INDIRECT TAXES AND INFRASTRUCTURAL DEVELOPMENT IN NIGERIA

Transcription

1 Igbinedion University Journal of Accounting Vol. 2 August, INDIRECT TAXES AND INFRASTRUCTURAL DEVELOPMENT IN NIGERIA Adesina Olugoke OLADIPUPO(FCA, Ph.D) Associate Professor Department of Accounting, Faculty of Management Sciences, University of Benin, Benin City, Nigeria. Tel: sinaoladipupo@yahoo.com sina.oladipupo@uniben.edu Peter Okeguale IBADIN(Ph.D) Senior Lecturer Department of Accounting, Faculty of Management Sciences, University of Benin, Benin City, Nigeria. Tel: Correspondence Author: OLADIPUPO, Adesina Olugoke, Department of Accounting, Faculty of Management Sciences, University of Benin, Benin City, Nigeria. Tel: sinaoladipupo@yahoo.com sina.oladipupo@uniben.edu ABSTRACT This study examines the impact of taxation on the infrastructural development in Nigeria. Using the OLS multiple regression analysis we examine the relationships between the major components of tax revenue in Nigeria and Nigeria s infrastructural development. The positive and significant relationships between the infrastructural development and some tax revenue components indicate that policy measures to expand tax revenue through more effective tax administration

2 Igbinedion University Journal of Accounting Vol. 2 August, will impact positively the infrastructural development in Nigeria. Keywords: Indirect tax, infrastructural development, economic development 1. Introduction Tax is a fee charged or levied by a government on a product, income, or activity (Worlu & Emeka, 2012). If it is levied directly on personal or corporate income, it is called a direct tax but if it is levied on the goods or services; then it is called an indirect tax. The main reason for taxation is to finance government expenditure and to redistribute wealth, which translates to financing development of the country. Whether the taxes collected are enough to finance the development of the country will depend on the needs of a country. Countries can seek alternative sources of revenue to finance sustainable development. The political, economic and social development of any country depends on the amount of revenue generated for the provision of infrastructure in that given country. However, one means of generating the amount of revenue for providing the needed infrastructure is through a well structured tax system. The tax system is an opportunity for government to collect additional revenue needed in discharging its pressing obligations. A tax system offers itself as one of the most effective means of mobilizing a nation s internal resources and

3 Igbinedion University Journal of Accounting Vol. 2 August, it lends itself to creating an environment conducive to the promotion of economic growth (Ogbonna &Ebimabowei, 2012). A country s tax system is a major determinant of other macroeconomic indexes. Specifically, there exists a relationship between tax structure and the level of economic growth and infrastructural development (Ariyo, 1997). Chaudhry and Muni (2010) buttress that tax revenue collection is one significant issue of economic development. It has been said that what the government gives it must first take away. The economic resources available to society are limited, and so an increase in government expenditure normally means a reduction in private spending. Taxation is one method of transferring resources from the private to the public sector. There are others ways of raising revenue by government such as creating of more money, charging for the goods and services it provides or to borrow. So while governments often use all the four methods of raising resources, taxation is usually by far the most important source of government revenue. The question is: have government revenues collected through taxes impacted positively on infrastructural development in Nigeria? Have petroleum profit tax, company income tax; value added tax, etc. impacted positively on infrastructural development in Nigeria? In the light of this, the following research questions are raised: what is the relationship between petroleum profit tax and infrastructural development? What is the relationship

4 Igbinedion University Journal of Accounting Vol. 2 August, between company income tax and infrastructural development? And what is the relationship between value added tax and infrastructural development? The objectives of the study include: to determine the relationship between petroleum profit tax and infrastructural development; to verify the relationship between company income tax and infrastructural development; and to find out the relationship between value added tax and tax infrastructural development. The following hypotheses were tested in this study: there is a significant relationship between petroleum profit tax and infrastructural development; there is a positive relationship between company income tax and infrastructural development; and there is a significant relationship between value added tax and infrastructural development. This study covers a period of thirty years from 1981 to Literature Review We present a review of relevant theoretical and empirical literature related to this study. Ariyo (1997) evaluates the productivity of Nigeria tax system over a period spanning three decades. The study reveals wide variations in the level of productivity by tax source. This was attributed to laxity in the administration of non-oil tax sources during the oil boom periods. Some of these laxities were mopped up later especially with the commencement of SAP in It was observed that opportunities for improvement exist especially in import duty collection. Better monitoring and transparency of

5 Igbinedion University Journal of Accounting Vol. 2 August, operations within the petroleum oil industry would also ensure a significant increase in total government revenue while the government should also desist from revenue bursting activities such as unbridled granting of both the prohibition and duty waiver for public sector projects and few privileged individuals within the society. Myles (2000) opines that economic growth is the basis of increased prosperity. Investment in new capital (both human and physical), the implementation of new production techniques and the introduction of new products are the fundamentals of the growth process. Through its effect on the return on investment or the expected profitability of research and development, taxation can affect the choices that are made. Baghedo (2012) observes that government capital expenditure in Nigeria has continued to rise due to the huge receipt from production and sales of crude oil, increased tax revenue, and the increased demand for public goods like road, communication power, education and health. Besides, there is an increased need to provide both internal and external security for all the people and the nation. Available statistics showed that government capital expenditure has continued to rise from N817.8 million in 1980 to N960,900 million in Unfortunately, rising government expenditure has not translated to meaningful economic growth and development as Nigeria ranks amongst the poorest countries in the world. Throughout the 1970s and 1990s much of public sector

6 Igbinedion University Journal of Accounting Vol. 2 August, investment, which accounted for two third of total investment during the period was directed towards promoting economic growth. Unfortunately, the growth rate was very poor. For instance the growth rate of real GDP was 0.3%, -5.4% and 5.1% in 1983, 1984 and 1985 respectively, which were inadequate to support a population growth rate of three percent. Similarly in 1993, the growth rate of real GDP was 2.7 percent, and one percent in 1994, which was too low to support the population growth rate of 2.8 percent. Worlu and Emeka (2012) examine the impact of tax revenue on the economic growth of Nigeria, judging from its impact on infrastructural development from 1980 and The results show that tax revenue stimulates economic growth through infrastructural developments. That is it highlights the channels through which tax revenue impacts on economic growth in Nigeria. The study also reveals that tax revenue has no independent effect on growth through infrastructural development and foreign direct investment, but just allowing the infrastructural development and foreign direct investment to positively respond to increase in output. However, tax revenues can only materialize it full potential on the economy if government can come up with fiscal laws and legislations and strengthen the existing ones in line with macroeconomic objectives, which will check-make tax offenders in order to minimize corruption, evasion and tax avoidance. These will bring about improvement on the tax administration and

7 Igbinedion University Journal of Accounting Vol. 2 August, accountability and transparency of government officials in the management of taxation revenue. Above all, these will increases the tax revenue base with resultant increase in growth. Ogbonna and Ebimobowei (2012) examine the impact of tax reforms on the economic growth of Nigeria from 1994 to The results from the various test shows that tax reforms is positively and significantly related to economic growth and that tax reforms grangers caused economic growth. On the basis of findings, the study concluded that tax reforms improves the revenue generating machine of government to undertake socially desirable expenditure that will translate to economic growth in real output and per capita basis. However, it was recommended that sustainable economic growth cannot be attained with tax reform processes except obsolete tax laws and rates are reviewed in line with macro-economic objectives, corrupt free and efficient tax administrative machinery with personnel s and accountability and transparency of government officials in the management of tax revenue. Okafor (2012) explores the impact of income tax revenue on the economic growth of Nigeria as proxied by the Gross Domestic Product (GDP). The ordinary least square (OLS) regression analysis was adopted to explore the relationship between the GDP (the dependent variable) and a set federal government income tax revenue heads over the period A simple hypothesis was formulated in the null form which states that there is no significant relationship between federally collected tax revenue

8 Igbinedion University Journal of Accounting Vol. 2 August, and the GDP in Nigeria. The regression result indicated a very positive and significant relationship. However, actual tax revenue generated in most years fell below the level expected. The anomaly was attributed to dysfunctional in the income tax system, hoop holes in tax law and inefficient tax administration. Suggestions were made as to strategies to be adopted to improve the system of tax administration to increase tax revenue generation. Ebiringa and Emeh (2012) examine the empirical forms of tax on the economic growth in Nigeria. Secondary data were sourced within the period of and model was specified and estimated using some econometric. The result showed that the determinant factor of economic growth in the country through tax, only custom and exercise duties is capable of influencing but has an inverse relationship and significant to the GDP. It is observed that economic instability were experienced between and 1993 to 1995 but evident in the stability in the economic growth from the graph in the rest of the years of the study around bench mark value of zero line of the GDP predicted graph based on tax generated or tax generations in Nigeria Wambai and Hanga (2013) looked at taxation as a tool for societal development with a view to assessing the nature and size of Kano s hidden economy; identify those in the hidden economy, and the appropriate approach to tackling such an economy. The survey method was used to administer questionnaire on 40 respondents to generate data which is

9 Igbinedion University Journal of Accounting Vol. 2 August, measured on a simple majority or percentage of opinions. It was discovered that informality is a self-reported lack of tax compliance in a sample of individuals and businesses who also answered questions on a large set of issues. The study found that more tax compliance is significantly associated with adequate campaign and judicious utilization of tax funds. The paper recommends that the tax base should be expanded in order to bring the hidden economy into the tax net, the tax law shall also be simplified to get rid of ambiguity in the interpretation of its provisions. Adejoh and Sule (2013) analyze the extent to which revenue generation had affected the development of the selected local government. The researcher used both primary and secondary methods of data collection to generate the needed data. The data obtained through secondary data were analyzed using simple least square regression method (SPSS version 17). The following were some of the finding which included the following; there is a significant relationship between revenue generated and development poor development of the areas, lack of basic social amenities to the rural people and lack of revenue to maintain the existing infrastructures. Umoru and Anyiwe (2013) investigate the empiricism behind the new national tax policy in Nigeria by employing co-integration and error correction as methods of empirical estimation with an empirical strategy of disaggregation. In line with the objective of the paper, empirical results indicate that while the policy of direct taxation is

10 Igbinedion University Journal of Accounting Vol. 2 August, significantly and positively correlated with economic growth, indirect taxation proved in significant with its negative impact on economic growth in Nigeria. The paper indeed ascertained that the tax based revenue profile in Nigeria is skewed towards direct taxes. By implication, the global transition from direct taxation to indirect taxation lack empirical jurisdiction and justification in developing countries such as Nigeria. Over the years, many developed countries economies have made considerable investment in legislative tax reforms, taxpayer education programs, tax enforcement strategies, and increasingly sophisticated system of tax administration using new technologies. Undoubtedly there are lessons to be learnt from studying best practice in developed economies. However, compared to their counterparts in developed economies, policy makers and revenue authorities in developing economies face quite different challenges and constraints (such as tax complaints, tax evasion, etc) that require careful consideration in designing appropriate and effective tax systems, hence this research was carried out to examine tax and infrastructural development in Nigeria. 3. Methodology This section highlights the population of the study. The research, instrument, the sources of data collection, data analysis techniques, statistical test employed to test the stated hypothesis as well as the decision rule obtained applicable

11 Igbinedion University Journal of Accounting Vol. 2 August, statistical test. A research design basically is a conceptualization of the research methodology (Izedonmi, 2008). It is concerned with the techniques used in the gathering of data for a research study. It encompasses the sources of data collection, the population of study, the sample size as well as the data analysis techniques. Time series data are used in this study. An econometric model was developed to examine the nexus or linkage between taxation and infrastructural development. For the purpose of the study secondary data collected from the bulletin of the Federal Office of Statistics (FOS), Central Bank Bullion and Central Bank Statistical Bulletin for the period of The functional form of the model specified for this study is given as: Indev f ( PPT, CIT, VAT ) This is econometrically expressed as follows: Indev a PPT a CIT a VAT e Where, INDEV = Infrastructural Development PPT = Petroleum Profit Tax CIT = Company Income Tax VAT = Value Added Tax e = Stochastic error

12 Igbinedion University Journal of Accounting Vol. 2 August, Beside the use of the descriptive statistics and Pearson Product Moment Correlation technique, we used the Ordinary Least Squares multiple regression technique to test the above model. We tested the overall significance of the model using the F- statistic and individual significance of the explanatory variables was assessed using the student t-test. 4. Results and Discussion This section is based on the results of the ordinary least square (OLS) regression on taxation and infrastructural development using Nigeria data from 1981 to The variable for this study include infrastructural development (INDEV) (as proxy by federal government expenditure on transport and communication) as the dependent variable, while the independent variables indirect tax (INDTAX), oil revenue (OREV) and non oil revenue (NOREN). Descriptive Analysis Table 1 highlights descriptive statistics of variables. Infrastructural development (INDEV) which is the dependent variables has a means of and a standard deviation value of Indirect Tax (INDTAX) has a mean value of and a standard deviation of Oil Revenue (OREV) has a mean value of and a standard deviation of , while non oil revenue (NOREV) exhibit a mean value of and it standard deviation stood at

13 Igbinedion University Journal of Accounting Vol. 2 August, The last column represents the number of samples in our observation. Table 1: Descriptive Statistics: Taxation and Infrastructural Development INDEV INDTAX OREV NOREV Mean Median Maximum Minimum Std. Dev Skewness Kurtosis Jarque-Bera Probability Sum Sum Sq. Dev. 2.33E E E E+12 Observations Source: Authors Computation (2016). Correlation Analysis The Table 2 shows that the coefficients of correlation of a variable with respect to itself it This indicates that there exists a perfect correlation between a variable with respect to itself. The correlation co-efficient between the

14 Igbinedion University Journal of Accounting Vol. 2 August, dependent variable and independent variables are discussed below. The result showed that there exists a positive relationship between indirect TAX (INDEX) and Infrastructural Development (INDEV). The correlation coefficient between Indirect Tax (INDTAX) and Infrastructural Development (INDEV) is which means the strength of relationship between them is about -0.02% which shows a very week negative relationship between Indirect Tax (INDTAX) and Infrastructural Development (INDEV). The result showed that there exists a negative relationship between oil Revenue (OREV) and Infrastructural Revenue (OREV) and Infrastructural Development (INDEV). The Correlation Coefficient between Oil Revenue (COREV) and Infrastructural Development (INDEV) and Infrastructural Development (INDEV) value which means the strength of relationship between them is about which shows a strong positive relationship between Oil Revenue (OREV) and Infrastructural Development (INDEV). Non-Oil Revenue (NOREV) exhibits a positive relationship between it and Infrastructural Development (INDEV). The Correlation Coefficient between Non Oil Revenue (NOREV) and Infrastructural Development (INDEV) value which means the strength of relationship between them is about 0.88% which shows a very good positive relationship between Non oil Revenue (NOREV) and Infrastructural Development (INDEV).

15 Igbinedion University Journal of Accounting Vol. 2 August, Table 2: Correlation Matrix: Taxation and Infrastructural Development Covariance Analysis: Ordinary Sample: 1 31 Included observations: 31 Correlation Probability INDEV INDTAX NOREV OREV INDEV INDTAX NOREV OREV Source: Authors Computation (2016).

16 Igbinedion University Journal of Accounting Vol. 2 August, Regression Analysis The result obtained from the preliminary ordinary least square estimation technique is presented below. Table 3: OLS Regression Analysis (Initial Output): Taxation and Infrastructural Development Dependent Variable: INDEV Method: Least Squares Date: 02/17/14 Time: 22:42 Sample: 1 31 Included observations: 31 Variable Coefficie nt Std. Error t-statistic Prob. C INDTAX OREV NOREV R-squared Adjusted R-squared

17 Igbinedion University Journal of Accounting Vol. 2 August, F-statistic Prob(F-statistic) Durbin-Watson stat Source: Authors Computation (2016) The coefficient of determination (R 2 ) of 0.92 shows that about 92% of the total systematic variations in the dependent variable (infrastructural development, INDEV) is explained by the explanatory variables taken together. The adjusted R- square shows that after adjusting for the degree of freedom, the model could still explain about 91% of the total systematic variations in the infrastructural development (INDEV) while about 9% of the systematic variations in infrastructural development (INDEV) was left unaccounted for, which has been captured by the stochastic disturbance term in the model. This indicates a good fit of the regression line and also the model has a high forecasting power. On the basis of the overall statistical significance of the model as indicated by the F-statistic, it was observed that the overall model was statistically significant since the calculated F value of was greater than the critical F-value of 1.69 at 5% level of significance. This implies that there exist a significant linear relationship between infrastructural development (INDEV) and all the independent variables: Oil

18 Igbinedion University Journal of Accounting Vol. 2 August, Revenue (OREV), Indirect Tax (INDTAX) and Non- Oil Revenue (NOREV). On the basis of the individual statistical significance, as shown by the t-statistic, it was observed that indirect Tax (INDTAX) is negative and insignificant, hence its calculated t- values of is less than the critical t-value of 1.69 at 5% level of significance. The result revealed that oil Revenue (OREV) is positive and significant, hence its calculated t-values of 2.87 is greater than the critical t-value of 1.69 at 5% level of significance. None Oil Revenue (NOREV) is also positive and highly significant since its calculated t-value of 6.92 is greater than the critical t-value of 1.69 at 5% level of significance. The DW statistics at 0.78 showed the presence of the first order auto-correlation in the model. Due to the problem of first order auto-correlation in the preliminary ordinary least square regression result, the model was re-estimated using Cochrane-Orcutt method. The result is shown below in Table 4. Table 4: OLS Regression Analysis (Final Output): Taxation and Infrastructural Development Dependent Variable: INDEV Method: Least Squares Sample (adjusted): 2 31 Included observations: 30 after adjustments

19 Igbinedion University Journal of Accounting Vol. 2 August, Convergence achieved after 97 iterations Variable Coefficie nt Std. Error t-statistic Prob. C INDTAX OREV NOREV AR(1) Mean dependent R-squared var Adjusted R- squared S.D. dependent var Akaike info S.E. of regression criterion Sum squared resid 1.22E+11 Schwarz criterion Hannan-Quinn Log likelihood criter. Durbin-Watson F-statistic stat Prob(F-statistic) Inverted AR Roots.65

20 Igbinedion University Journal of Accounting Vol. 2 August, Source: Authors computation (2016) The coefficient of determination (R 2 ) with a value of 0.94 shows that about 94% of the total systematic variations in the dependent variable (infrastructural development, INDEV) has been explained by the explanatory variables taken together. The adjusted R-square shows that after adjusting for the degree of freedom, the model could still explain about 93% of the total systematic variations in infrastructural development (INDEV) while about 7% of the systematic variations in infrastructural development (INDEV) was left unaccounted for, which has been captured by the stochastic disturbance term in the model. This indicates a good fit of the regression line and also the model has a high forecasting power. On the basis of the overall statistical significance of the model as indicated by the F-statistic, it was observed that the overall model was statistically significant since the calculated F-value of was greater than the critical F-value of 1.69 at 5% level of significance. This implies that there exists a significant linear relationship between infrastructural development (INDEV) and all the independent variables; oil revenue (OREV), indirect tax (INDTAX) and nonoil revenue (NOREV). On the basis of the individual statistical significance, as shown by the t-statistic, it was observed that indirect tax (INDTAX) is positive but insignificant, hence its calculated t-values of 0.18 is less than the critical t-value of 1.69 at 5% level of significance. The result revealed that oil revenue

21 Igbinedion University Journal of Accounting Vol. 2 August, (OREV) is positive and highly significant since its calculated t- value of 4.27 is greater than the critical t-value of 1.69 at 5% level of significance. Non-oil revenue (NOREV) is also positive and highly significant since its calculated t-value of 5.76 is greater than the critical t-value of 1.69 at 5% level of significance. The Durbin-Watson (DW) statistic value of 1.66 is a significant improvement on the preliminary OLS and hence indicates the absence of auto-correlation. In order to test the hypothesis of the study, the t-statistic obtained from the regression result were used. The study adopted 5% level of significance under the one-tailed test. Our decision rule is that we accept the alternative hypothesis if the t-calculated is greater than the t-critical value (from table of student t-distribution) otherwise we reject and accept the null. The t-critical value is 1.69 at 5% (0.05) significant level and at 31 degree of freedom (one-tail). As to whether there is a positive relationship between Oil Revenue and Infrastructural development, it was observed that Oil Revenue (OREV) with a calculated t-value of 4.26 is greater than the critical t-values of 1.69 at 5% level of significance. We therefore reject the null hypothesis and accept the alternative hypothesis which states that there is a positive relationship between oil revenue and infrastructural development. Again as to whether there is a significant relationship between non-oil revenue and infrastructural development, it was observed that

22 Igbinedion University Journal of Accounting Vol. 2 August, non-oil revenue (NOREV) with a calculated t-value of 5.57 is greater than the critical t-values of 1.64 at 5% level of significance. We therefore reject the null hypothesis and accept the alternative hypothesis which states there is a significant relationship between Non Oil Revenue and Infrastructural development. 5. Summary and Conclusion From the study we observe that there is no significant relationship between indirect tax and infrastructural development. We also observe positive relationship between Oil Revenue and Infrastructural development. The result also shows a significant relationship between non-oil revenue and infrastructural development. Based on the above we recommend that tax revenue should be equitably distributed among the three tiers of government according to the principles of derivation. The local government and states of the federation deserve more share respectively than the federal government in view of enormous fiscal jurisdiction available to the federal government. Taxable organizations and individuals data bank need to be appropriately captured for effective administration. The FIRS had a responsibility to engage professionals to undertake public enlightenment on tax education among these organizations. There should be a feedback from the taxpayer to improve operating efficiencies and avoid weaknesses. Government should make judicious use of tax revenue for

23 Igbinedion University Journal of Accounting Vol. 2 August, economic development of the nation, provide infrastructural facilities that will improve the welfare of the general populace and alienate their suffering. Government should crate tax appeal panel in each states of the federation so that tax payer can file petitions and complaints on issue relating to tax matters. The panel members should constitute experience and qualify tax personnel and non-tax officials that have the experience of law. These recommendations if consciously adopted will only rapidly help in the effective administration of tax revenue in Nigeria. Tax revenue constitutes a major component of national income in a modern economy. It is the dominant source of government recurrent revenue in most develops countries. The world s largest economy which is the United States of America is tax revenue driven. The impact of taxes may not be as significant in developing countries, most of which are fueled by commodity export earnings. The Nigerian economy is heavily dependent in crude oil export receipts. The immense potentials of taxes as a major engine room for fueling the economy have not been exploited; oil is a wasting national asset and the major components of tax revenue in Nigeria. The positive danger of over-reliance on crude oil export receipts to drive the economy seems to have raised to the front burner of current economic policy discussions. The need to expand the tax yield through improved tax system administration has become a major economic policy issue.

24 Igbinedion University Journal of Accounting Vol. 2 August, REFERENCES Adejoh, E. & Sule, J.E. (2013). Revenue generation: It s impact on government developmental effort (a study of selected local council in Kogi East Senatorial District). Global Journal of Management and Business Research Administration and Management, 13(3), Ariyo, A. (1997). Productivity of the Nigerian Tax system: Nairobi: Research paper, African Economic Research Consortium Nairobi, Baghebo (2012). Effective utilization of tax revenue in Nigeria. Journal of Accounting and Financial Reporting, 2(2), Goodspeed, T.J. (2005). Taxation and FDI in developing countries. International studies program public finance conference. The challenges of Tax Reform in Global Economy, James, S. & Allye, C. (2004). Tax compliance, self assessment and tax administration. Journal of finance and management in public services, 2(2), Myles, G.D. (2000). Taxation and economic growth, institute for fiscal studies and University of Exeter, 21(1),

25 Igbinedion University Journal of Accounting Vol. 2 August, Odusola, A. (2006). Tax policy reforms in Nigerian, world institute for development economic research, research paper 3: Ogbonna, C.N. & Ebimobowei, A. (2012). Impact of tax reforms and economic growth of Nigeria: A time series analysis, current research. Journal of Social Science 4(1): Okafor, R.G. (2012). Tax revenue generation and Nigerian economic development. European journal of business and management, 4(19), Umoru, D. & Anyiwe, M.A. (2013). Tax structures and economic growth in Nigeria: Disaggregated empirical evidence. Research Journal of Financial and Accounting, 4(2), Wambai, U.S.K. & Hanga, B.Y. (2013). Taxation and societal development in Nigeria: Tackling Kano s Hidden Economy. International Journal of Academic Research in Business and Social Sciences, 3(3), Worlu, C.N. & Emeka, N. (2012). Tax revenue and economic development in Nigeria: A macro-econometric approach. Academic Journal of Interdisciplinary Studies, 1(2),

26 Igbinedion University Journal of Accounting Vol. 2 August,

27 Igbinedion University Journal of Accounting Vol. 2 August,

28 Igbinedion University Journal of Accounting Vol. 2 August, YEAR INDEV INDTAX OREV NOREV N'Million N'Million N'Million N'Million

29 Igbinedion University Journal of Accounting Vol. 2 August,