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Windfall Tax: Policy Is A Win-Win For Social Good — Bismark Rewane

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2 weeks ago

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Renowned Economist and Managing Director/Chief Executive Officer of Financial Derivatives Company Limited (FDC), Mr. Bismarck Rewane, has thrown his weight behind the Windfall Tax on financial institutions by the Federal Government, describing the policy as a win-win situation, and one aimed at fostering social good and entrenching equitable distribution of resources for Nigerians.

Windfall taxes are designed to capture extraordinary profits that arise from unexpected economic events. In Nigeria’s case, these profits have largely resulted from the recent naira devaluation, which has significantly benefited banks. Therefore, a nuanced understanding of this concept is critical to the overall conversations around the policy and its implementation.

He stated this during an on-air interview on the topic: ‘Understanding the Workings of the Windfall Tax Policy in Nigeria’, on ‘Business Nigeria’, a business and economy focused programme on TVC, on Wednesday August 28, 2024.

The Windfall Tax, Rewane said, “would come up with the concept of a joint venture where the government has part of it, and the private taxpayer has part of it. So, in all this model, everybody is in what I call a ‘win-win’ situation”.

The FDC CEO made references from his presentation titled: ‘Windfall Tax: Incentive or Penalty?’ noting that as citizens, the government wants you to have a say in how the tax is spent and administered. “So, we want a swap. Rather than pay us cash tax, we give you a road to zero, right? And that road is ours. We build it and people will see it and we get quite a good capital out of it. We get economic capital, and everybody sees it as part of your social responsibility. You would have an asset with benefits for people.”

Rewane pointed out that traditionally, government activities are funded by taxes and other forms of revenue including levies, rates, and others, and “this factor in companies or sectors making extraordinary income. The higher the tax revenue, the greater the ability of the government to fund its goals and its activities for social good”.

According to him, there are four elements that constitute a nation’s GDP, namely: government expenditure, investments, consumer income or aggregate consumption, and net exports. In the same way, he said, taxes are subject to four principles. Firstly, a tax must generate revenue. Secondly, it must be easy to administer, must be neutral, and must be equitable.

Rewane argued that the Windfall Tax policy buttresses the Robin Hood philosophy of the rich paying more than the poor or the socio-economically vulnerable. “Assets provides an impetus for growth. The assets belong to the government. But it is funded on the profits of the taxpayer. But the most interesting alternative is to have the asset belong to the taxpayer”, he said.

Rewane pointed out that the windfall tax is not a Nigeria-specific tax policy, but one that has been adopted by many other nations. He cited the examples of countries like the United Kingdom which had a 35% windfall tax on oil and gas companies in 2022, and Portugal which had 13% windfall tax on energy companies and food retailers to reduce inflation and boost renewable energy investment. Czech Republic on their part used 60% of its Windfall Tax to subsidize energy costs and support social assistance programmes, while Germany channelled 90% of its tax with proceeds to support people by putting a break on energy tariffs.

Rewane explains that Nigeria’s tax-to-GDP ratio is currently 9.4 percent, lower than that of Ghana (12.3 percent) and South Africa (26 percent). This discrepancy is partly due to a lack of confidence in the government’s ability to deploy tax revenues effectively. He argues that if taxpayers believe their money is being well-spent on public goods and services, they are more likely to comply with tax policies.

According to Rewane, the discussion around the windfall taxes falls within the broader context of Nigeria’s economic goals. The government aims to achieve a one trillion-dollar economy by 2028, with an average growth rate of 5 to 6 percent. To reach these targets, it is essential to balance revenue generation with investment and consumption, ensuring that all elements of the economy are working together to drive growth.

Rewane urged for more understanding on the part of the citizens and organised private sector, saying that the government, by its mandate, has a major role to play in the economic development of the country and is not oblivious of the fact that some people are making extraordinary gains and that these gains need to be distributed evenly for common social good.

“Our concern here should be: How can we make this more efficient, so it becomes a win-win? The government wins, the people win, and the taxpayer being the public entity that made the primary profit also wins”, he said.

A critical aspect of Rewane’s argument is the importance of trust between the government and taxpayers. He asserts that for any tax policy to be effective, there must be a perception that the revenue collected is being used efficiently and transparently. This is especially true in Nigeria, where public skepticism about government spending is high.

The revered economist also spoke on the responsibilities and expectations of institutions to taxes, saying, “We have a moral and social responsibility to pay our taxes, but that does not include exploitation or extortion. We don’t want that to happen. The greatest incentive for people to pay taxes is that people can see that the taxes they have paid has turned into material benefits for them. They can see the roads, they can feel the power supply, they can see the water, and they can see it’s for social good. So, that’s the litmus test for getting people to pay tax”.

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BIG STORY

Sanwo-Olu Congratulates His Deputy, Obafemi Hazmat At 60

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8 hours ago

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September 18, 2024

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  • Says DG is a trusted, committed partner

 

Lagos State Governor, Mr. Babajide Sanwo-Olu, has congratulated his deputy, Dr. Obafemi Hamzat, on his Diamond birthday, describing him as “a trusted, committed and dedicated partner.”

He saidDr. Obafemi Hazmat, who clocks 60 on Thursday, is a brother, friend and partner in the Greater Lagos agenda.

The Governor noted that the cordial relationship between him and his deputy has led to good governance and the delivery of dividends of democracy to millions of Lagosians in the last five years.

Dr. Hazmat, a former Lagos State Commissioner for Science and Technology, as well as Commissioner for Works during former Governors Bola Tinubu and Babatunde Fashola administrations, will clock 60 tomorrow, Thursday, September 19.

Governor Sanwo-Olu, in a congratulatory message issued by his Special Adviser on Media and Publicity, Mr. Gboyega Akosile, on Wednesday, praised Dr. Hamzat for his long years of dedicated and meritorious service to Lagos State and Nigeria.

Sanwo-Olu, further described Dr. Hazmat as a genius, team player and brilliant administrator, saying that the Deputy Governor’s supportive and positive contributions are evident in the many achievements so far recorded by the current administration.

He said: “On behalf of my family, the government, and the people of Lagos State, as well as the Governance Advisory Council (GAC), leaders and members of the All Progressives Congress (APC), I celebrate my dear friend and brother on his 60th birthday.

“Dr. Obafemi Hazmat, who I have known for over two decades, is a genius, administrator per excellence, seasoned technocrat and politician. He is a reliable, hardworking, dependable, supportive, trustworthy and committed partner in the Greater Lagos agenda of our administration.

“The deputy governor’s Diamond birthday is worth celebrating because of his immeasurable contributions to Lagos State and Nigeria, having served passionately in different private and public offices locally and internationally for over three decades.

“As Dr. Obafemi Hazmat joins the league of sexagenarians, I pray that God will increase his good health to enable him to render more service to humanity, Lagos State and Nigeria.”

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BIG STORY

Adron Games 2024 Unveiled: ‘Fit To Be The Biggest’ With Sports Icons Daniel Amokachi And Mutiu Adepoju Leading The Charge

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9 hours ago

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September 18, 2024

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Adron Homes & Properties is excited to announce the official unveiling of the 7th edition of the Adron Games, tagged “Fit to Be the Biggest”. The 2024 edition is set to take place at the renowned Lekan Salami Stadium, Adamasingba, Ibadan, from November 29th-30th, 2024, marking the second time the city of Ibadan will host the prestigious sporting event.

The Adron Games is a national platform designed to promote physical fitness, wellness, and community engagement through sports. Having previously held successful editions in Ogun and Lagos states, the 2024 edition is expected to attract over 10,000 athletes and fitness enthusiasts from across Nigeria.

The theme of this year’s Adron Games, “Fit to be the Biggest”, perfectly captures the spirit and ambition of the event. It signifies both the physical and metaphorical journey to greatness, where athletes, fitness enthusiasts, and even spectators are encouraged to embrace the challenge of becoming their best selves, physically, mentally, and competitively.

The theme also promotes the idea that fitness is essential to achieving greatness, whether through competitive sports or in everyday life. It motivates participants to push their boundaries and excel, whether on the field, court, or track, and ultimately reminds them that the journey toward fitness and excellence never stops.

This year’s games will feature a wide array of sporting disciplines, including Football, Basketball, Volleyball, Athletics, Table Tennis, Snooker, Shot Put, Long Jump, E-sports, and the fan-favorite Tug of War.

In a special highlight, Nigerian football legends Daniel Amokachi and Mutiu Adepoju have been announced as the official ambassadors of the event. Both are renowned for their contributions to Nigerian football and are expected to inspire athletes and spectators alike with their presence.

Key Event Highlights:

• Event Dates: November 29th-30th, 2024

• Venue: Lekan Salami Stadium, Adamasingba, Ibadan

• Ambassadors: Daniel Amokachi, Mutiu Adepoju, Vanessa Jones and MC Relax

• Sporting Events: Football, Basketball, Volleyball, Athletics, Table Tennis, Snooker, Shot Put, Long Jump, E-sports, and Tug of War

• Special Guests: Sports icons, fitness personalities, and celebrity appearances

• Participants: Over 10,000 athletes and fitness enthusiasts

• Prizes: Cash prizes, trophies, and awards for winners in various categories

Speaking at the unveiling, Daniel Amokachi emphasized the importance of corporate sponsorship in fostering young Nigerian talents, praising Adron Homes for their commitment to promoting sports.

He said “Sports in Nigeria need more support from businesses and brands to help discover and nurture talents among our youth. Organizations like Adron Homes, through their consistent support of sports, are boosting Nigeria’s global sports performance,” Amokachi said.

Meanwhile, Mutiu Adepoju lauded the unifying and transformative power of sports and commended Aare Adetola Emmanuelking, Group Managing Director of Adron Homes, for his unwavering commitment to organizing this event annually. “Sports is a powerful tool for unity and fitness, both physically and mentally. I commend Aare Adetola Emmanuelking for his continuous support of sports by organizing this prestigious event. His dedication is vital to the development of sports and the empowerment of youth in Nigeria,” Adepoju remarked.

it will be recalled that, Adron Games is an annual sporting event organized by Adron Homes & Properties to promote physical fitness, wellness, and community engagement through sports. Since its inception, the event has grown into a major national platform, bringing together thousands of athletes, corporate teams, and fitness enthusiasts in the spirit of competition and fun.

Adron Homes, through this sporting event, encourages everyone to view fitness and sports as key to unlocking personal and communal growth, building healthier lifestyles, and fostering unity across different regions, backgrounds, and demographics. “Fit to be the Biggest” represents not only the size and scope of the event but also the opportunity for everyone involved to elevate themselves and inspire others through the power of sport.

For more information, sponsorship, vendor registration and inquiries, please contact: Abiodun 08138432335.

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BIG STORY

BREAKING: Yahaya Bello Not In EFCC Custody — Spokesman

Published

10 hours ago

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September 18, 2024

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The Economic and Financial Crimes Commission has said that the former governor of Kogi State, Yahaya Bello, is not in their custody.

The commission, in a statement on Wednesday by its spokesperson, Dele Oyewale, said that Bello is still wanted and has an outstanding arrest warrant.

He said, “Media reports today that a former Governor of Kogi State, Mr. Yahaya Bello is in the holding facility of the Economic and Financial Crimes Commission, EFCC, is incorrect. The Commission wishes to state that Bello is not in its custody.

“Bello, already declared wanted by the Commission for alleged N80.2billion money laundering charges, remains wanted with a subsisting warrant for his arrest.”

 

More to come…

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