THE TAXAIDER NEWSLETTER VOL 4, ISSUE 2 (FEBRUARY 2022)

First Thoughts: The World Is In Flames, And It’s Tempting To Scream!

Week after week, we’re presented with the evidence of a fast-sinking world: the climate-change crisis, our fragile economies, a pandemic that has killed and infected a lot of people, and now Russia is invading Ukraine! So yes, I understand why you’d want to scream. But here’s the thing: Screaming isn’t working. We have been screaming for decades about all these kinds of stuff, but the world is still falling apart.

After months of escalating tension, Russia and Ukraine are on the brink of war. With the Russian troops already in the eastern parts of Ukraine, some parts of Kyiv, and the Black Sea port cities of Odesa and Mariupol, the Ukrainian government has put its military on high alert.

Aside from the loss of lives and properties that would be catastrophic if a full-scale war blows out, the conflict could also have serious consequences for Europe and the world economy. Investors are also justifiably worried about the consequences for the global economy. If Russian and Ukrainian forces remain on a war footing, it would be an extremely tense situation in Europe, with a risk of armed conflict that could lead to a full-scale war, involving Russia, Ukraine, and NATO. Even without this worst-case scenario, there will be significant economic implications for Russia and the EU.

Indeed, there are many complex issues facing us all today. Let’s focus on those and not on war, conflict, and violence! The world cannot afford another war. Peace!

In this issue, we discuss:

  1. Bad Debts And Its Provisions In Line With FIRS Practices
  2. Finance Act 2021- Implications Of The Finance Act On The Educational Institutions 
  3. Why You Should Take Tax Planning Seriously
  4. Company Income Tax (CIT) In Nigeria: Things You Need To Know

Nigeria’s Gross Domestic Product (GDP) grew by 3.98% year-on-year in real terms in the fourth quarter of 2021, indicating a sustained growth for the fifth quarter since the recession witnessed in 2020. This is according to the recently released GDP report by the National Bureau of Statistics (NBS). The Q4 2021 growth rate was higher than the 0.11% growth rate recorded in Q4 2020 by 3.87% points and lower than 4.03% recorded in Q3 2021 by 0.05% points. Read more HERE

The consumer price index, which measures the rate of increase in the price of goods and services, rose to 15.60 percent year-on-year in January 2022. This is 0.87 percent points lower than the rate recorded in January 2021 (16.47) percent. The National Bureau of Statistics (NBS) said this in its Consumer Price Index (CPI) report for January 2022 . According to the report, increases were recorded in all COICOP divisions that yielded the headline index. Read more HERE

The International Monetary Fund (IMF) says the expansion of eNaira for cross-border transfers and agency banking may boost money-laundering/financing of terrorism.

The Bretton Woods institution said this in its recently released staff country report titled ‘Nigeria: 2021 Article IV Consultation’. In October 2021, the Central Bank of Nigeria (CBNunveiled the country’s first Central Bank Digital Currency (CBDC) known as the eNaira. The IMF said the digital currency is envisaged to bring multiple benefits, including increased financial inclusion, facilitation of remittances, reduced informality and illegal activities as eNaira transactions are in principle fully traceable. Read more HERE

The Central Bank of Nigeria(CBN) has introduced a new initiative to generate $200 billion from non-oil exports and increase foreign reserves. The initiative ‘Race to $200 billion in FX Repatriation (RT200FX) Programme’ will stimulate non-oil exports with a $200 billion FX income target in the next three to five years, according to the apex bank. Godwin Emefiele, CBN governor, disclosed this at a press conference in Abuja after consultation with the Bankers’ Committee. 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

EK (e.abdulrahman@taxaide.com.ng)

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