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Buhari signs $1.4bn deep offshore bill into law

Buhari signs $1.4bn deep offshore bill into law

President Muhammadu Buhari has signed the bill seeking to amend the deep offshore and inland basin production sharing contract (DOIBPSC) act into law.

The bill seeks to amend the act by reviewing the sharing formula to accrue more benefits to the federal government.

Nigeria is projected to earn an additional income of $1.4 billion annually from international oil companies operating in the country if the bill seeking to amend a particular section of the act is passed into law.

Buhari signed the much anticipated law from his residence in the UK where he is on a private visit.

Writing via his Twitter handle, he described the new law as “a landmark moment for Nigeria”.

Although Nigeria signed the first set of PSCs in 1993, while the DOIBPSC was enacted in 1999, failure to review the PSC act has reportedly caused the country to lose about $28 billion.

The amendment of section 16 of the production sharing contract act would generate at least $500 million as additional revenue for the federal government in 2020, and an estimated $1.4 billion as from 2021.

In a separate statement, the presidency quoted Buhari as saying with the new law, Nigeria will now receive its “fair, rightful and equitable share of income from our own natural resources for the first time since 2003″

“All this time Nigeria has failed to secure its equitable share of the proceeds of oil production, for all attempts to amend the law on the distribution of income have failed. That is, until today,” he said.

“Rapid reductions in the cost of exploration, extraction and maintenance of oil fields had occurred over these 25 years, at the same time as sales prices have risen.

“A combination of complicity by Nigerian politicians and feet-dragging by oil companies has, for more than a quarter-century, conspired to keep taxes to the barest minimum above $20 per barrel – even as now the price is some three times the value.

“Today this changes. For the first time under our amended law, 200 million Nigerians will start to receive a fair return on the surfeit of resources of our lands. Increased income will allow for new hospitals, schools, infrastructure and jobs.”

The president added that the amendment signals the beginning of beneficial relationship with oil company partners: “one that benefits all – starting with the Nigerian people”.

Call 0803 239 3958 for free financial consulting advice for your businesses.
Send your accounting articles to blog@skytrendconsulting.com.

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IPPIS: What really is it and why ASUU is afraid of it!




IPPIS: What really is it and why ASUU is afraid of it!

The Federal Government and the Academic Staff Union of Universities have engaged in fierce war of words over the government’s decision to make universities embrace the Integrated Payroll and Personnel Information System.

President Muhammadu Buhari had, during the 2020 budget presentation at the National Assembly on October 8, ordered that all public sector workers must register for the IPPIS to save cost and fight corruption by blocking leakages in the Federal Government’s salary payment structure.

But ASUU had, last week, opposed the President’s directive, saying the IPPIS negated the law of university autonomy.

Here’s what you need to know about the IPPIS and ASUU’s reasons for resisting it.

The IPPIS

• IPPIS Secretariat is a Department under the Office of the Accountant-General of the Federation

• It is responsible for payment of salaries and wages directly to government employee’s bank account with appropriate deductions and remittances of third party payments.

• Such third party payments include the Federal Inland Revenue Service, State Boards of Internal Revenue, National Health Insurance Scheme, National Housing Fund, Pension Fund Administrator, Cooperative Societies, Trade Unions Dues, Association Dues and Bank Loans.

• IPPIS claims that its main aim is to pay accurately and on time within statutory and contractual regulations.

• There are 459 Ministries, Departments and Agencies on IPPIS Platform as at 31st June, 2017.

• The department is responsible for processing and payment of salary to over 300,000 Federal Government Employees across the 459 MDAs.

• IPPIS aim is to enrol into the platform, all Federal Government MDAs that draws personnel cost fund from the Consolidated Revenue Fund.

• Since inception of the IPPIS project in April 2007, the department has saved the Federal Government of Nigeria billions of Naira by eliminating thousands of ghost workers.

Meanwhile the Federal Government says the October deadline it gave all ministries, departments and agencies of government to enrol in IPPIS stands. The Accountant-General of the Federation, Ahmed Idris, describes the ASUU’s opposition to the compulsory migration of all federal government staff to the IPPIS as an “open endorsement of corruption”.

He states: “ASUU opposition to IPPIS is an open endorsement to corruption in the Nigeria University system as the IPPIS platform will not allow employment of workers at will without compliance to due process on employment.”

He notes that the IPPIS, a policy of government for which President Muhammadu Buhari directed that all MDAs drawing their salary from Consolidated Revenue Funds should join by the end of October 2019, was aimed at saving costs and wastages.

The AGF, who said other unions in the universities, had complied, advised ASUU to do same before the deadline. He said: “To meet the deadline of government, the process of enrolment is on-going; we, therefore, urge all university staff to ensure they enrol on to the IPPIS platform.

“It is a known practice all over the world that employees are entitled to their salaries and wages as at when due. That notwithstanding, there is nowhere employees dictate to their employers as to how he or she should be paid as being dictated by ASUU.”

What ASUU says about the IPPIS

• It violates existing laws and autonomy of the university

• It is World Bank-designed exploitative template

• IPPIS does not make provisions for payment of arrears of promotion, study leave allowance, and responsibility allowance, among others

• It is designed to phase out university lecturers above 60 years against the new policy where professors retire at 70 years

• IPPIS is a one-size-fits-all approach tainted with corrupt tendencies

Battle line drawn

Meanwhile, the Federal Government has warned that anyone who fails to register for the IPPIS by October 31 would not be paid.

ASUU fires back: “No pay, no work.”

But the Vice-Chancellor of the University of Ilorin, Prof. Sulyman Abdulkareem, knocked ASUU for rejecting the IPPIS.

The vice-chancellor, during a press conference in the university, supported the Federal Government on the IPPIS.

Abdulkareem said, “ASUU’s logic is not clear to me. I wonder why ASUU is taking a different position after attending a meeting with the representatives of all the five unions in the nation’s university system with the representatives of the Federal Government where they were adequately briefed on the new policy.

“I want to appeal to members of ASUU not to delay the October salary of the staff of federal universities with their action because the new system will not change their salaries. It is only the nomenclature that is changing.”

He explained that with the IPPIS, the Federal Government would maintain the payment of its employees’ salaries without cheating them.

The vice-chancellor stated, “What probably is the fear of many of the academic members of staff is that the system would expose them for not working for the money they earn in their primary place of engagement.”

Call 0803 239 3958 for free financial consulting advice for your businesses.
Send your accounting articles to blog@skytrendconsulting.com.

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A B C of treasury bills: Investing and making good money

A B C of treasury bills: Investing and making good money

What are Treasury Bills?

Treasury bills are guaranteed short-term government debt instruments issued by CBN on their behalf to finance expenditure. There are typically 3 tenures available: 91 days, 182 days or 364 days.

The bills are issued at discounted prices for maturity periods after which the government buys them back at full price.

For example, let’s say you buy a 182-day N200,000 treasury bill at a discounted rate of N180,000. The Federal Government of Nigeria writes an IOU for N200,000 and agrees to pay back in 182 days. You don’t get any monthly interest payments, rather you make your money back when the bond is purchased back from you at full price. In this case the T-Bill pays 11% interest rate (N20,000/N180,000 = 11%) over the 182-day period.

How are Treasury Bills Sold?

Treasury Bills are sold through a bi-weekly auction conducted by the CBN. Buyers are requested to quote bids following which the average minimum bid is selected.

Where can I purchase T-Bills?

T-Bills are sold via commercial banks and official agents such as merchant banks, and sales are open to individuals and corporate investors.

Is there a minimum purchase amount for T-Bills?

It depends on the bank. Some banks offer a minimum of N50,000, while some offer a minimum of N500,000.

How can I buy T-Bills?

First, you will need to complete an application form issued by your bank or an approved discount house such as Kakawa Discount House Ltd. You will need to submit your application early, as most banks are required to submit applications received by the Wednesday before the dates announced by CBN – which you can get on the CBN website or in the dailies. Alternatively, your bank might be able to provide you with notifications ahead of time.

When completing the application form, you will be requested for a discount rate – which is the percentage by which the face value of the bill is discounted by. Current rates in Nigeria are around the 12% – 14% mark. You can request for this rate to either be set by your bank, or specified by you (under the “stop rate” section of the application form). If you do however choose to specify a rate which is significantly higher than what the CBN is prepared to offer, your bid will fail.

Various banks will offer you various stop rates/discount rates, depending on how much you want to invest and how long you want to invest it for so it is a good idea to shop around and not go with the first offer you receive. Do your research and select a bank carefully as people have reported banks offering as low as a 2.4% discount rate. As at October 2015, unverified informal accounts suggest that Firstbank seems to have the best bid rate for a 91 day tenure at 9.5%.

How do I calculate the return on my investment on T-Bills?

It is very easy to calculate the returns on your investment, and how this is paid. If for example you purchase T-Bills worth ₦100,000 at a 10% discount rate, CBN only debits your account of ₦90,000. At the end of the maturity period, you are paid your face value sum of ₦100,000.

Can I sell my T-bills before it matures?

It is possible to sell your T-Bills
before it maturity using the OTC market. Because this is governed by the forces of demand and supply, you might make a loss if you choose to sell them before their maturity date.

How secure are T-Bills?

As T-Bills are based on full faith of the Federal Government of Nigeria, they are considered one of the most secure investments to make. They can also be used as collateral, and are accepted by all banks.

Call 0803 239 3958 for free financial consulting advice for your businesses.
Send your accounting articles to blog@skytrendconsulting.com.

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ENTREPRENEURSHIP: 10 Reasons you should never apply for a job




ENTREPRENEURSHIP: 10 Reasons you should never apply for a job

A lot of people often have the notion that looking for and applying to start a job and getting employed and paid is the next best thing after graduating from higher institution. In fact young graduates have the illusion about the often talked about white collar job which will apparently give you all the “happiness you require” after getting your higher education certificate.

However this article written by Steve Pavlina proves otherwise. He says a job only keeps you in bondage and the income you receive therein are only for dummies.

I read this article over 10 years ago and I have successfully set up two thriving organizations thereafter. For this reason, I want to share with my readers so they too can benefit from it and never allow themselves become slaves to any job master anywhere. I am convinced you will never remain the same after this. Happy reading!

It’s funny that when people reach a certain age, such as after graduating college, they assume it’s time to go out and get a job. But like many things the masses do, just because everyone does it doesn’t mean it’s a good idea. In fact, if you’re reasonably intelligent, getting a job is one of the worst things you can do to support yourself. There are far better ways to make a living than selling yourself into indentured servitude.

Here are some reasons you should do everything in your power to avoid getting a job:

1. Income for dummies
Getting a job and trading your time for money may seem like a good idea. There’s only one problem with it. It’s stupid! It’s the stupidest way you can possibly generate income! This is truly income for dummies.

Why is getting a job so dumb? Because you only get paid when you’re working. Don’t you see a problem with that, or have you been so thoroughly brainwashed into thinking it’s reasonable and intelligent to only earn income when you’re working? Have you never considered that it might be better to be paid even when you’re not working? Who taught you that you could only earn income while working? Some other brainwashed employee perhaps?

Don’t you think your life would be much easier if you got paid while you were eating, sleeping, and playing with the kids too? Why not get paid 24/7? Get paid whether you work or not. Don’t your plants grow even when you aren’t tending to them? Why not your bank account?

Who cares how many hours you work? Only a handful of people on this entire planet care how much time you spend at the office. Most of us won’t even notice whether you work 6 hours a week or 60. But if you have something of value to provide that matters to us, a number of us will be happy to pull out our wallets and pay you for it. We don’t care about your time — we only care enough to pay for the value we receive. Do you really care how long it took me to write this article? Would you pay me twice as much if it took me 6 hours vs. only 3?

Non-dummies often start out on the traditional income for dummies path. So don’t feel bad if you’re just now realizing you’ve been suckered. Non-dummies eventually realize that trading time for money is indeed extremely dumb and that there must be a better way. And of course there is a better way. The key is to de-couple your value from your time.

Smart people build systems that generate income 24/7, especially passive income. This can include starting a business, building a web site, becoming an investor, or generating royalty income from creative work. The system delivers the ongoing value to people and generates income from it, and once it’s in motion, it runs continuously whether you tend to it or not. From that moment on, the bulk of your time can be invested in increasing your income (by refining your system or spawning new ones) instead of merely maintaining your income.

This web site is an example of such a system. At the time of this writing, it generates about $9000 a month in income for me (update: $40,000 a month as of 10/31/06), and it isn’t my only income stream either. I write each article just once (fixed time investment), and people can extract value from them year after year. The web server delivers the value, and other systems (most of which I didn’t even build and don’t even understand) collect income and deposit it automatically into my bank account. It’s not perfectly passive, but I love writing and would do it for free anyway. But of course it cost me a lot of money to launch this business, right? Um, yeah, $9 is an awful lot these days (to register the domain name). Everything after that was profit.

Sure it takes some upfront time and effort to design and implement your own income-generating systems. But you don’t have to reinvent the wheel — feel free to use existing systems like ad networks and affiliate programs. Once you get going, you won’t have to work so many hours to support yourself. Wouldn’t it be nice to be out having dinner with your spouse, knowing that while you’re eating, you’re earning money? If you want to keep working long hours because you enjoy it, go right ahead. If you want to sit around doing nothing, feel free. As long as your system continues delivering value to others, you’ll keep getting paid whether you’re working or not.

Your local bookstore is filled with books containing workable systems others have already designed, tested, and debugged. Nobody is born knowing how to start a business or generate investment income, but you can easily learn it. How long it takes you to figure it out is irrelevant because the time is going to pass anyway. You might as well emerge at some future point as the owner of income-generating systems as opposed to a lifelong wage slave. This isn’t all or nothing. If your system only generates a few hundred dollars a month, that’s a significant step in the right direction.

2. Limited experience
You might think it’s important to get a job to gain experience. But that’s like saying you should play golf to get experience playing golf. You gain experience from living, regardless of whether you have a job or not. A job only gives you experience at that job, but you gain “experience” doing just about anything, so that’s no real benefit at all. Sit around doing nothing for a couple years, and you can call yourself an experienced meditator, philosopher, or politician.

The problem with getting experience from a job is that you usually just repeat the same limited experience over and over. You learn a lot in the beginning and then stagnate. This forces you to miss other experiences that would be much more valuable. And if your limited skill set ever becomes obsolete, then your experience won’t be worth squat. In fact, ask yourself what the experience you’re gaining right now will be worth in 20-30 years. Will your job even exist then?

Consider this. Which experience would you rather gain? The knowledge of how to do a specific job really well — one that you can only monetize by trading your time for money — or the knowledge of how to enjoy financial abundance for the rest of your life without ever needing a job again? Now I don’t know about you, but I’d rather have the latter experience. That seems a lot more useful in the real world, wouldn’t you say?

3. Lifelong domestication
Getting a job is like enrolling in a human domestication program. You learn how to be a good pet.

Look around you. Really look. What do you see? Are these the surroundings of a free human being? Or are you living in a cage for unconscious animals? Have you fallen in love with the color beige?

How’s your obedience training coming along? Does your master reward your good behavior? Do you get disciplined if you fail to obey your master’s commands?

Is there any spark of free will left inside you? Or has your conditioning made you a pet for life?

Humans are not meant to be raised in cages. You poor thing…

4. Too many mouths to feed
Employee income is the most heavily taxed there is. In the USA you can expect that about half your salary will go to taxes. The tax system is designed to disguise how much you’re really giving up because some of those taxes are paid by your employer, and some are deducted from your paycheck. But you can bet that from your employer’s perspective, all of those taxes are considered part of your pay, as well as any other compensation you receive such as benefits. Even the rent for the office space you consume is considered, so you must generate that much more value to cover it. You might feel supported by your corporate environment, but keep in mind that you’re the one paying for it.

Another chunk of your income goes to owners and investors. That’s a lot of mouths to feed.

It isn’t hard to understand why employees pay the most in taxes relative to their income. After all, who has more control over the tax system? Business owners and investors or employees?

You only get paid a fraction of the real value you generate. Your real salary may be more than triple what you’re paid, but most of that money you’ll never see. It goes straight into other people’s pockets.

What a generous person you are!

5. Way too risky
Many employees believe getting a job is the safest and most secure way to support themselves.

Morons.

Social conditioning is amazing. It’s so good it can even make people believe the exact opposite of the truth.

Does putting yourself in a position where someone else can turn off all your income just by saying two words (“You’re fired”) sound like a safe and secure situation to you? Does having only one income stream honestly sound more secure than having 10?

The idea that a job is the most secure way to generate income is just silly. You can’t have security if you don’t have control, and employees have the least control of anyone. If you’re an employee, then your real job title should be professional gambler.

6. Having an evil bovine master
When you run into an idiot in the entrepreneurial world, you can turn around and head the other way. When you run into an idiot in the corporate world, you have to turn around and say, “Sorry, boss.”

Did you know that the word boss comes from the Dutch word baas, which historically means master? Another meaning of the word boss is “a cow or bovine.” And in many video games, the boss is the evil dude that you have to kill at the end of a level.

So if your boss is really your evil bovine master, then what does that make you? Nothing but a turd in the herd.

Who’s your daddy?

7. Begging for money
When you want to increase your income, do you have to sit up and beg your master for more money? Does it feel good to be thrown some extra Scooby Snacks now and then?

Or are you free to decide how much you get paid without needing anyone’s permission but your own?

If you have a business and one customer says “no” to you, you simply say “next.”

8. An inbred social life
Many people treat their jobs as their primary social outlet. They hang out with the same people working in the same field. Such incestuous relations are social dead ends. An exciting day includes deep conversations about the company’s switch from Sparkletts to Arrowhead, the delay of Microsoft’s latest operating system, and the unexpected delivery of more Bic pens. Consider what it would be like to go outside and talk to strangers. Ooooh… scary! Better stay inside where it’s safe.

If one of your co-slaves gets sold to another master, do you lose a friend? If you work in a male-dominated field, does that mean you never get to talk to women above the rank of receptionist? Why not decide for yourself whom to socialize with instead of letting your master decide for you? Believe it or not, there are locations on this planet where free people congregate. Just be wary of those jobless folk — they’re a crazy bunch!

9. Loss of freedom
It takes a lot of effort to tame a human being into an employee. The first thing you have to do is break the human’s independent will. A good way to do this is to give them a weighty policy manual filled with nonsensical rules and regulations. This leads the new employee to become more obedient, fearing that s/he could be disciplined at any minute for something incomprehensible. Thus, the employee will likely conclude it’s safest to simply obey the master’s commands without question. Stir in some office politics for good measure, and we’ve got a freshly minted mind slave.

As part of their obedience training, employees must be taught how to dress, talk, move, and so on. We can’t very well have employees thinking for themselves, now can we? That would ruin everything.

God forbid you should put a plant on your desk when it’s against the company policy. Oh no, it’s the end of the world! Cindy has a plant on her desk! Summon the enforcers! Send Cindy back for another round of sterility training!

Free human beings think such rules and regulations are silly of course. The only policy they need is: “Be smart. Be nice. Do what you love. Have fun.”

10. Becoming a coward
Have you noticed that employed people have an almost endless capacity to whine about problems at their companies? But they don’t really want solutions — they just want to vent and make excuses why it’s all someone else’s fault. It’s as if getting a job somehow drains all the free will out of people and turns them into spineless cowards. If you can’t call your boss a jerk now and then without fear of getting fired, you’re no longer free. You’ve become your master’s property.

When you work around cowards all day long, don’t you think it’s going to rub off on you? Of course it will. It’s only a matter of time before you sacrifice the noblest parts of your humanity on the altar of fear: first courage… then honesty… then honor and integrity… and finally your independent will. You sold your humanity for nothing but an illusion. And now your greatest fear is discovering the truth of what you’ve become.

I don’t care how badly you’ve been beaten down. It is never too late to regain your courage. Never!

Still want a job?
If you’re currently a well-conditioned, well-behaved employee, your most likely reaction to the above will be defensiveness. It’s all part of the conditioning. But consider that if the above didn’t have a grain of truth to it, you wouldn’t have an emotional reaction at all. This is only a reminder of what you already know. You can deny your cage all you want, but the cage is still there. Perhaps this all happened so gradually that you never noticed it until now… like a lobster enjoying a nice warm bath.

If any of this makes you mad, that’s a step in the right direction. Anger is a higher level of consciousness than apathy, so it’s a lot better than being numb all the time. Any emotion — even confusion — is better than apathy. If you work through your feelings instead of repressing them, you’ll soon emerge on the doorstep of courage. And when that happens, you’ll have the will to actually do something about your situation and start living like the powerful human being you were meant to be instead of the domesticated pet you’ve been trained to be.

Happily jobless
What’s the alternative to getting a job? The alternative is to remain happily jobless for life and to generate income through other means. Realize that you earn income by providing value — not time — so find a way to provide your best value to others, and charge a fair price for it. One of the simplest and most accessible ways is to start your own business. Whatever work you’d otherwise do via employment, find a way to provide that same value directly to those who will benefit most from it. It takes a bit more time to get going, but your freedom is easily worth the initial investment of time and energy. Then you can buy your own Scooby Snacks for a change.

And of course everything you learn along the way, you can share with others to generate even more value. So even your mistakes can be monetized.

Call 0803 239 3958 for free financial consulting advice for your businesses.
Send your accounting articles to blog@skytrendconsulting.com.

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New soft drink tax: Its implication for you and your business

New soft drink tax: Its implication for you and your business

Nigerian government is set to introduce soft drink tax in further bid to expand its revenne base. Nigerians and experts have however been reacting.

The Nigeria Employers Consultative Association, (NECA) Lagos Chamber of Commerce and Industry and financial experts say more Nigerians may lose their jobs and some producers of carbonated drinks will likely close shop as a result of poor sale should the Federal Government implement its planned imposition of tax on soft drinks.

Minister of Finance, Budget and National Planning, Zainab Ahmed has said in Washington DC, United States on Thursday on the sidelines of the 2019 annual meetings of the International Monetary Fund/ World Bank that the soft drink tax as well as additional Value Added Tax (VAT) on imported goods was meant to increase the government’s revenue generation.

NECA says the planned tax on non-alcoholic beverages by the Federal Government will kill many businesses in that sector.

Its Director-General, Timothy Olawale, specifically adds that the jobs of about 250,000 people working directly and indirectly in the industry would come under threat.

He said,

“In our considered opinion, reintroduction of excise tax on non-alcoholic beverages should not be the case. With the myriad of taxes and levies already being paid by businesses, the reintroduction of excise in a sector with high price elasticity means that government is desirous of killing businesses in the sector completely.

“Once prices are increased, consumers will push back, resulting in sharp decline in demand. With the planned increase in VAT, the introduction of excise will further burden operators in the sector with the following consequences: low demand leading to unsold products; incomes squeeze on businesses that are already struggling with low margin and massive staff layoff, which will affect over 250,000 direct and indirect employees in the sector among others.”

Call 0803 239 3958 for free financial consulting advice for your businesses.
Send your accounting articles to blog@skytrendconsulting.com.

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Nigeria shares N36.2bn stolen by Abacha to poor citizens

Nigeria shares N36.2bn stolen by Abacha to poor citizens

Mrs Maryam Uwais, Special Adviser to the President on Social Investments, says the Federal Government has been utilizing over N36.2bn ($103.6m) stolen by late Head of State, General Sanni Abacha towards programmes and policies designed to alleviate the plight of poor and vulnerable Nigerians.

She adds that the International Development Association /World Bank credit has also been used for similar purposes.

Delivering an address on Monday at the training on illicit funds, the Presidential aide said from the August 2018 to the October payment cycle, the total amount disbursed from the Abacha loot was $76,538,530 and $27,099,028 from the IDA credit.

Uwais, who said the funds, which were specifically being disbursed to beneficiaries of the National Cash Transfer Programme, a component of the National Social Investment Programme, noted that the gesture was positively changing the fortune of many Nigerians.

She said the decision to distribute the Abacha loot and the IDA funds to poor and vulnerable Nigerians, who were mined from a National Social Register, collated by the National Social Safety Net Coordinating Office, was reached by the Swiss government, the World Bank and the Federal Government.

This, she said, would help to ensure that the funds were well utilised and not diverted to private pockets, as was the case in the past.

Call 0803 239 3958 for free financial consulting advice for your businesses.
Send your accounting articles to blog@skytrendconsulting.com.

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FACT CHECK: Did Banks ask MTN to surcharge phone users for money transfer?





FACT CHECK: Did Banks ask MTN to surcharge phone users for money transfer?

The body of Nigerian Bank Chief Executive Officers, CEOs, has reacted to report that banks directed MTN Nigeria Communication Plc to start charging customers for USSD transactions.

It dismissed the claim from MTN that banks requested that customers should be charged for USSD transactions.

MTN had sent a message to its mobile customers that with effect from October 21, 2019, N4 will be charged on every 20 seconds spent while using USSD access to banking services.

“Yello, Please note that from Oct 21, we will charge N4 per 20 seconds for USSD access to banking services. Thank you,” the message had read.

However, the CEOs insisted that banks never directed MTN to charge customers as claimed by the telecommunication outfit.

A statement jointly signed by the banks CEOs reads:

“Our attention has been drawn to SMS sent on Saturday 19th October by MTN Nigeria Communications PLC (“MTN”) to customers of banks in Nigeria in respect of the above.

“The message states that the banks requested MTN to start charging customers for USSD transactions directly. It also asks customers to contact their banks for more information.

“We wish to state as follows: That the banks did not ask MTN to start charging customers as contained in the text message. The decision on whether, and what amount, to charge a customer for accessing USSD is entirely that of the telco company, in the same way a customer is billed for calls, SMS and data.

“MTN is the only Telco that is yet to implement end-user billing which is the standard practice for customer-initiated transactions. This is despite the fact that the banks, working with the Central Bank of Nigeria (CBN), have engaged MTN over a period of more than one year to try and bring down the cost of USSD to aid financial inclusion.

“That the banks are determined to pursue the National Financial Inclusion Strategy of the Federal Government of Nigeria and will continue to advocate that Telcos identify wholeheartedly with this laudable initiative and implement transparent and low pricing model in the use of USSD access codes.

“We wish to re-iterate that financial transaction charges are regulated by the CBN as stipulated in the Bankers Tariff, and that the charges for financial transactions carried out with banks remain unchanged.”

Call 0803 239 3958 for free financial consulting advice for your businesses.
Send your accounting articles to blog@skytrendconsulting.com.

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USSD banking: Nigerians to be surcharged N4 for every 20 seconds from Oct 21




USSD banking: Nigerians to be surcharged N4 for every 20 seconds from Oct 21

As from October 21st 2019, Nigerian customers and consumers will start paying a surcharge of N4 for every 20 seconds of USSD banking transaction with their phones.

Customers who use unstructured supplementary service data (USSD) channels to access banking services would have to pay new charges from October 21.

Some telecommunications network service providers have sent notices to their customers of the new charge.

“Please note that from Oct 21, we will charge N4 per 20 seconds for USSD access to banking services. Thank you,” a notification sent by MTN to customers read.

Banking services were introduced on USSD channels to ensure easier access to banking services.

Before now, telcos charged customers per USSD session.

This charge differed across networks with the highest being N20 per session.

However, this new charge would mean that customers will be charged N12 for every minute spent on the USSD channel.

Already, the development has elicited reactions from customers and they have taken to social media to express how they feel on social media.

Some customers went as far as sending messages to their banks for further information on the charges.

Some banks have responded saying their charges remain unchanged.

“Our fees and charges on the USSD service remain unchanged and all our services are available,” Access Bank’s Twitter account replied a customer.

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Starting a new business? Take note of these 8 Accounting functions





Starting a new business? Take note of these 8 Accounting functions

It’s very important to roll with a good accounting systems set up when starting your new business. You don’t want to get into the business of making money without accounting for the money by establishing basic accounting system. At the beginning stage, you need to establish a structure that will support your company finances, and help define your financial strategy, as you grow.

Please note that it’s not advisable to attempt to carry out your accounting activities yourself because you do not want to hire an account officer or a financial consultant. What you will lose at the end will be more and it will be penny wise, pounds foolish.

Many growing businesses have tried to do their own accounting themselves. It’s not quite easy and will result to double work once a consultant is now called in, resulting in a greater cost for the business than if they had originally hired a Financial Consultant.

You may want to consider the following activities as you begin your new business:

1. Set up a simple accounting system.

In the beginning, you just need a basic accrual-based accounting system that will cost you very little money. A simple one user sage 50 peachtree accounting solution can be of help here. This would basically help you track your income and expenses, help you eradicate or minimise fraud and error prone transactions, help you make sense of your business activities and interprete the figures behind them. You can call us on 0803 239 3958 for help here.

2. Set up your Chart of Accounts.

I’s not difficult to create a Chart of account for your new business especially if you are a Small and medium scale business (SMEs). This basically contain the ledger account of the different elements of income, expenditure, capital, assets and liabilities. Read more Charts of accounts here.

3. Open a corporate bank account

A business or corporate banking account either for your enterprise or your limited liability company is very advisable. This will enable you corporate income and expenses from personal income and expenses. All cash and transfers for the business MUST first be paid into your bank account and on no consition must cash be taken away from the sales before been deposited. This will help you to have adequate turnover analysis for your business and help you to account for income and expenditure better.

Your bank account will be one of those Charts of account that will be maintained in your accounting software.

4. Keep all records of receipts and invoices.

Ensure you open a file each to keep your sales invoices (goods or services sold), purchase invoices (goods or services purchased), receipts, (goods or services paid for). Each invoice must have a date, invoice number, name of customer or vendor as the case may be and details of the transaction including the units price, units and amount.

5. Do not forget your tax obligations.

You should be very mindful of making remitance to the appropriate inland revenue centres for your VAT which is Value Added Tax, PAYE, Pay As You Earn, Income tax for limited liability company, Consumption tax if you are an hospitality company or restaurant or event centre depending on your state in Nigeria and witholding tax. There are different penalties for defaulting companies which you should not fall victim of. Your financial consultant should be able to advise you on the best way to approach this taxes so as not to be subject to heavy liabilities.

6. Set up a system to collect payments.

Setting up a formalized accounts payable system early helps you to maximize cash flow and create essential financial reports. Work with a professional to identify the best tracking system for your needs. Once the system is set up, you’ll need to enter every expense and establish your invoice AP schedule. Place vendors on net 30 payment terms and work hard to ensure that you always pay your bills on-time and up-front. This will help you to build a reputation for financial stability.

7. Create a payment collection/ Credit control system:

You should have a credit policy that allows a given number of days for your customers to owe you money for goods or services rendered. You should also discuss with your vendors and suppliers to give you some space to keep their goods or enjoy their services and pay later.. this is like an interest free short term loan. Generally your credit policy should be such that have the minimum customer payment period and maximum vendor/supplier payment peiod. This will help to sustain your cash flow.

Call 0803 239 3958 for free financial consulting advice for your businesses.
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CBN exposes banks, customers’ fraudulent deals over loan to deposit ratio





CBN exposes banks, customers’ fraudulent deals over loan to deposit ratio

The Central Bank of Nigeria (CBN) has read the riot act to banks and their customers engaging in shady and fraudulent deals intended to circumvent the loan to deposit ratio policy.

The apex bank had initially set the LDR at 60% before raising it to 65% with a December 2019 deadline.

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While this has led to lower lending rates, some banks are now giving loans to customers who go on to buy treasury bills and other securities at CBN’s open market operations.

But the CBN has instructed banks to reverse the Treasury Bills of customers suspected of conducting such fraudulent deals which is referred to as arbitraging.

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Speaking on the sidelines of the IMF and World Bank meetings in Washington DC, the CBN spokesman, Isaac Okorafor, said banks and customers will be punished and blacklisted for arbitrage.

He said,

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“Our policy is meant to spur manufacturing output. We have started to see banks now marketing their customers for loans including consumer credits and mortgages,” he said.

“Now that these are coming at low rates, manufacturing companies should concentrate on their manufacturing businesses and not on arbitrage. This is how manufacturing output and GDP can be boosted.

“Any customer found arbitraging will be blacklisted, names will be published in the newspapers and the banks will be penalised.”

“Nigerians have been praying for low rates. So if borrowing rates from banks are coming down, companies should take the loan to conduct their manufacturing business and not get involved in arbitrage.

“We are saying banks must lend. So we prescribed the LDR. Now that they are ready to lend and at reasonably low rates not buying securities, people should not borrow to buy securities thereby arbitraging.

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“The economy must see growth induced by higher consumer and manufacturing output. We will be tough on banks and companies that would attempt to game our policies through financial markets arbitrage.”

Call 0803 239 3958 for free financial consulting advice for your businesses.
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