Following a discovery by Nigerian social media influencer, Reno Omokri, that South African telecommunication company, MTN makes N2 trillion every year from Nigeria, and repatriates almost all the profit after tax, he has called for economic reconsideration for South African companies, using European nations as a reference.
He made this call on his twitter handle on Wednesday night.
Reno Omokri alleged that foreign companies in South Africa are not allowed to repatriate all their profit made in the country, but the same doesn’t apply to foreign companies in Nigeria.
According to Reno, the limit on repatriated profit comes after a 28% tax payment to be made to the South African government by the companies.
He went on to say that money is leaving Nigeria and strengthening the currency of South Africa, the Rand.
The entire writeup is aimed at urging the government to favour Nigerian businesses in the area of taxation, to give them more advantages over their foreign counterparts.
See full post below:
“Every year, MTN Nigeria Limited makes ₦2 trillion in revenue from Nigeria. That is more money than Nigeria spends on critical infrastructures annually. Almost 100% of MTN Nigeria’s profit after tax is repatriated to South Africa. Please fact-check me. The same is true for DSTV, which makes ₦300 billion annually from Nigeria.
Do you know the massive downward pressure that a combined total of almost $5 billion that MTN, DSTV, and other South African companies repatriate back home to South Africa annually from Nigeria has on the Naira? Think people. Think! That money is leaving Nigeria to support the purchasing power of the South African Rand. Actions have consequences.
Now, how many major Nigerian companies are doing business in South Africa? Please fact-check me again. Under the South African Income Tax Act, South Africa places a 28% tax on foreign companies doing business in their country.
And in addition to the 28% tax you pay, you have limits on how much of your profits you can repatriate to your home country. And even the amount you can repatriate is subject to an additional repatriation tax, different from the initial 28% tax you pay.
Nigerians must stop emoting and start reasoning. We ought to place far higher taxes on South African companies doing business in Nigeria than the taxes paid by Nigerian companies, especially where Nigerian companies are competing with those South African companies. And we should also limit their abilities to repatriate profits from Nigeria to South Africa.
This may be reduced for those South African companies doing business in areas where we have a shortage of local companies with the ability to compete, and for which there is a high need.
That is what Europe, America and Canada are doing to us. Placing serious obstacles on immigrant visas for regular Nigerians, but lowering the bar for Nigerian doctors, nurses, and teachers, because they need those Nigerian professionals due to shortages in their homelands.
What did Christ say in the Gospels?
“From whom do the kings of the earth collect duty and taxes—from their own children or from others?” “From others,” Peter answered. “Then the children are exempt,” Jesus said to him.-Matthew 17:26.
Prophet Muhammad (Sallallahu Alayhi Wasallam) also placed Jizya Tax on foreigners.
And why should we even have MTN in Nigeria when Globacom can provide the same services that MTN provides, and their revenue and profit are circulating in Nigeria? Why?
Our tax regime must work first in favour of Nigerian companies the way South Africa’s tax regime works to favour South African owned businesses.
Nigeria must be run in a businesslike manner.
This is a practice in the European Union, England and the United States. Let me give an example.
The EU, UK, and the US allow African countries to export cocoa and coffee to their domains without much taxes. But if any African country attempts to refine their cocoa into chocolates or their coffee into instant coffee, they get slapped with a heavy import tax.
As a result, and please fact-check this, the whole of Africa, including Nigeria, makes a paltry $2.4 billion from chocolate imports. In comparison, Germany alone makes over €4.5 billion (Euros, not dollars) annually refining and re-exporting cocoa imported from Africa. That is double what the entire African continent makes from her sweat. How is that fair?
That only happens because sub-Saharan African countries, with perhaps the exception of South Africa, do not have reciprocal tax regimes.
The EU, UK, and US are very good at using tariffs and retaliatory actions to promote their own military-industrial complexes. We must also be alive to this and assert ourselves economically.
Let us impose exactly the same taxes that Germany and the EU impose on our cocoa and coffee on Lufthansa. We can spare Siemens because we need them to boost our power infrastructure. They cannot complain. It is economic tit for tat”, Reno wrote on Twitter.
