The Nation Newspaper

Tag: Tax

  • NLC accuses multinationals, rich Nigerians of tax evasion

    Nigeria Labour Congress (NLC) yesterday accused multinational companies operating in Nigeria and wealthy citizens of evading tax.

    Its President Comrade Ayuba Wabba spoke at the opening of a workshop on “Tax Justice and Illicit Financial Flows (IFFs)” organised by the congress.

    It was organised in collaboration with the Public Service International, International Trade Union Confederation (ITUC-Africa) and Friedrich Ebert Stiftung in Abuja.

    He said halting illicit financial flows, non-payment of taxes, corruption and,in their place, instituting responsive governance would tame poverty and inequality.

    Wabba said: “In the context of Nigeria, the burden of payment of tax is squarely on the workers and they call it ‘pay as you earn’. Before you are paid, the tax is already removed and therefore, the rich and the powerful feast on our commonwealth, which is the tax we contribute.

    “In other spheres, it is the other way round. The rich subsidises for the poor so that we can have a decent society and have social justice. This is the whole essence of this campaign, which I think is our campaign as workers. We must continue to advocate for social justice and ensure that the rich pay appropriate tax. The most important aspect is that multinationals and bigger businesses evade payment of tax. Infact, they don’t pay tax at all.

    “We are aware that these individuals that evade tax are very powerful. I am sure that when we pull our forces together as citizens that are concerned, we are going to overcome them.”

    He explained that in 2016, the congress led a protest campaign to the office of the Minister of Finance, demanding that the issue of IFFs must receive urgent attention.

    He said: “I wish to state that our effort has elicited some positive response from government and the Federal Government has taken some steps towards ensuring that those negative trends that allowIFFs out of Nigeria are checked and the trend halted.

    “We are aware that government has set up a presidential committee on IFFs and there are some activities around the review of the tax laws and treaties with a view to promote tax justice.”

    He hailed the “initiative to support Trade Unions in Nigeria to develop, deploy and sustain their tax justice campaign to contribute to the national agenda and end IFFs from the country and contribute to the global demand, where fair taxation reigns.

    “We have affirmed that ending illicit financial flows, corruption and engineering imaginative and responsive governance are some of the ways to tame poverty and inequality. Given that financing is critical to the successful implementation of the Sustainable Development Goals. We need alternative resource mobilisation possibilities that ending IFFs and corruption can provide.”

  • FATE Foundation may seek FIRS tax amnesty for MSMEs

    FATE Foundation may seek FIRS tax amnesty for MSMEs

    FATE Foundation (FATE) may  seek  the extension of tax amnesty for Micro, Small, MediumEnterprises and new startups on account of the challenging economic environment.

    Last  year, FATE and other organisations got Federal Inland Revenue Service (FIRS) to free small businesses from tax burdens as it waved all outstanding tax liabilities against them up till the end of the year.  Following this, the Service granted a 45-day tax amnesty for businesses that had not paid taxes between 2013 and 2015.

    Executive Director, FATE Foundation, Mrs. Adenike Adeyemi said the  45-day window, which was to close on November 24, last year was extended to December 31 for SMEs

    FIRS Executive Chairman, Tunde Fowler, said  the agency realised N27.086 billion from the waiver of tax penalty, adding that FIRS introduced the programme  to allow defaulters regularise their relationship with the agency.

    Despite this, Mrs. Adeyemi said the heavy tax on pioneering small businesses could pose threat to earlier investments in the light of the declining economic growth.

  • FIRS introduces six online tax solutions

    FIRS introduces six online tax solutions

    •Fowler: innovation represents revolution in tax administration

    The Federal Inland Revenue Service (FIRS) has introduced six key electronic solutions (e-Services) to enhance convenience, transparency and round the clock processing and payment of taxes.

    Some of the e-Services, which could now be accessed online, are taxpayer registration (through e-Registration); payment of Stamp Duties (through e-Stamp Duty); payment of taxes (through online payment: e-TaxPay, Remita); receiving of electronic receipt after payment of taxes (through e-Receipt); filing tax returns online (through e-filing) and online Tax Clearance Certificates (TCC) through electronic Tax Clearance Certificate (e-TCC solution).

    Executive Chairman Tunde Fowler, who explained this in Abuja, said the e-Services innovation represent “a revolution in tax administration in Nigeria”.

    “The idea behind the six ICT solutions is to make tax payment as easy as ABC, to bring convenience to our taxpayers. The ICT solutions, which we are bringing to the doorsteps of taxpayers, will ensure that taxpayers could pay, get receipt and get TCC from the comfort of their homes and offices anytime, anywhere in the world and round the clock. This saves the time of taxpayers, it is transparent, fast, easy to use and convenient,” Fowler said.

    According to FIRS, the implication of e- Receipt, for example, is that when tax payments are made, an electronic notification will be automatically sent to the taxpayer’s email and or phone number within 24 hours after payment.

    “If for any reason a taxpayer loses the print out, they can access FIRS e-Receipt platform by log in into the FIRS website and download their receipt. This process eliminates manual interventions.

    The e-TCC provides an e-repository of all Tax Clearance Certificates (TCCs) issued by FIRS. It enables FIRS Staff and authorised third parties to obtain their TCC online without visiting a tax office. E-TCC reduces incidence of fraudulent certificates.

    “E-TCCs are automatically sent to the emails of taxpayers. Taxpayers can also request for and print their TCCs online.

    Fowler said the introduction of the new solutions is one of the key steps to make FIRS services convenient, easy and available everywhere and at all times.

    “It is a revolution in tax administration that combines innovation, convenience and transparency,” the FIRS Chairman said.

  • NECA decries agencies’ attitude over tax

    NECA decries agencies’ attitude over tax

    The Nigerian Employers Consultative Association (NECA) has decried the  overbearing attitude of some revenue generating government agencies. This, the association said, has negative effects on their performance.

    Speaking on the forthcoming 60th anniversary of the Association, NECCA’s Director- General, Olusegun Oshinowo explained that there was every reason for the employers’ body to celebrate the anniversary.

    He argued that regulatory agencies’activities were threatening the survival of businesses despite employers’ efforts to function in a harsh operating environment.

    “Businesses are confronted by regulatory issues, chief among is multiple taxations. The various demands from the agencies are expected to be met by one company without the agencies being concerned as to the cash flow of that company. The effects of the challenges faced by the companies or the fact that the demands are from different agencies of government on companies are the redundancy exercise experienced in the country and closing down of businesses, among others,”he said.

    He mentioned lack of access to foreign exchange by the real sector, lack of raw materials for manufacturing companies, volatile exchange rates, high interest rates and the fall in crude oil price as some factors adversely affecting employers across the country.

    According to Oshinowo, NECA was in consultation with the Lagos Inland Revenue Service (LIRS) against restraining any of its member companies on tax issues without first consulting with it, adding that NECA was equally institutionalising the same understanding with other state boards of internal revenue services.

    While reiterating the employers’ body support for a new minimum wage, he explain that such negotiations must not be done without considerating the survival of businesses.

    His words: “It is within the rights of labour and anybody or institution to clamour for increment in the national minimum wage. However, certain factors must be taken into consideration before arriving at a new national minimum wage for the country.

  • Kwara at 50: Ahmed announces tax holiday for businesses

    Kwara at 50: Ahmed announces tax holiday for businesses

    Kwara state Governor Abdulfah Ahmed has announced tax holiday for new business outfits and investors coming into the state.

    The decision according to him would encourage the growth of small scale business enterprises in the state.

    The governor directed the chairman of the Kwara state Internal Revenue Service (KW-IRS), Dr Muritala Awodun to write a memo to him requesting for the approval.
    He however clarified that existing business outfits would have to continue the payment of their taxes while assuring that government will continue to provide enabling environment for businesses to grow.

    The governor said this just as the former deputy governor of Central Bank of Nigeria (CBN), Dr Sarah Alade  said Kwara state has the lowest unemployment rate of 85 Per cent amongst the 36 states in Nigeria.

    She urged the state government to come up with an economic blueprint that will turn around the future of the state in the next 50years.

    Both governor Ahmed and ex-CBN boss spoke at a lecture to mark the 50 years anniversary of creation of the state held in Ilorin where they discussed the economic future and challenges of the state

    Alade had in a paper she presented titled “Socio -Economic Development of Kwara state :an Agenda For the futture” stated that taxation topped the list of” 26 most problematic” factors preventing people from doing business in Kwara.

    She said the factors were generated from survey conducted on 325 companies in the state .

     

    While highlighting the potential of the state, Alade said the state has largest Small and Medium Scale Enterprises (SMEs )that should be leverage on to turn around the economic future of the state in next 50 years

     

    She however called on the state government to address what she called “lopsided infrastructure Development in Kwara central” and charged the state to spread infrastructure to rural areas to reduce pressure on the centre.

     

  • Oyo shuts firm for tax default

    Oyo State government has shut CNC Quarry Company owned by the Chinese for non-payment of tax.

    The Special Adviser to the Governor on Board of Internal Revenue, Mr. Biyi Oloko, who led a team of tax enforcers to the company in Oluyole Local Government, said the government would ensure stakeholders complied with the rules guiding payment of taxes.

  • Adeosun, G24 discuss tax revenues, compliance

    Adeosun, G24 discuss tax revenues, compliance

    Boosting tax revenues and compliance to drive sustainable economic development in Nigeria is featuring prominently in Finance Minister  Kemi Adeosun’s discussions  with fellow finance ministers in the G24 Group at the ongoing International Monetary Fund (IMF)/ World Bank Spring Meetings in Washington D.C.

    She said at the forum that revenue mobilisation is critical to the success of the nation’s economic reform agenda.

    “We have an unacceptably low level of non-oil revenue, and much of that is driven by a failure to collect tax revenues,” she said.

    “With a tax to the Gross Domestic Product ratio of only six per cent, one of the lowest levels in the world, we have a lot of work to do, if we are going to build a sustainable revenue base that will deliver inclusive growth.

    “Our data gathering programme over the last year has now given us the tools we need to be more aggressive at pursuing tax avoiders, both domestically and abroad.”

    Adeosun pointed out that just as some of her contemporaries in the G24 have done successfully in their countries, Nigeria is focusing  on tax in 2017 through an asset and income declaration scheme to address its low tax revenue collection and ensure improved compliance, a broader tax base and more sustainable revenue.

    The minister also stressed the need for strong budget implementation and transparency to create trust and accountability in government, saying: “While we focus on raising revenues and bringing people into the tax system, we must be equally aggressive in our approach to budget implementation and transparency.

    “Our people must know where their hard-earned tax contributions are being spent and the impact that they are having on national development and the daily lives of citizens. This will be a core focus for us.”

    The minister met separately with the ratings agencies Moody’s and Fitch to update them on progress towards economic reform objectives, and with the World Bank country team to discuss the status of ongoing projects in Nigeria and the pipeline of projects for 2018.

    She is due to attend meetings on closing the financing gap for water, affordable housing finance, food security and nutrition in the coming days as part of government’s focus on sustainable solutions to some of Nigeria’s most pressing social challenges.

  • Bayelsa education tax

    •It is hard to accept in an oil-bearing state since non-oil states do it without levies

    Bayelsa State Governor, Mr. Seriake Dickson, has announced the introduction of a compulsory education levy in the state to be administered through a newly established Education Development Trust Fund (EDTF).  Justifying the initiative, Dickson said: “It is better for us to put together resources to fund mass education. Yes, in this state we have some educated people but the judgement I have made over time is that we have yet to get that critical mass of highly skilled and qualified personnel and unless we have them, we are in trouble”.

    Giving some insight into how the compulsory education tax will be implemented, the governor said it would cut across board and will involve civil servants, businesses, contractors, parents and other stakeholders making some sacrifice for the cause of education in the state. Throwing further light on the issue, he said: “…it will take little contributions from every Bayelsan; some will pay as little as N400, N500 per month. There are others that will have to pay N1,000 or more depending on their businesses. For those in the public service, they will also contribute”. Apparently desirous to lead by example, Dickson said he would be contributing N100,000 monthly to the fund while the deputy governor would contribute N50,000, the Speaker of the House of Assembly, N30,000 and other political office holders also contributing amounts commensurate with their status.

    The governor undoubtedly means well and deserves some commendation since the fund is meant, among others, to support free feeding and free uniform for school children as well as other items that will most certainly be of significant relief to parents. However, Dickson’s administration will also have to contend with the perception that Bayelsa as an oil-producing state, which enjoys 13% derivation in addition to its monthly allocation from the Federation Account, should be financially viable enough to effectively fund education without additional tax burden on the citizenry. This is particularly so because Bayelsa State has a population of approximately two million people, which is far less than that of some other states that are providing free education for their citizens without enjoying the benefits accruing to oil- producing states.

    Apparently anticipating some degree of resistance to the new tax, particularly at this economic recessionary period, the governor had threatened that anyone who opposed the levy would be considered an enemy of the state. We would rather urge continuous engagement by the administration with stakeholders, with a view to persuading them to see the necessity for the tax and the long-term benefits to the state.

    It is no news that Bayelsa State, like most of the 36 states, has been severely affected by the country’s current fiscal crisis attendant on the sharp drop in the international price of crude oil. Lamenting the sharp drop in its allocation from the Federation Account, last year, Governor Dickson said the state was no more in a position to comfortably meet its wage bill obligation of N4 billion to its workers or even borrow from banks to augment salary payment as was the practice in the past. The parlous finances of the state was reflected not just, for instance, in pensioners protesting alleged non-payment of five months pension arrears last year but also by the more significant fact that in 2016, the state’s budget was N150 billion as against N250 billion in 2015, with a negligible sum of N25 billion allocated for capital projects.

    The underlying lesson of Bayelsa’s financial crisis, which mirrors the situation in most other states, is the imperative, both to manage available resources more prudently at that level of governance and also for states to creatively tap their potentials to achieve better economic viability and self sustainability, as well as reduce their dependence on allocations from the centre.

  • GTB Posts N165b Profit Before Tax, says Agbaje

    GTB Posts N165b Profit Before Tax, says Agbaje

    •‘We’ve simplified banking processes’

    Guaranty Trust Bank has posted a Profit before tax  N165.14 billion, in its 2016 operating year, the Managing Director/CEO, Segun Agbaje, has said.

    Agbaje, who made this known yesterday at a press parley in Lagos, said the profit  represented a growth of 37 per cent over the N120.69 billion recorded in the corresponding period of December, 2015.

    He said the bank’s loan book grew by 16 per cent from N1.373 trillion recorded as at December 2015 to N1.59trillion in December 2016, with corresponding growth in total deposits, which he added, increased by 29 per cent to N2.111 trillion from N1.637 trillion in December 2015.

    The bank’s balance sheet, Agbaje stated, remained strong with a 19.7 per cent growth in total assets and contingents, as the bank closed the year ended December 2016 with Total Assets and Contingents of N3.70 trillion and shareholders’ funds of N504.9 billion.

    Agbaje yesterday said the lender gives priority to simpler and faster banking, which have helped it grow and retain its customers.

    He said the lender has in the last five years, tripled its customer base to 9.68 million as at December 31, 2016.

    “As part of our strategy to grow our retail business, we are continuously making our banking processes and touch points simple, easier, and faster irrespective of where our customers choose to bank,” he said.

    Agbaje said the bank has expanded the range of functionality it offers on internet, mobile and USSD banking platforms, ensuring better experience in its branches and providing more intelligent Automated Teller Machines (ATMs) to allow customers save time through efficient self-service.

    He said the bank has also seen tremendous growth in customer adoption of its digital services. “We are investing and building our digital capabilities, and also actively seeking to collaborate with FinTech companies.

    “Whether we compete or collaborate, we will be aggressively pursuing these digital opportunities, to strengthen our traditional businesses, and going beyond being a bank to becoming a platform that enriches the lives of all customers that it serve,” he said.

    GTB posted N165 billion Profit Before Tax (PBT) in its audited financial results for the year ended December 31, 2016.

    A review of the results showed positive performance across all financial indices, reaffirming the bank’s position as one of the most profitable and well managed financial institutions in Nigeria.

    Gross earnings for the period grew by 37 per cent to N414.62 billion from N301.85 billion reported in the December 2015 review period. The performance was driven primarily by growth in interest income as well as foreign exchange income, Agbaje said.

    He said the bank’s non-performing loans remained low and within regulatory threshold at 3.66 per cent, with adequate coverage of 131.79 per cent. Increase in collective impairment was borne out of the prudent stance of the Bank, while Capital remains strong with CAR of 19.79 per cent.

    On the backdrop of this result, Return on Equity (ROAE) and Return on Assets (ROAA) closed at 35.96 per cent and 5.85 per cent. The bank is proposing final dividend of 175 kobo per unit of ordinary share held by shareholders in addition to interim dividend of 25 kobo per unit of ordinary share,  thus bringing total dividend for 2016 financial year to N2 per unit of ordinary share.

    Agbaje, said: “The bank’s financial performance in 2016, does not only reflect the resilience of our franchise, it demonstrates the fundamental strength of our businesses to deliver sustainable long-term growth.

    “We successfully navigated the heightened economic uncertainty and regulatory headwinds which dominated the year to deliver a solid performance across all financial and non-financial indices”.

  • UBA profit after tax hits N72b

    UBA profit after tax hits N72b

    •Shareholders to get 55 kobo per share

    United Bank for Africa (UBA) Plc, a pan-African financial services group operating in  19 African countries,  has released its audited 2016 full year results.

    In the results released at the weekend at the Nigerian Stock Exchange (NSE), covering the period January to December, the group earned N91 billion as profit before tax.

    This is 32 per cent higher than N68 billion profit recorded over the same period in 2015.

    Its profit after tax grew by 22 per cent to N72 billion, from N60 billion recorded the previous year.

    A statement from the bank said the results showed a significant growth in the group’s gross earnings and profits – “an attestation to its resilience, enhanced productivity and geographic diversification, evident in the impressive contribution from its African subsidiaries”.

    The group recorded a 22 per cent growth in gross earnings to N384 billion, as at December  2016, from N315 billion at the end of the 2015 financial year.

    This illustrated the bank’s ability to grow profitability despite the difficult macro-economic environment.

    In addition to the rising adoption of electronic banking channels in many of the African markets, where UBA operates, the bank leveraged its strong franchise and geographical footprint.

    The performance was buoyed by considerable growth in both  interest and non-interest income, as well as increasing efficiency gains from cost management initiatives.

    The statement said: “UBA’s subsidiaries outside of Nigeria are increasingly gaining market share, reinforcing the strong and impressive subsidiary contribution to the group, estimated at one-third of profit in 2016, from a quarter in 2015 financial year.”

    Following the performance, its Board of Directors proposed a final dividend of 55 kobo, subject to the approval of the shareholders at the forthcoming Annual General Meeting, scheduled to hold on April 7, at the Eko Hotel and Suites in Lagos.

    The bank had earlier paid an interim dividend of 20k to shareholders, bringing the total dividend for the 2016 financial year to N0.75, an unprecedented yield of 13.9 per cent, based on the stock’s unit price of N5.39 on the floor of the NSE.