THE TAXAIDER NEWSLETTER VOL 3, ISSUE 6 (June 2021)

First Thoughts: Midway point Reflections

How do you feel when you get to the midway point of a journey? Do you look back and smile when you consider how far in the journey you have come? Do you look back and wish you had not started the journey at all? Do you look forward and visualize the end of the journey and how far you still have to go before arriving at your destination? Do you look forward and smile, knowing that you are no longer where you used to be and if you could have come far enough to the midpoint, you would definitely find strength to get to the finish point?

The midway point of a journey is very important especially because it gives one a good chance to reflect and make evaluations of how much progress or mistakes have been made. It is also an opportunity to start afresh as life presents another canvas to make the relevant impressions on.

In a few days, the year 2021 would hit that midway point and this might just be the time to have that reflection and soul searching, as we look back over the first six months of the year and what has been, and look forward to what we want our next six months to be. This would be the perfect time to visualize what we want our canvas to reveal before we begin to apply our paintbrushes.

In this Issue:

We reproduce some of our top articles in the course of the month as follows:

  • Key Notes in FIRS Audit
  • 10 things you need you need to know about Company Income Tax (CIT).
  • Taxation of non-resident companies in Nigeria
  • Tax Auditing: Understanding its Benefits
  • The G7 Development Finance Institutions (DFIs) have announced it would invest the sum of $80 billion in Africa’s private sector for the next five years, in a bid to support post-pandemic economic growth. This was disclosed in a statement by the African Development Bank (AfDB) on Monday. DFIs made the announcement alongside the International Finance Corporation (IFC) of the AfDB, the European Bank for Reconstruction and Development (EBRD), and the European Investment Bank. Read more HERE.
  • According to the foreign trade in goods statistics released by the National Bureau of Statistics (NBS), the total value of Nigeria’s merchandise trade increased by 7% q/q and 14% y/y to N9.8 trillion in Q1 2021 from N9.1trillion in Q4 2020 and N8.6 trillion in Q1 2020. The rise in total trade during the quarter was driven by an increase in imports (up 15.6% q/q to N6.9 trillion) while exports declined, down 9% q/q to N2.9 trillion in Q1 2021. We note that the total value of imports is the highest recorded in a decade. Consequently, the surge in imports compared with the decline in exports resulted in the sixth consecutive quarter of trade deficit in Q1 2021 (N3.9 trillion) and the highest trade deficit since 2011. Read More HERE.

  • The latest World Bank Nigeria Development Update revealed that rising inflation has pushed an estimated 7 million Nigerians below the poverty line in 2020 alone. According to the report, the rise in inflationary pressure has been driven primarily by surging food prices, as Nigeria’s rate of inflation rose steadily throughout 2020 and reached a four-year high in March 2021.

Nigeria’s headline inflation rate rose from 11.98% as of December 2019 to 15.75% at the end of 2020, and currently stands at 18.12% as of April 2021, while food inflation stood at 22.72%. Read more HERE.

Please stay tuned to our TaxThursday bulletins, our website and of course our mobile application, TBook.

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Till Next Time

GB (g.sile@taxaide.com.ng)