The Sun News

FG plans tax hike for tobacco, marijuana

From Obi Okwe, Abuja

The Minister of Budget and National Planning, Udoma Udo Udoma, yesterday disclosed the Federal Government’s plans to hike taxes paid on tobacco, marijuana and other abused, yet harmful substances to make them commercially unattractive.

Udoma stated this in Abuja at the public presentation of the 2018 Budget proposal.

According to him, government was developing a new technology to ensure better tax collection in the country, as the issue of tax evasion has been dragging the country back economically.

On the 2018 budget proposal, the Minister said the document seeks to continue reflationary policies of the 2016 and 2017 budgets, which helped put the economy back on the path of growth.

He added that the 2018 budget was designed to advance the delivery of the goals of the Nigerian Economic Recovery and Growth Plan (ERGP).

“The highlights of the 2018 Federal Government spending show an estimated spend of N8.61 trillion, which exceeded financial year (FY) 2017 projection by 16 per cent. At N2.01 trillion, debt service is 23 per cent of planned spending (about same as in FY2017).

“Provision to retire maturing bond to local contractors increased by 24 per cent from N177 billion in FY2017 to N220 billion in view of the ambitious plan to liquidate all contractor arrears of the Federal Government going back to several years.

“Recurrent (non-debt) spending is expected to rise by 17 per cent from N2.99 trillion in FY2017 to N3.49 trillion, while capital expenditure (including transfers) is higher by 12 per cent from N2.36 trillion in FY year to N2.65 trillion.

“Overall budget deficit of N2 trillion in the 2018 represents 1.77 per cent of GDP. Project deficit is within threshold stipulated in the Fiscal Responsibility Act (FRA). Budget deficit is to be financed mainly by borrowing N1.699 trillion, which domestic sources account for N850 million and foreign sources N849 billion.

“We must ensure that money derived from the oil sector should be spent on the non-oil sector to revamp other sectors,” he added.

Udoma also disclosed that the Federal Government is set to increase tax rate of tobacco and marijuana companies in a way to restrict the intake of drugs that are harmful.

Also speaking at the event, the Minister of Finance, Mrs. Kemi Adeosun, refuted rumours that the Federal Government had granted tax holidays to some business owners.

She said the government merely granted tax waivers for three years to some companies who were building roads to enable them recoup their investments.

 


 

…Partners foreign investor to revive textile industry

From Uche Usim, Abuja

The Federal Government has opened discussions with some foreign investors to revive the moribund textile industry as part of its efforts to grow the economy and generate employment.

Minister of Finance, Mrs. Kemi Adeosun, held a meeting with Dutch textile and design company, Vlisco Group, in Abuja on Tuesday over its plans to invest in Nigeria’s cotton and textile industry.

At the meeting, the Chief Executive Officer of Vlisco Group, Mr. David Suddens, said the investment would boost growth and jobs in Nigeria across the entire value chain from cotton to fashion.

He said the company was participating across the sector value chain from sourcing of cotton, textile printing, wholesale, retail and e-commerce distribution, garment manufacturing and supporting and training of Nigerian fashion designers.

He said, “Vlisco foresees an end-to-end involvement in the Nigerian textile industry from cotton sourcing to retail. We are expecting this investment to yield benefits for the Nigerian economy in terms of economic diversification and job creation in line with the country’s industrial revolution strategy.

“Vlisco Group’s activities are expected to generate more than 10,000 jobs in Nigeria in the medium term. We also envisage a Vlisco printing factory in Nigeria using Nigerian designs for the Nigerian consumer, retail outlets selling Vlisco products and trained tailors sewing Vlisco fabric into garment.”

Suddens further noted that the group had formed partnership with two spinning and weaving companies based in China and Pakistan to help build the Nigerian cotton textile industry.

“The two partners are very serious industrialists with first class operations in their own countries. Both are prepared to move quickly if Vlisco guarantees the purchase of their output, and if agreement can be reached on the details of the Nigerian operation,” he added.

The two partners, according to him, are expected to start operations with a weaving mill of between 120 and 140 looms, with each mill producing approximately 12 to 15 million metres of cotton fabric annually.

“Once success is established, both partners will integrate backwards into spinning. The first spinning mills will be for 25,000 spindles, producing yarn for approximately 20 million metres of fabric.

“These mills will then be doubled in size to 50,000 spindles and the weaving mills will also be doubled to 240-280 looms for each factory,” the foreign investor explained.

The Minister of Finance, Mrs. Kemi Adeosun, who expressed delight at Vlisco’s proposed investment in the cotton textile industry, said the Federal Government was committed to the revitalisation of the cotton textile industry.

She disclosed that the Government would stimulate and support sustainable value addition along the entire cotton, textile and garment sub-sector in order to create jobs and wealth for Nigerians and enable technology transfer.

She urged the investor to take advantage of the Nigerian Government’s incentives for the cotton, textile and garment sub-sector to expand its brand portfolio in Nigeria.

The Vlisco Group designs, produces and distributes fashion fabrics for the West and Central African market and African consumers in global metropolitan cities.

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