subsioy removal 'pallative' measure politcs with it! PITA has been in the works for over 3 years,

goksonjay:
The new personal income tax has been signed into law since the past 3 weeks,and I must tell U as a Tax Expert that Nigeria tax system is now really progressive,which means the low income earner now pay less. Personal reliefs have equally been adjusted. To me,the man has good intentions,only that some decision he took are ill-timed. Economically,subsidy removal is also a good economic development tools, but will work well when the leakages of economic growth has gone round.

Ʊ ∂eƔ mind the people wey ∂eƔ Ơ̴̴͡.̮Ơ̴̴̴͡ only 1600 buses, Nigerians are too lazy!! Why becos everything is subsidized for us even Pilgrimage,