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FIRS to verify Telcos’ taxes with API solution

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The Federal Inland Revenue Service (FIRS) has concluded plans to integrate an Application Programming Interface (API) technology solution, which will verify the accuracy of taxes paid by telecom operators, rather than relying on their account books.

This is part of the Memorandum of Understanding (MoU) which the FIRS signed with the Nigerian Communications Commission (NCC) on Tuesday.

According to a press release signed by Dr Henry Nkemadu, Director of Public Affairs, NCC, the signing ceremony took place on Tuesday in Abuja, with representatives of both agencies present.

The MOU was initiated as part of the FIRS’ efforts to ascertain accuracy and completeness of value-added tax (VAT) elements and other taxes payable in the transactions of telecoms operators.

It authorises the tax agency to integrate an application programming interface (API) technology solution with the systems of telecom Operators for independent verification of the amount of VAT that should be paid by mobile network operators (MNO) rather than relying entirely on the Operators’ books of accounts.

According to the FIRS Executive Chairman and Chief Executive Officer, Muhammad Nami, the MoU is mainly “to ascertain the completeness of tax transactions of mobile service providers to the Federal Government due to the shift of physical businesses to electronic-based business activities”.

Nami noted that the API was developed in-house, and is transaction-based – structured so that the tax agency has a basis for determining the completeness and accuracy of VAT elements in telecoms transactions.”

Prof. Umar Danbatta, the Executive Vice Chairman of NCC, noted during the signing ceremony on Tuesday that the NCC had conducted due diligence and followed due process to understand the import of the MOU before approving it.

“Our concern, as Regulator of the telecoms industry, is that we needed to be sure that it is not another way to tax telecoms Operators, who are already dealing with multiple taxation issues.

“We have also ensured that the integration of the solutions with telcos’ transactions systems will not in any way, impact the cost and quality of service delivery by the Operators to telecoms consumers”, Danbatta assured.

He added further that this new arrangement would not degrade the quality of service delivery to customers, or increase the cost of services.

 

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Leading Mutual Funds in Nigeria by reporting and transparency

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Mutual funds in Nigeria have grown in leaps and bounds, as the NAV Summary Report from the Securities and Exchange Commission, (SEC) obtained a few weeks ago revealed that there are 106 mutual funds in the country with a total asset value of N1.33 trillion.

What is the extent of its Transparency: Transparency is the state of being easily detected or seen through, easily and readily understood  by the investing public i.e the ability of the investor to look through his investment portfolio report or fact sheet and be able to see what the investment manager is doing with his money.

Why it matters to investors: Investors would like to monitor their investment performance, the risks involved as well as what their money is being invested in. In addition, investors would like to know how much they pay by way of fees. Transparency makes that information known.

To the fund managers, transparency is key to mutual fund activities.  Fund managers operate in a competitive market environment and transparency gives them a competitive advantage. A fund manager that discloses information readily, timely, and voluntarily stands to attract investment contributions from investors. It helps to make communication with investors clearer and timely.

Where they stand:

Stanbic IBTC Asset Management Company:

Daily Prices: Stanbic IBTC Asset Management Company has been at the forefront of mutual fund reporting transparency in Nigeria. It has daily fund prices for the 14 funds it manages updated daily on its website and sent to you upon request. Not only are the prices readily available daily, but they are also available on a historical (inception to date) basis.

Factsheets: Prior to 2019, Stanbic IBTC Asset Management Company used to have a monthly fact sheet for each of their funds, but that got changed to a consolidated quarterly report. The quarterly report is released on a timely basis. The beauty of that report is that it tells the investor the risk profile of each fund, the expense ratio, asset allocation by sector, top 3 stock holdings (which is grossly inadequate disclosure) as well as current fund performance juxtaposed with 3- and 5-year performance data. The fact sheet also shows the investor the performance of the benchmark index for each fund.  Other information contained in the fact sheet includes fund size, NAV, initial and subsequent investments as well as fund objectives. The Q1 2020 factsheets are currently on the website.

Annual Financial Reports: In addition to the rendition of the fact sheets as noted above, Stanbic IBTC Asset Management publishes the audited financial statements of all the funds under its management. Although that of 2019 has not been published, that of 2018 has been published.

Vetiva Asset Management Company:

Daily Prices: Vetiva Asset Management Company is the second most transparent fund manager in Nigeria. The daily fund prices are readily available although some times it looks like only the dates change without the actual prices changing. This may have to do with the valuation frequency of the funds.

Factsheets: Vetiva Asset Management Company has a monthly factsheet for its funds. The fact sheet contains most of the information that investors require. It beats Stanbic IBTC as it reports the top 10 holdings, which is better than Stanbic’s 3 top holdings. Like Stanbic, Vetiva Asset Management Company reports the risk profile of its funds but not all, and also reports the gross expense ratio. In addition, it lets investors see the funds’ MTD, QTD, YTD, ITD performance in juxtaposition with the relevant benchmarks. The factsheets used to be timely but as at the time of writing, the latest available is for the end of March 2020, it is likely they fund manager may be changing to quarterly reporting like Stanbic IBTC. Other pertinent information on the fact sheet includes dividend history, NAV, Bloomberg identifier, and lots more.

Lotus Capital Asset Management Company:

Daily Prices: Lotus Capital Asset Management comes next in line on transparency in mutual fund reporting. The fund manager publishes daily mutual fund prices but unlike Stanbic and like Vetiva, historical prices are not readily available. In that case, the prices are available on a get it or lose it basis.

Fact Sheets: Lotus Capital Asset Management publishes its factsheets on a quarterly basis and has published Q1 2020 edition for each of its funds. Though it does not show expense ratio, it shows the management and incentive fee percentages as well as a description of the risk profile of the fund. In terms of returns, the factsheet shows the QTD, YTD and ITD returns. It does show 5 top stock holdings as well as asset allocation by sector.

Annual Financial Reports: In addition to the fact sheets being available quarterly, Lotus Capital Asset Management publishes the audited financial statements of all the funds under its management. And the 2019 audited financial statement has been put on the platform.


Quantum Zenith Asset Management Company:

Daily Prices: Quantum Zenith Asset Management Company has made a lot of changes to its reporting and by so doing has become one of the most transparent in mutual fund reporting. Daily prices are readily available as well as historical prices in a downloadable form.

Factsheets: Quantum Zenith Asset management Company has the funds’ factsheets tucked away on the website The fund manager will be better off making it easier for investors to find the factsheets as its presence is not very evident from the home page.  The fact sheet has most of the required information including top 5 holdings. The beauty of the performance presentation is that it shows whether the fund is out or under perfuming the relevant index and by how much. Information on expense ratio is not provided except for the management fee rate.


United Capital Asset Management Company:

Daily Prices: United Capital Asset Management Company would probably have ranked the first or second fund manager if not for the lack of daily prices. On its web site, the last daily price is dated June 14th, 2019. However, I have been receiving the weekly prices upon request and investors can too.

Factsheets: United Capital Asset Mgt. Ltd publishes a monthly fact sheet, the latest being for the month of May 2020. The factsheet shows the risk profile of the fund, the total expense ratio, as well as MTD and YTD return numbers put side by side with that of the benchmark in addition to a 5-year performance summary.  Unfortunately, it does not contain information on what the funds are invested in but it shows the allocation by asset type.

Others

FSDH is another fund manager that practices or is cognizant of the importance of transparency in fund reporting. The fund manager reports daily prices which can also be downloaded on a historical basis. It also publishes fact sheets. Regrettably, FSDH has been slacking on the timeliness of the fact sheets as the last published ones are for Q4 2019 

FCMB Asset Management is yet another reporting transparency conscious fund. The fund manager ensures that the fund prices are on their website daily. They used to let investors have the funds’ fact sheets but that has stopped as the last one posted was for December 2018

Other Fund Managers:  There are other fund managers that are transparent with regard to daily fund prices like ARM Asset Management, Afrinvest, Chapelhill, FBN, FCMB, and Meristem but the lack of factsheets pushed them out of contention.

In all, the fund industry has come a long way in Nigeria and it continues to evolve, as the regulators tie all the loose ends and fund managers begin to leverage off of the advantages from transparency, my hope is that mutual fund reporting will improve and the investors will be the happier for it.

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Arik Air to resume operations on Wednesday, July 8

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Arik Air has announced that its domestic flights will resume from Wednesday, July 8, 2020.

Chief Executive Officer, Capt. Roy Ilegbodu, announced in a statement that the airline would operate 3 flights from Lagos and Abuja in phase 1 of the re-opening. He also announced that flights to Port Harcourt will begin on July 11 when the airport reopens. Some part of his statement read:

“We are ready to fly our esteemed customers again. All preparations have been made to make flying in this extraordinary period in the world safe and pleasurable.

The airline has put various measures in place, in line with COVID-19 health protocols, as recommended by the World Health Organisation (WHO), International Civil Aviation Organisation (ICAO) and the Federal Government of Nigeria.

Passengers have been assured of their safety and wellbeing at every stage of their flight.

“Arik has worked actively with aviation agencies for an effective re-start of the industry and also ensure that agreed health measures are effectively implemented.”

The CEO then advised that passengers come properly kitted with face masks during the flights.

Arik Air suspended operations on March 27 after the Federal Government closed the airports to contain the spread of COVID-19 in Nigeria.

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FG to resume Third Mainland Bridge

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The Federal Controller of Works in Lagos, Mr Olukayode Popoola, on Monday said consultations were on for another phase of repair works to begin on the Third Mainland Bridge.

Popoola told the News Agency of Nigeria (NAN) that the consultations were towards evolving perfect traffic management architecture.

“We want to do maintenance work on Third Mainland Bridge very soon. Most likely on the 24th. We may close it from 24th of July.

“We are still working out the modalities and when we perfect the traffic management plan we will move to site.

“Everything being expected for the repairs of the bridge arrived the country that is why we want to start the repairs now,’’ he said.

NAN reports that the bridge which has gone through series of rehabilitation works was last shut in August 2018 for a three days investigative maintenance check.

Thereafter, some components needed for completion of repairs were sourced abroad because they were not available locally.

The 11.8km Third Mainland Bridge is the longest of three bridges connecting Lagos Island to the mainland.

The bridge starts from Oworonshoki which is linked to the Apapa-Oshodi Expressway and the Lagos-Ibadan Expressway and ends at the Adeniji Adele Interchange on Lagos Island.

It was constructed in 1990 and was the longest in Africa until 1996 when The 6th October Bridge in Cairo was completed.

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