Elvis Onuora & Co (Chartered Accountants)
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NEWSLETTER FOR DECEMBER, 2014


THE DEVALUATION OF NAIRA TO DOLLAR AND HOW IT AFFECTS THE ECONOMY


BACKGROUND:


At the 98th meeting of the Monetary Policy Committee, in November 2014, Naira was devalued from N165.65 to a US Dollar to N174.80 amongst other key decisions.


JUSTIFICATION:


The CBN Governor, Mr. Godwin Emefiele, justifying the devaluation said that the combination of low accruals into the nation's foreign reserves, owing to falling oil prices at the international market; continual depletion of the reserves; and high demand at the foreign exchange market made it difficult for the apex bank to continue to defend the Naira. Official devaluation of the Naira became inevitable as a result of reduction in government revenue from oil production and sales. The devaluation will increase the volume of Naira available to the federation account and to various levels of government to prosecute their local programmes.


EFFECTS OF NAIRA DEVALUATION

Once a currency is devalued, there are negative and positive effects to the economy, especially at the value chain of every nation, but the negative effect supersedes the positive effects.


   The   negative   effect   is   that   it   will increase the     r a t e   o f   i m p o r t a t i o and so many industries will be shut down as they will not afford  to import some raw materials.


  “It  will  also  lead  to  unemployment  and lower the production capacity and thereby bring about inflation as the Growth Domestic Production (GDP) growth rate will fall.


  Government will also loose revenue as a result of the collapse of some businesses in form of Company Income Tax.


  The share prices of some banking stocks will be under pressure, particularly the banks that obtained foreign loan, as they will incure huge exchange loss.


  The  average  Nigerian  employee,  though earning lower wages, is likely to be affected through job cuts and lower wages. But largely, everything depends on how best the economic managers can best handle the situation.


PROCEDURE FOR ADMINISTERING PAYE

The law stipulates that an employer is answerable for PAYE deducted or to be deducted and paid to Government.

Collection of Tax Form 'A' by Employer/ Completion of Tax Forms Collected by All Employees.

The law stipulates that an employer is answerable for PAYE deducted or to be deducted and paid to Government.

Collection of Tax Form 'A' by Employer/                    Completion of Tax Forms Collected by All            Employees.

Tax form 'A' will be supplied free of charge to employees through their employers. Employers should approach the relevant Tax Offices in their various States where they operate to collect Tax forms 'A'.Employers should certify the correctness of the salaries and allowances declared in the forms by their employees to ensure that correct relief are granted the employee. Employees whose forms are not fully completed and certified by their employers may experience delay in getting their tax deduction cards.


2.       Submission of End of Year Returns

Section 81(2) of PITA as amended provides that 'Every employer shall be required to file a return with the relevant tax authority of all emoluments paid to its employees not later than 31st January of every year in respect of all employees in its employment in the preceding years'.

Section 81(3) prescribed a penalty of N500,000 for corporate bodies and N50,000 for individuals for  non-compliance with Section 81(2) above.


3.       Remittance of PAYE Deductions.

  
Remittance must be done within 10days of the end of each month in order to   prevent payment of interest and penalty for late remittance. A receipt must be collected by the employer for any remittance made.


4.       Returns by Taxpayers

Section 41 of PITA as amended provides that all Taxpayers shall render annual returns of all income earned in the prescribed form to the relevant State Internal Revenue Service. Please note that this returns is  not a substitute to the one demanded in Section 81 of the Act.



BENEFITS OF FRUITS

Eating fruit provides health benefits  people who eat more fruits and vegetables as part of an overall healthy diet are likely to have a reduced risk of some chronic diseases. Fruits provide nutrients vital for health and maintenance of your body.


Health Benefits

Eating a diet rich in vegetables and fruits as part of an overall healthy diet may reduce risk for heart disease, including heart attack and stroke.


Eating a diet rich in some vegetables and fruits as part of an overall healthy diet may protect against certain types of cancers.

Diets rich in foods containing fiber, such as some vegetables and fruits, may reduce the risk of heart disease, obesity, and type 2 diabetes.

Eating vegetables and fruits rich in potassium as part of an overall healthy diet may lower blood pressure, and may also reduce the risk of developing kidney stones and help to decrease bone loss.


Eating foods such as fruits that are lower in calories per cup instead of some other higher-calorie food may be useful in helping to lower calorie intake.



QUOTES OF THE MONTH

1.       “In the end, it is not the years in your life that count. It is the life in your years” ...........ABRAHAM        LINCOLN.

2.      “I am for the truth, no matter who tells it, I am for justice, no matter who it is for or against. I am a human being, first and foremost, and as such, I am for whoever and whatever benefits humanity” .......... MALCOLM X

3.      “Someone is sitting in the shade today because someone planted the tree a long time ago”  ............ WARREN BUFFETT



FROM PARTNER'S DESK

Just like yesterday, the year 2014 started with high hopes and expectations from Government, Corporate bodies and even employees. The year was quite eventful of the good, the bad and the ugly. In all, we are grateful to God for navigating us through the stormy waters of the year. We must express our profound gratitude to you for believing in us and supporting us with your patronage.


We sincerely apologies for all our shortcomings during the year, whilst reassuring you of improved services in 2015. We are constantly re-tooling our operational machineries in both technologies and human capital in order to meet and possibly exceed your expectations.

We wish you a merry Christmas and a happy new year.



Thank you



Elvis C. Onuora FCA, FCTI

Dec. 2014