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Suraj Oyewale (Sir Jarus)

@Jarushub

14 Sep

From the Brown Roofs of Ogbomoso to the Skyscrapers of Dubai, then to ....

I saw a younger friend of mine Facebook-check into Dubai this evening and I went into our private channel of communication to ask him whether he had taken the job he sought my advice on few months ago.

The answer was in the affirmative. He resumed early this month in a Private Equity (PE) firm in Dubai, one of the top financial centers of the world. For the uninitiated, PE is one of the most lucrative jobs in the world of finance, nay in any field

He had sought my advice in October last year (2019) on whether to choose that Dubai-based PE firm he was talking to or stay where he was (another top finance firm in Nigeria with international capital backing) and move to Canada later this year to resume at a top Canadian

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Suraj Oyewale (Sir Jarus)

@Jarushub

10 Sep

I have seen this being brandished as proof that NNPC cooked books. Insufficient.

There is nothing wrong with impairment reversal. In accounting, a company is required to test its assets for recoverability at a certain interval or when certain economic activities relevant to

it (eg oil price in the case of an oil company) significantly change.

When the carrying value of the asset is higher than the recoverable value, the difference is booked as an impairment expense (not cash pls) to reduce the value of the asset in the balance sheet.

The corresponding entry is booked into P&L (that statement you're seeing up here) to reduce income.

In other words, when a company books an impairment, it reduces its asset value and reduces its profits (or increases it loss). Expense reduces profit (or increases loss),remember

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Suraj Oyewale (Sir Jarus)

@Jarushub

10 Sep

Summary of VAT decentralization

Law (constitutionality) ✅
Politics (federalism) ✅
Public finance ✅
Economics (ease of doing business) ❎

My recommendation as a pro-business analyst
- Don't decentralize VAT collection
- Amend the constitution to correct the legal oversight
- FG & states should renegotiate VAT revenue sharing eg states that don't allow alcohol consumption should not share in VAT from alcohol

Alternatively, VAT should be canceled and replaced with sales tax and collected at state level. US that operates a federal system like us does not have VAT, rather it has sales tax at state level. UK that has VAT is not a federal state. This problem doesn't arise in the UK.

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Suraj Oyewale (Sir Jarus)

@Jarushub

9 Sep

https://twitter.com/jideduro/status/1435914910131699715

That is why it is value added tax. The supermarket has added "value" to it, that is why they are not selling at the price they bought it from Nestle. Ultimately, you as final consumer will be the bearer of the tax. This is how it works.

Let's use Milo as example. Nestle imports

https://twitter.com/jideduro/status/1435914910131699715

cocoa from Cote D'Ivoire and pays import VAT. Let's say the unit cost of purchase is N50, Nestle pays VAT of N3.75 on the raw material purchase. As the consumer (ie user) of the cocoa, it suffered N4 VAT (payable to FGN being import VAT). It processes (adds value to the cocoa)

to become Milo and sells at N70. The buyer of the Milo (say distributor) pays N70 and VAT of N5.25 to Nestle. Nestle recovers the N3.75 VAT it paid on its input from the N5.25 it collects on its output (value added = output value - input value) and pays the N1.75 diff

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Suraj Oyewale (Sir Jarus)

@Jarushub

9 Sep

I've been inundated with requests to comment on this VAT debacle

Not sure I hav much to add as I have seen enough comments here that exhaustively dealt with it.

The issue has 3 aspects

- Law (constitution vs VAT Act)
- Public finance (fate of states)
- Politics (federalism)

I can't comment on the Law part as I'm not a lawyer but all indications seem to point to invalidity of VAT Act impose VAT. And this is why Rivers keep winning in courts. I don't know what magic FIRS lawyers want to pull to win in higher courts but we wait.

On public finance and politics, many analyses have been flying around which appear to make sense to me. But there is no need to rehash this.

But as a tax professional, I will personally prefer that FIRS continue to handle VAT. I have dealt with states and federal tax

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Suraj Oyewale (Sir Jarus)

@Jarushub

7 Sep

Memories of my First Day in Corporate Lagos (a pre-NYSC job in an investment management firm in VI)

Very strange to me. That was my first exposure to corporate Lagos as a fresh graduate. The environment looked too "artificial" with everyone speaking fonee.

Being someone that was raised in ilu oke (countryside), I was nervous on how to fit into the environment. I was shown around by an HR lady. My system was set up. I was given some materials to read. One or two persons in the department came to talk to me about the department.

During lunchtime, I was shown the lunch room. Free lunch. Sumptuous varieties. As if that not enough, dessert was served after lunch. Then in the evening, around 5pm, one lady was going around distributing chocolates and candies.

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