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Presidential Tax Reforms Committee Moves to Boost BPO Business in Nigeria

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Worried by the dwindling fortune of Business Process Outsourcing (BPO) business in the country, Presidential Fiscal Policy and Tax Reforms Committee has identified the impediments to its growth and moves to remove them to ensure that the country takes a pride place in the sector.

Taiwo Oyedele, chairman of the committee, said at a workshop for journalist in Lagos on Thursday that his committee identified tax structure in the country which hinders international organizations from hiring Nigerians living in the country to work for them.

“Our existing tax structure demands that any company outside of Nigeria that hires Nigerians living in the country to work remotely will be expected to pay tax on the company’s income as well as on the income of the Nigerian working for the company.

“This tax structure has pushed overseas companies away from Nigeria to countries such as India and Philippines that their BPO sector have grown exponentially. With the removal of tax on the company’s income, we have created a level playing ground for BPO business to flourish in the country,” he said.

It would be recalled that Kashifu Inuwa Abdullahi, director general, the National Information Technology Development Agency (NITDA) had put the worth of Business Process Outsourcing (BPO) ecosystem in the country at $285.8Million.

According to Inuwa, “today, Nigeria Outsourcing sector worth $285.8M employing 16,540 Nigerians mostly living in Nigeria and working for companies outside Nigeria.

“We started in 2020 with a strategy and engaged with the Business Process Outsourcing (BPO) to develop the strategy and some of them started operations in the mid of 2020 and we want to expand this because we believe the sector will create more jobs than any other sector in Nigeria”.

Oyedele, added that his committee has proposed a single digit number of 8 taxes to be collected by all the tiers of governments in the country.

“One of the critical challenges facing the tax system in Nigeria is the shockingly high level of non-compliance as a result of low tax morale. Tax Morale is the willingness to comply with taxes and the belief that tax evasion is wrong,” he noted.

He said the principle behind these is to do away with nuisance taxes with very low revenue yield, high cost of collection and ultimate burden on the poor and small businesses.

“Focus on high revenue yielding taxes, that are broad-based and relatively ease to collect. Merge taxes and levies that are imposed on the same or substantially similar tax base. Institutionalize the tax harmonization reform to ensure sustainability,” he stated.

According to him, “the outcomes expected include; Eliminate informal & implicit taxes, harmonise tax administration, rationalize tax incentives, leverage technology and big data, modernise customs administration, simplify compliance, optimise resources and government assets.

Budget better – Restructure the budget (classify items under infrastructure; human capital investment; personnel cost, headcount & productivity; administrative overheads; debt service & sinking funds), fully implemented zero based budgeting, and introduce long term appropriation.

Spend better – Tackle systemic corruption, prioritise spending on basic needs to address multidimensional poverty, restrict borrowing to productive spending and self-financing projects, leverage PPP and equity financing for viable projects, enhance public procurement effectiveness.

Manage better – Leverage technology for revenue, debt, and expenditure management. Adhere to fiscal rules and benchmark with strict penalties for violations. Establish a national fiscal risk framework and processes to prevent, detect, and correct financial infractions.

Report better – Harmonise and standardise reporting, provide transparent and timely information, enhance audit & internal control, administer consequences.

The eight proposed taxes are; Income Tax; Value Added Tax; Property tax; Customs duties; Excise tax; Stamp duties; Special levy and Harmonised levy.


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E-Business

Outdated Tech Holding Back Innovation in Organizations

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A new report by a leading global IT infrastructure and services company, NTT DATA has revealed that 80 per cent of organizations have agreed that inadequate or outdated technology is holding back organizational progress and innovation efforts.

In fact, 94 per cent of C-suite executives believe legacy infrastructure is greatly hindering their business agility.

These findings come from NTT DATA’s inaugural Lifecycle Management Report. The report, which leverages 25 years of data-led insights from NTT DATA, explores the challenges and opportunities that exist for organizations as they navigate infrastructure lifecycle management.

The research was conducted over 2022 and 2023, gathering data from over 248 million active assets across 130 countries and supported with responses from up to 1400 senior technology decision makers.

Lifecycle management is a critical enabler of business success. Unfortunately, rapid modernization, and the proliferation of technology consumption models, coupled with an increasingly complicated and fragmented supplier ecosystem, make it difficult for many organisations to adequately maintain their technology infrastructure in a way that fosters business agility and innovation.

Compounding issues, the report finds that more than two thirds (69%) of currently active hardware (with scheduled last day of support) will no longer be supported by 2027.

According to the report, just 51 per cent of enterprises have fully aligned their technology approach to their business strategy needs, while 71 per cent of organizations say their network assets are mostly ageing or obsolete.

Unfortunately, lifecycle management can also have an even more direct impact on operations. Misaligned lifecycle patterns can result in inappropriate coverage levels, laborintensive renewals, extended incident resolution times, security breaches, and even costly license violations and compliance issues.

Gary Middleton, Vice President of Networking GTM at NTT DATA, said: “Infrastructure lifecycles are a critical part of the IT management process. They represent an opportunity and a challenge for leadership, as effective lifecycles can result in huge business benefits – from increased efficiency to fostering greater innovation. “However, inefficient lifecycle management can equally be a meaningful operational blocker, posing numerous risks to security and business continuity.

“Through the Lifecycle Management Report, our aim is to help organizations enhance their infrastructure lifecycle processes and unlock the huge benefits doing so presents.”

It would be recalled that an earlier report by PwC had indicated that in Africa, the tech-ecosystem had experienced impressive growth and is evolving rapidly.

It noted that there was a high level of optimism about the potential that the continent has to offer by harnessing the strength of its largely young, rapidly growing and technology savvy population.

“Nigeria is one of the continent’s more established startup ecosystems, with firms like Interswitch dating as far back as 2002. “Albeit the growing tech-sector in the Nigerian economy and significant private funding secured by African tech start-ups over the years, the tech sector is grossly underrepresented in the Nigerian capital market “ the report said.

It also highlighter that the future of countries, businesses, and individuals would be more dependent than ever on their adoption of technology, adding that economic vibrancy and wealth creation in developed countries had been associated with technological advancements and digital innovation & transformation.

“Today, most of the companies with the world’s largest market capitalizations are tech companies that generate much of their revenue from the digital ecosystems they created. This is a significant change from the early 2000s to this current time,” the report added.

 


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DisCos’ revenue rose by 17% to N291bn in Q1 2024 – NBS

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National Bureau of Statistics (NBS) has revealed that electricity distribution companies (DisCos) in Nigeria made a total of N291.62 billion in the first quarter (Q1) of 2024.

NBS, in its latest report on electricity for Q1 2024, released on Sunday, June 23 also said there was a decline in electricity supply in the period reviewed.

The revenue by DisCos rose by 17.91 percent compared to the N247.33 billion recorded in Q1 of 2023, the bureau said.

According to the bureau, power supply dropped from 6,432.22 gigawats per hour (Gwh) in Q4 2023 to 5,769.52 (Gwh) in Q1 2024 but on a year-on-year basis, electricity supply decreased by 1.41 percent compared to 5,851.87 (Gwh) reported in Q1 2023, NBS said.

“Revenue collected by the DisCos during the period was N291.62 billion from N294.95 billion in Q4 2023, “the report reads.“On a year-on-year basis, revenue generated in the reference period rose by 17.91% from N247.33 billion recorded in Q1 2023.”

The NBS also said the total number of customers stood at 12.33 million in Q1 — up from 12.12 million in Q4 2023 — representing an increase of 1.78 percent.

“On a year-on-year basis, customer numbers in Q1 2024 rose by 9.47% from 11.27 million reported in Q1 2023,” the bureau said.

“Similarly, metered customers stood at 5.91 million in Q1 2024, indicating a growth of 5.38% from 5.61 million recorded in the preceding quarter.

“On a year-on-year basis, this grew by 11.26% from the figure reported in Q1 2023 which was 5.31 million.”


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NITDA Commits to Deliver NDLF Initiatives Through Innovative Ideas

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In line with the digital literacy campaign of the National Information Technology Development Agency (NITDA), the Director General NITDA Kashifu Inuwa CCIE has said the Agency’s committed to achieving 70% digital literacy level by 2025 through innovative approaches in delivering initiatives, continuous collaborations and stakeholder engagement.

Inuwa made this known while receiving representatives from the Afre.lib Academy led by the Executive Director of Operation Mrs Joice Gomina who were on a visit to the Agency’s Corporate Headquarters in Abuja.

The purpose of the visit was to seek NITDA’s partnership as co-host of Afre.lib Academy’s bootcamps in August; 2024 Tech and Career Expo with the theme “Tech for Earth” in September; to have the DG as a Keynote Speaker and sponsorship support for their Tech Challenge Winners.

He said from the digital literacy perspective “We have three key areas, firstly, is the Formal Education where we are working with the minister of education to review curriculum and infuse all these skills in formal education, but we have a lot to do to achieve that in terms of training the teachers, getting the equipment available for them to use and so on.”

“Sencodly, for those outside the formal education (informal), we have an initiative which we call the Digital Literacy for All where we are working on building an Edtech platform (a learning Management System) where people can learn at their own pace. We are looking at translating it to Nigerian Languages, so that people who cannot read and understand English can do so in their own local languages.”

“We are exploring partnering with the National Youth Service Corp (NYSC) as they are in 774 local government areas, to be onboarding people and making the content as simple as possible. So that anybody who listens or watches these contents can pick something from it. We believe going through the NYSC will help use reach the critical mass we are looking at.”

“Finally, we also have the formal workforce, which is to train people working for the government and private sector because the workforce needs to be digitally literate to increase productivity at work.

Inuwa assured the Academy of the Agency’s full support as both organisation share the same vison of fostering IT development and digital literacy.

“We need to review your curriculum to make sure it aligns with the National Digital Literacy Framework (NDLF).”

He added that NITDA is working to have at least one Innovation Hub per state so that when people learn they can have a place to develop there proof of concept.

He stated that both organisations can work together in the aspect of having tech clubs across schools in the country.

The ED Afre.lib Mrs Gomina said that the Academy’s which is a made up of a team of experts’ passionate educators has seen the gap between young children who are digital natives and their teachers who are still using old methods to prepare them for a future that is constantly evolving.

She said the Academy is working on building a platform where these children will be mentored and given a safe space to explore technology within the ethics of morality.

“We want to reduce that entitlement mentality and increase that mentality of citizenship, responsibility, and showing them that they can contribute to nation building using technology,” she said

She mentioned that some of the activities of the Academy includes, bootcamps for children, summer tech challenges teacher training as she appreciated the Agency for its willingness to support and partner with the Academy.

The Academy did a demo of some of the prototype developed by children who have undergone trainings with them.

 


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