This edition of the Kenna Partners’ Observatory covers a wide category of updates spanning taxation, art, telecommunications, corporate and energy industries. The Nigerian Tax Bill, the Foreign Exchange Code 2024, the Kenna Partners’ Energy Dialogue, and the exclusive book reading of Creating Art: Authenticity and Ownership in the Visual Art, are some of the major updates are covered in this publication.

THE KENNA PARTNERS 2024 ENERGY DIALOGUE

The Energy Practice Unit of the Kenna Partners hosted its inaugural Energy Dialogue on October 9, 2024, on the theme “Divestments, Reinvestments, Deep-Offshore Development, and the Future of Oil and Gas in Nigeria”. Held at Victoria Island, Lagos, the event attracted a distinguished audience of C-level executives and key stakeholders from the oil and gas sector. The gathering was a vital forum for industry leaders to engage in substantive discussions on the evolving landscape of Nigeria’s energy industry.

The event featured insightful speeches from esteemed speakers, including Engineer Kamoru Oladimeji Busari, FNSE, Director of Upstream at the Ministry of Petroleum Resources of Nigeria, who represented the Honourable Minister of Petroleum Resources, Mr Heineken Lokpobiri; Mr Victor Diseiye Otobo, Head of the National Oil and Gas Excellence Centre, representing the Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Mr Gbenga Komolafe; and a keynote address by Professor Fabian Ajogwu, OFR, SAN, Senior Partner at Kenna Partners.

The dialogue aimed to address significant trends in the sector, including the dynamics of divestments and reinvestments, and the strategic importance of deep-offshore development. Participants explored the challenges and opportunities ahead, particularly within the context of Nigeria’s economic framework and global energy demands. The exchange of insights and perspectives proved invaluable, fostering collaboration among executives and stakeholders, enabling them to align their strategies with the anticipated trajectory of the oil and gas sector in Nigeria.

This inaugural event not only highlighted Kenna Partners’ commitment to facilitating high-level discussions in the energy sector but also underscored the importance of collective efforts in navigating the complexities of oil and gas investments. By bringing together prominent figures in the industry, the Energy Dialogue provided a unique opportunity for participants to share best practices, discuss innovative solutions, and chart a sustainable path toward the future of oil and gas in Nigeria.

AUTHENTICITY IN THE ART, CONVERSATIONS ON THE BOOK: “CREATING ART”

As part of his commitment to enriching the conversations on art collection and creation, Kenna Partners’ Senior Partner, Professor Fabian Ajogwu, OFR SAN, and Dr Jess Castellote hosted an exclusive reading of their latest collaborative book, “Creating Art: Authenticity and Ownership in the Visual Art” at MILIKI, Victoria Island, Lagos. This book, the second instalment in their art series following the successful “Collecting Art: A Handbook”.

Moderated by Ms. Nabilah Usman, the event featured engaging discussions on art ownership, authenticity, originality and the evolving landscape of digital art. Attendees, including art enthusiasts and industry professionals, had the opportunity to engage with the authors on insightful discussions on the complexities of authenticity, artists’ rights, and the implications of digital advancements in the art world.

Participants and Senior Executives at the reading to discuss themes presented in the book from right to left: Mr. Segun Ogunsanya, Chairman, Nigerian Sovereign Investment Authority; Mr. Roger Brown, CEO, Seplat; Mrs. Dudun Peterside, CEO, Narita Learning; Professor Fabian Ajogwu, OFR, SAN, Co-Author; Mrs. Ngozi Edozien, Director, Guinness Nig. Plc; Mr. Atedo Peterside CON, Founder, Stanbic IBTC Bank; Mrs. Dikko; Mr. Ibrahim Dikko, CEO, Hitel Comms and Mr. Karam Chakhtoura, CEO, IPT Technologies.

Professor Ajogwu OFR, SAN emphasised that the book addresses pertinent questions regarding the rights of artists and modifications of purchased artworks, stating, “In ‘Creating Art,’ we were looking at the rights of the visual artist. Can we buy a piece of art and change its colours just because we prefer them? These are things we discussed as affecting the rights of visual artists and artists’ rights.”

Sharing his motivations for co-authoring this work, Dr Castellote stated, “We wanted to address not just our disagreements about what art is, but to provide a valuable resource for both collectors and artists.” He noted that this second book, “Creating Art” focuses on guiding artists through legal and contractual matters, distinguishing it from the previous publication aimed at helping collectors refine their practices.

Emerging trends such as digital rights and the influence of artificial intelligence on art creation were key topics of discussion by the authors. Professor Ajogwu OFR, SAN stated, “Art is going to go beyond what you see hanging on your wall, to digital rights, to dealing with AI, to unitizing ownership, to dispute resolution when there are art disputes of that nature.” He also highlighted the indispensable contributions of institutions such as the Yemisi Shyllon Museum of Art (YSMA) at Pan Atlantic University and the Society for Art Collection (SARTCOL), emphasising their key roles in preserving and promoting the rich narratives of African art.

Renowned art curator, Sandra Obiago, underscored the importance of the book for stakeholders across the art ecosystem, stating, “The issue of authenticity and ownership is something that we grapple with on a daily basis. It’s a very important book for artists and collectors because we’re dealing with authenticity all the time and ownership as we look at a work that we want to acquire.”

Ejike Egbuagu, Founder of the 1952 Africa Art Foundation, brought forth the perspective of young artists, expressing the need for targeted discussions that would equip them with knowledge about originality and value in a competitive market. He stressed that understanding the dynamics of the art market is crucial for emerging talents within the art community.

The event attracted distinguished guests including Mr Atedo Peterside and Mrs Dudun Peterside, Mr Segun Ogunsanya (Chair of NSIA), Mr Roger Brown (CEO of Seplat Energy PLC), Professor Enase Okonedo (Vice Chancellor of Pan Atlantic University), Professor Juan Elegido (former Vice Chancellor of Pan Atlantic University), Mr Nero Asibelua, Ms Ngozi Edozien, both board members of the Society of Art Collection (SARTCOL), Mr Kailesh Patel and Mrs Anita Patel, Mrs Folashade Alli SAN, Mrs Nkemdilim Uwaje-Begho, Dr Hala Daggash and Mr Muhammad Daggash, and other distinguished individuals from the art, business, and academic communities, all united by their shared interest in the arts.

THE NIGERIAN TAX BILL

The Nigeria Tax Bill of 2024 is designed to consolidate various tax laws into a single, cohesive framework aimed at modernising the country’s tax system. This initiative seeks to effectively tackle Nigeria’s current and future economic challenges. Among the key provisions of the bill is an increase in the value added tax (VAT), as outlined in Section 146. The proposal suggests raising VAT from 7.5% to 10% by 2025, with planned increments to 12.5% from 2026 to 2029, and reaching 15% by 2030. The taxable value for monetary transactions will be based on the total consideration plus VAT, while for non-monetary transactions, the market value will apply. When part of a larger transaction, only the relevant portion will be subject to taxation, and the taxable value in transactions between related parties will be determined by the equivalent market value.

The Nigerian Tax Bill 2024, which aims to unify the collection of Value Added Tax (VAT) in the country, raises significant constitutional concerns, particularly regarding the fiscal autonomy of state governments. Currently, the Constitution of Nigeria, specifically under Items 58 and 59 of the Exclusive Legislative List in Part I of the Second Schedule, does not grant the National Assembly the power to legislate on VAT, thereby conferring the authority to impose taxes on the states. However, the proposed bill seeks to centralize VAT collection at the federal level and redistribute the revenues according to a federal formula, potentially infringing on the states’ constitutional rights to manage and control locally generated revenues. This shift to a united VAT regime threatens to undermine the financial independence of state governments by depriving them of their ability to directly manage tax revenues within their jurisdictions, further escalating the constitutional conflict between the federal and state governments over fiscal authority.

Additionally, the bill introduces a 5% excise tax on revenue generated from lottery and gaming activities, as detailed in Section 62 and Schedule 10. This excise duty will be calculated on the gross income of lottery and gaming businesses. In determining the assessable profits, several deductions will be allowed, including amounts paid as winnings, statutory contributions to the Lottery Trust Fund, agency commissions, and levies paid to regulatory authorities in compliance with relevant laws. These measures aim to ensure that the taxation of the gaming sector aligns with industry practices while still contributing to national revenue.

Furthermore, the bill outlines a company tax structure under Section 56, proposing a 27.5% tax rate on total profits for most companies, while small firms will be exempt from taxation. Starting in 2025, the tax rate will decrease to 25% from 2026 onward. Notably, if a company’s effective tax rate falls below 15% in any assessment year, it will be required to recompute its tax liability and pay an additional amount to meet the 15% minimum threshold. This provision seeks to promote tax compliance and ensure a fair contribution from businesses to the national economy.