₦airaland Forum

mikeapollo:
A lot of people will be affected negatively. Paying more tax without any additional benefits.

A lot of people or mostly high earners? Hasn’t it rather reduced the tax for majority of people (mostly the poor)?

Ginalex:
The new one no favour me o

Hmm, you must be amongst the 1% of the 1%. Well done ma.

ppogba:
In one breath you and your likes are never tired of shouting that Tinubu makes noise about the capital market recent bullish run as one of his achievements. In this new breath, he wants to destroy the capital market just as he has destroyed other sectors.

The way the presumably educated and enlightened bad mouth every thing government and Nigeria deserves serious researching into . The less educated are less caustic and way more sensible .

He takes the glory and yet wants to destroy the trophy.

Oga, make good use of your talent well .

Abeg, I don't want to annoy anyone on this particular thread of Nairaland

At the end of the day, I see that it’s mostly about our biases not necessarily about policies and ideology (no matter how enlightened we are). It’s mostly about who we like and we don’t like 😊😆. This is not just a Nigerian thing though, it’s the nature of politics 😊

Streetinvestor2:
This is not what I understood in the new tax law.
I was not told that all are given grace of the first 800k.I was only told u don't pay if u don't earn upto 800k per annum.
The professionals in that field will help out if I am wrong .
U know English is not igbo language which was my first language..lol

If you go to the president’s twitter page, you would see where he posted the formula for calculating tax under the new law a few days ago.

I inputed 840k as gross salary and it calculated the resulting tax as 6000 naira yearly which is 15% of 40k. This is about 33000 naira reduction from the 39,920 naira you currently pay if you earn 840k yearly.

It also gave me comparison of what obtains now and the new law, that is old vs new law for someone receiving 840k gross yearly.

freeman67:
One thing we are not all seeing is that except for the some people employed in private / small businesses earning between 20-60k, by the design of 70k minimum wage nobody is supposed to earn less than 800k. So nobody is exempted. Minimum wage earners earn 840k per annum and by this design are to be taxed so there is no exemption for anyone except for those in the military.

No, you are getting it wrong. If you earn minimum wage (70k monthly), you earn 840k yearly. You would only pay tax on 40k. Your first 800k is tax exempt and the remaining 40k is taxed 15%.

Joyful365:
The Nigeria Tax Act 2024 has been signed into law and it's set to take effect from 2026.

The tax act effectively increases the minimum tax rate for everyone and also increases capital gains tax from 10% to 30%.

The packagers of bulaba will make it seem like balablu has done Nigerians a lot of favour by making certain provisions for low income earners but they'll not tell you that the inflation and increase in price of every good and service in Nigeria has rendered those provisions ineffective against protecting anyone.

The first thing they're already planning to do with the increase in revenue from increased taxes and widened tax net is to increase the salaries and allowances of elected politicians - not increase minimum wage, fix electricity, insecurity and food shortage crisis.

I thought the tax act actually reduced taxes for most people and you are not taxed on your first 800,000 naira (for those earning up to 3 million naira annual salary) and 25 million for SME’s? So I don’t understand the bolded.

Here is a summary of the bill:

“for many individuals and small businesses, the reforms notably reduce tax burdens.
• Low-income earners (≤ ₦800,000 annually) now pay zero personal income tax   .
• Small businesses within the thresholds are fully exempt from key taxes   .
• Essential goods are VAT-zero-rated, which reduces the cost of everyday items; plus, businesses can reclaim input VAT, improving cash flow   .
• Productive sectors and multinationals face stricter taxation, but reforms aim to distribute tax burdens more equitably    .

As a summary, a Reddit user put it succinctly:

“The entire point of the bill isn’t to increase taxes but to widen the tax net … individuals earning under 800,000k … are exempt … it also eliminates VAT on items Nigerians spend most … food and medicine.”

Joyful365:
Your argument is valid and I also mentioned implementation of improved Oronsaye report which would have resulted in mass layoff of fg government workers, living only mostly essential workers who run essential ministries and provide mostly essential public service, eg police, army, navy, teachers, doctors, judges, etc with very strict performance benchmarks and standards... Perform or go home, like in the private sector.

Also remember that it is these low level government employees that are poorly paid that engage or facilitate corrupt deals that leads to billions in losses to everyone. Pay them well and make it clear that they'll lose their valuable job, lose their assets and go to jail for aiding corruption. Imagine paying paper pushers, clerks, security, policemen and other lower grade workers poorly and expecting good results. It cannot happen.


Again, people outside government will still benefit from the increased minimum wage because private sector will now have to pay workers well and find improved ways to get value for what they're paying.

The carelessness of the government is why you see price of most goods and services jumping 200% to 400% while those earning 200k in 2023 are still earning 200k today. The private sector is the slavery headquarters of Nigeria. They fully exploit the unemployment situation to underpay workers and treat treat them poorly...low wages contributes causes low purchasing power, low business patronage and low economic growth.

Paying people poorly is giving them incentive to commit crime - steal, demand bribe, etc. How do you want to judge them when the system is doing everything to keep them poor?

Balablu doesn't know what he's doing. His media team can praise prices of goods coming down but they don't know that it will result to deflation. Falling prices will result to deflation and no company will want to produce when prices are falling, so his best bet now is to increase people's disposable income by increasing minimum wage and lowering tax, especially for low income earners.

Anything less is coded printing of money which will result in more inflation. Add unemployment and Nigeria ends up in stagflationary economy.

If there's no real improvement in the real sector (electricity, agriculture, manufacturing and services), the financial sector (including stock market) will be dragged down into a bear market.

The first step now is improve people's purchasing power but bulaba is planning to reduce it further from January 2026 with more taxes.

The journey still long for Nigerians

More taxes? How?

mikeapollo:
Thanks for this piece
I recall Tinubu himself telling Buhari to print money to use for the budget.

Well you are right. What Tinubu and Buhari had in mind especially after COVID was not executed properly because it seems Buhari allowed Emiefele carry out most of those responsibilities alone which was not his core mandate.

What Tinubu advised during COVID (printing of more money to survive COVID) was necessary and was carried out in most parts of the world during COVID. You don’t get excessive devaluation and inflation simply because you printed, rather you get that when you didn’t print to boost output or support industries.

We printed 22 trillion in 8 years ($50 Billion). How much of it went in to boost the output of the economy in a commensurate mannner? This is partly what led to the spike in inflation and naira devaluation.

If we printed $50 Billion and at least $40 Billion went into the economy to support industries that eventually came out with increased output of that sum, our economy would have expanded with only little inflationary spike. But most of the printing especially in 2022 and 2023 were not for those purposes. They went into paying salaries and supporting recurrent expenditures.

ositadima1:
This is enlightening, brother—may I call you that? But it seems you missed my point, so let me rephrase. Are all local debts denominated in Naira? I don’t think so; I may even have proof of this.

My other questions relate to events like those in the attached excerpts.

Local debts are in naira that’s why they are local. If they were borrowed from within (usually DMO bonds and the likes). What you have in your screenshot is ways and means which I referred to as printing for Government in lay man’s terms. That is also a local debt which has now been securitised. CBN printed 22 trillion naira for Buhari’s Govt in 8 years but the DMO didn’t include it in our total public debt as at 2023. It was securitised by the Tinubu Govt and so it increased the local debt from 30 trillion naira to around 54 trillion naira in 2023.

ositadima1:
Very interesting observation—kudos to you. You know me, I easily get confused, and I have more doubts. I’m sure your data can be corroborated, but is dividing debt into foreign and domestic really the best approach? Wouldn’t it be clearer to divide it by denomination—local currency vs. foreign currency? I think (though I’m not sure) that a dollar debt is the same regardless of whether it’s classified as foreign or local. As usual, my understanding may be wrong, so please enlighten me.

One more doubt: I heard that some debts mature based on contingencies—could that also be reflected there? Sorry for the many questions, but I really enjoy learning from you all.

No problem, I enjoy learning here too. When it comes to local debts, this Government has borrowed so much (around 21 trillion naira) but local debts are less risky because the Government can never run out of naira, the Government literally prints naira but they don’t abuse that power too much else you get a Zimbabwe, Venezuela, Argentina, and even Nigeria (of 2022/2023) who printed way too much at a time. So I think for this reason, it’s good to classify our debts into foreign and local because foreign debts are more risky due to the currency factor and external reserves (offshore) are used for foreign debt servicing mainly.

This Govt has paid some principals or matured debts. They have paid back the Covid loan from the IMF ($3.22 Billion) and would pay back a maturing Eurobond ($1.2 Billion) in November. Most of these principals are not short term and were borrowed over 4 years ago at least.

So from your question, you are trying to seperate net reserves from Gross reserves. Our net reserves according to the CBN 2024 report, grew from $3.99 Billion as at December 2023 to $23.19 Billion as at December 2024. Net reserves are reserves free of all those debts, bank swaps and liabilities you wrote about. So the reserves had $23.19 Billion as at end of 2024 which is about 7 months of import cover (IMF says anything above 6 months is good). The net reserves may have grown further this year but we may have to wait for CBN report by end of the year to officially confirm this.

ositadima1:
Our astute GeneralDae said that rising treasury levels are a good sign. You people are the best, but I still have my doubts.

Is it possible for treasuries to rise alongside increasing debts? If we consider debt per treasury—similar to how Papa Ema likes to evaluate stocks (debt/equity) when buying—would that give us a clearer perspective?

I feel (though I’m not entirely sure, since these things are sometimes beyond my comprehension) that if treasury reserves are increasing while debts are falling, then maybe we can say the government is doing a great job.

How much foreign debt has this Govt added since 2023? Not up to $3 Billion.

We are currently at $45 Billion from $43 Billion on May 2023.

At thesame time the FX reserve has grown from around $35 Billion on May 2023 to $41 Billion today.

mikeapollo:
My friend, I am not in support of the reckless devaluation. Try and read from the beginning to understand the discussions better.
My point is that is it would better to ban importation of some non-essential items to reduce dollar demand, instead of devaluing the naira sharply the way it was done.
Some people were spreading some fantasy ideas about devaluation and subsidizing the dollar, and I made them understand that another reason the govt did that reckless and irresponsible devaluation was for them to get more naira revenue (from exports), partly on the budget (and possibly to loot in corrupt deals e.g. the opaque Lagos-Calabar road contract), even though we are not feeling any tangible benefits from the increased revenue in the hands of govt.
So try and get the genesis

But weren’t 47 items already banned by Emiefele at that time?

Resurgent2016:
Wait till after the loan repayment due in Nov. If Naira holds steady past that date, the only thing that threatens FX will be election.

True but with rising reserves (and possibly rising net reserves), I don’t think that loan would be so much of a problem in the FX market come November (if the reserves keep rising).

GeeKudi:
What would you have done differently at the time he took over? Majority of Nigerians voted for the those immediate decisions he took when he took over. They endorsed those decisions by giving majority votes to all candidates who campaigned on those points. Candidates like Sowore etc who campaigned agaisnt those steps got little to no vote.
We can play politics of "he is not my candidate and so I must always antagonize him" but on a forum of supposedly enlightened folks like this, one who expect some truthful submissions devoid of such partisanship. Tinubu has shown leadership, he has demonstrated uncommon courage and put his political career on the line to prevent Nigeria from going down. Personally, I have no reason to look for any other person to vote for.

Exactly. This is where we were as at September 2023 when the naira was approaching over 1000/$ for the first time.
There was real scarcity of forex for businesses and we were going down already such that letters of credit for imports were already been rejected. We were thinking of selling our stakes in NLNG to raise $10 Billion at the time but that would have been tricky.
We needed to convince investors that monies trapped in Billions of dollars due to FX backlogs would be paid back in order to bring back FPI’s which were very low. At this point the FMDQ was getting an average of $30 million a day ( down from the usual $200 million a day). It was a crises and only heavy borrowing ($10 Billion and above) would have steadied the ship if we were to maintain an FX rate below 1000 at that stage.

mikeapollo:
I am not even talking about Nigerian govts alone. All over Africa and developing countries, all the progressive govts. do gradual, piece-meal, phased devaluation in order to be able to manage the dislocations. There is no country that did what the man in Abuja did (reckless floating and subsidy removal that has been able to recover and achieve purchase power parity with the dollar, as the earlier OP mentioned. It will not happen.
With a weak industrial base, we need to incentivize local producers to produce more. I expected the govt to ban importation of some non-essential items to reduce the pressure on the naira, and then do a gradual, piecemeal management of the exchange rate to avoid the harsh effects of a reckless floatation.

But ban of selected imported items was in
place from 2016 to 2023. It didn’t stop the slide of the naira in those years and only expanded the black market. This selective removal you talk about means little to nothing if your net reserves are low. The only way you can selectively remove is to borrow heavily from IMF like Argentina just did as they selectively removed their peg but they are on net negative reserves.

lionshare:
It's not necessary to strengthen the naira right now; maintaining stability is more important. Forcing appreciation could create instability and reverse recent gains. Sustained stability will, over time, move us closer to purchasing power parity with the dollar and help manage inflation.

I agree. In Abacha’s time, official rate was 22 naira which was fixed by Abacha but the market rate could not obey this because there were international sanctions and the economy was already bad with high inflation.

The parallel market rate continued to widen from that 1994 and moved from that 22 naira to 86 naira as at 1998 (x4 of the bank or official rate). In 1999, the currency was harmonised to reflect market rates and this plunged everything including the GDP in 1999. Inflation continued to bite and we were worse off and much poorer.

The currency continued to move in 2000/2001 from that 90 naira until it got to 130/150. From 2002 with high growth, and good economic reforms which also included clearing of debts, the naira stabilised at that 130/150, the foreign reserves rose significantly and purchasing power began to measure up to that 150 level, GDP also picked up rapidly again.

We’ve been through all these before. Nigerian political and economic history should be studied in detail by our leaders.

Streetinvestor2:
The funny part is they are borrowing left,right and centre to window dress the reserve and be shouting stability of naira.
Why is the naira not appreciating if the growth of this reserve has been organic.

Maybe the CBN is more interested in building reserves as a buffer first before strengthening the naira. Remember, CBN can also buy dollars away from the market rather than allowing it flow and stay in the market organically.

Strong reserves help the Government with foreign debt servicing which means we are very unlikely to default on our debts anytime soon. Ghana defaulted in 2022 because they had weak FX reserves compared to the debt they had to service then. Same goes for Ethiopia, Zambia, Argentina who have all defaulted and ran to the IMF.

To me, rising reserves are very important and one of the most important macro indicators. It means your economy has some kind of buffer against your foreign debt servicing (which usually takes away most of the dollars everyday alongside imports and FPI outflows)

chimex38:
no be lie.
It's part of the campaign

Investigator

Not necessarily campaign. You can check the reserves movement everyday on the CBN website. So it was $62 Billion in ObJ’s time, but declined as he left and into the Yaradua era to $40 Billion. Jonathan declined it even further (despite having very high oil prices) to $28 Billion in 2015. Buhari raised it to $40 Billion in 2017 and even $45 Billion in 2019. After COVID, reserves went down to as low as $35 Billion as at May 2023.
Reserves are simply inflows and outflows. They rise and fall. When they are rising, it means exports, FDI’s and FPI’s or even foreign debt inflow are more than imports, FDI/FPI outflows and foreign debt servicing at that particular timeframe. The stronger the reserves, the stronger the capacity of the CBN to intervene in the FX market to keep the naira where they want it to be or to stabilise it.

Smithkafors:
Always building inferior projects everywhere. See the environment and building. Can he build such as his personal house.

Step up game. Your projects are inferior compared to your exposure.

Bias is a bastard

“SEPLAT ENERGY LIFTS FIRST DOMESTIC COOKING GAS (LPG), BOOSTS NIGERIA’S ENERGY SECURITY

We have achieved another significant milestone in our commitment towards boosting Nigeria’s domestic energy security and sustainability.

The company has successfully completed the first domestic supply of Liquefied Petroleum Gas (LPG) – Butane from the Bonny River Terminal (BRT) in Rivers State, Nigeria”.

chimex38:
$41bn..
Latest update.
https://leadership.ng/analysts-forecast-stronger-naira-as-external-reserves-hit-41bn/

Lol 😂

Racoon:
Those are the kinds of issues that interest and gives him erection

It’s what most accountants are fixated on mostly. While Economists bother more about inflation and value first, accountants are first of all focussed on balancing the books and increasing numbers (revenue). Tinubu needs a seasoned economist as special adviser on economic matters not just Wale Edun.

This ASBA company and other solid mineral firms in Nigeria should list on the NGX na. Make dem dey list these companies too. Na wa oo.


https://www.youtube.com/watch?v=_qSYjv18OGU?si=nCwjbs5pVQzp93hC

ojeysky:
The bolded is news to me, do you have reference please?

Oh they came out in February to confirm by themselves that they are now ready to list and even visited Tinubu and Wale Edun.
In another interview quite recently, the CEO gave the commitment again. I think this is the first time Flutterwave themselves have been serious about listing on the NGX even though they’ve been courted before many years ago.
It seems they also got some commitment from the Government and Galaxybackbone on hosting services in Nigeria.

Agbalowomeri:
I expect a strong pull back between now till November but the bubble will continue in December/January for a final Janet. I go join this final one. Make water no carry me go

I will be off market for 18 months thereafter

The market sef don try

Between now and December 2026, we are hopeful of the listing of Dangote fertiliser, Dangote refinery, and Flutterwave. All of these have the potential to keep the market very green through this period except the election campaigns in late 2026 get very disruptive (which I doubt).

Zagee:
Words of a privileged person, but I don't fault you. There's Argentina for example. But oh well.

Argentina had to secure 20 Billion USD from IMF to bring back confidence to investors in order to stabilise her exchange rate. Reserves are net negative.

Argentina’s peso was floated also from 387 to 1000 and black market got to over 1400 at a time. It had to be floated because the previous Govt was just printing lots of Pesos to maintain the budget while burning the reserves to peg it at 387 officially and borrowing more.

Milei had to sack thousands of civil servants and stop all Government infrastructure projects (Argentina’s infrastructure is already way advanced than that of Nigeria, so Tinubu can’t do that).
I can go on and on about Argentina and we can do Milei vs Tinubu if you want and if it’s not seen by others as derailing.

The CBN plans to boost reserves with gold (most likely gold from local refineries) like Emiefele began to do in 2020 (but hasn’t really taken off well). So Japul could place themselves strategically for this in the near future.

BascoVanVeli:
Esther's 1st game back. Her assist was nice but that goal ehn she did get subbed early. Hope that was just fatigue

https://www.youtube.com/watch?v=vy5TrwVNAIo

Lol most likely fatigue from AWCON.

“ 🇳🇬 new insurance tax law will recapitalize insurance companies in 🇳🇬 to N25 billion for non-life insurance companies, N15 billon for life insurance and N45 billion for reinsurance”

BascoVanVeli:
Michelle Alozie vs North Carolina Courage
She played as a fullback

https://www.youtube.com/watch?v=BwgR9nbJFnM

The club have probably decided to play her as a fullback now.