The Nation Newspaper

Tag: Tax

  • FIRS shuts two firms over N884 million tax debt

    FIRS shuts two firms over N884 million tax debt

    The enforcement team of the Federal Inland Revenue Service (FIRS), yesterday, shut the premises of AOP Logistics Limited, at Breweries new site area, Ibadan. The firm has a tax debt profile of N863, 188,498.00. The enforcement team leader said the premises of the firm will not be re-opened until it pays up it tax debt accumulated between 2007 and 2011.

    A senior staff at the haulage firm, who refused to disclose his name, said the firm had been making some tax payments to the FIRS. He, however, failed to provide prove of such payments.

    The FIRS team was also at Markfina International Limited at Kilometre 9, Kulodi, New Ife Road, Ibadan. The staffers of the firm, which is owing N21, 183, 020.95, were ordered out of the premises.

    Mr. Ayodele Oluwalekan, a management staff of the frm, told the FIRS team that the firm has not been able to pay what is owes because it stopped operations for a while, an explanation that did not impress the FIRS team leader, who ordered the premises sealed.

  • GTBank posts N165b profit before tax

    GTBank posts N165b profit before tax

    Guaranty Trust Bank Plc yesterday posted N165 billion profit before tax (PBT) in its audited financial results for the year ended December 31, 2016 to the Nigerian and London Stock Exchanges.

    A review of the results shows 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. The performance was driven primarily by growth in interest income as well as foreign exchange income.

    Profit before tax stood at N165.14 billion, representing a growth of 37 per cent over N120.69 billion recorded in the corresponding period of December 2015. The bank’s loan book grew by 16 per cent from N1.373 trillion recorded as at December 2015 to N1.590 trillion in December 2016 with corresponding growth in total deposits which increased by 29 per cent to N2.111 trillion from N1.637 trillion in December 2015.

    The bank’s balance sheet 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.

    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 Capital Adequacy Ratio of 19.79 per cent.

    Its Managing Director/CEO Segun 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.

    “We are transforming our organisation into a platform for enriching lives by positioning ourselves at the centre of an extended ecosystem that offers our stakeholders, benefits beyond banking.

  • Zenith declares N129.65bn profit after tax in 2016

    Zenith declares N129.65bn profit after tax in 2016

    Zenith International Bank Plc has declared a profit after tax of N129.65 billion and a final dividend of N1.77 per share for the financial year ended December. 31, 2016.

    This is contained in the company’s audited result report released by the Nigerian Stock Exchange (NSE) on Monday in Lagos.

    The News Agency of Nigeria  (NAN) reports that this was in contrast with N105.66 billion posted in the preceding period of 2015.

    The profit represented an increase of 22.7 per cent when compared with figures for 2015.

    Its profit before tax stood at N156.75 against the N125.63 billion declared in 2015.

    The bank’s gross earnings grew by 17.4 per cent to N507. 99 billion compared with N432.54 billion recorded in 2015.

    Its non-interest income increased by 45.9 per cent to N25.59 billion due to an 809 per cent  increase in foreign exchange revaluation gains of N25.6 billion, this however, declined by 10 per cent  from the N8.2 billion reported in nine months of 2016.

    The impairment loss on financial assets rose significantly by 106.4 per cent to N32.35 billion in 2016 and 34.6 per cent  based on quarter-on-quarter to N10.2 billion in the fourth quarter of 2016.

    NAN reports that the board of directors proposed a final dividend of N1.77 per share to all its investors against a final dividend of N1.55 per share paid in 2015.

    The bank had earlier in 2016 paid a sum of 25k as interim dividend, bringing the total dividend in 2016 to N2.02 per share against N1.80 per share declared in 2015.

    NAN  also reports that Zenith Bank is the first bank to declare its 2016 audited result. (NAN)

  • Tax evaders versus magistrates in Gombe

    Tax evaders versus magistrates in Gombe

    Gombe State Governor Ibrahim Dankwambo’s tax sermons are not enough; magistrates will soon be deployed across the state to drive the point home, reports VINCENT OHONBAMU

    Soft words have been used by no less a person than Governor Hassan Dankwambo to win the people over. But that may not be enough. The firm and undiscriminating arm of the law will grab anyone who fails to give to Gombe State what belongs to it. That is how the state government intends to get residents to embrace its new tax regime.

    Selling a new tax plan to people is not the easiest of tasks. In Gombe a fresh tax policy, meant to augment dwindling and irregular federal allocations, was greeted with apprehension and speculations that the government was about making life even tougher for the people.

    This forced the governor to not only dispel the rumours but also explain the necessity of the new tariff.

    Governor Dankwambo said the new tax was part of his reform plan begun some months back. He was speaking at the launch of the Internal Revenue Central System (GICS) and the takeoff of the e-Enumeration of Tax Payers in the informal economic sector (IES) to monitor the collection of revenue.

    Dankwambo said, “Introduction of the reforms is not meant to impose fresh taxes or hardship on the citizenry. Rather, it is intended to ensure that the people of Gombe State are taxed, and the revenue generated does not end up in the hands of rogue revenue collectors.

    “Similarly, it is expected to make revenue collection and management more efficient,” he explained, urging everyone in the state to pay tax promptly.

    He threatened to deal with those evading tax as well as those obstructing the operations of the state Board of Internal Revenue.

    He said that government had articulated a new law for the board, which was before the state House of Assembly to strengthen the Board’s operations as well as regulate and support the new tax regime in the state.

    When enacted, he added, magistrates would be deployed to each of the 11 local government areas of the state to try those guilty of non-compliance with the revenue laws of the state.

    “We cannot aim at tax-driven prosperity and economic advancement while refusing to fulfil the obligations that create those standards. Anyone who evades or avoids tax is breaking the law and will be treated according to the provisions of the relevant laws if found guilty,” he said.

    Chairman of the Gombe State Board of Internal Revenue Service (GSBIRS), Muhammadu Adamu Damji further explained that the new revenue collection and monitoring system would capture the data of everyone online, while repositioning the state to be economically viable to withstand the challenges facing the state economy.

    In the past revenue system used by the Gombe State Board of Internal Revenue for IGR was the collection of cash and the issuance of receipt as a sign of collection and payment.

    But that method according to the GSBIRS boss had been abused by both the payers and collectors, where collectors remitted whatever they liked, the revenue payers paid whatever they felt like. Most revenue collection officers had multiple receipts (depending on the awareness level of individual payers) with which they swindled, manipulated and manoeuvred unsuspecting taxpayers and government with impunity.

    In the same vein, revenue-generating ministries, department and agencies (MDAs) did not remit collections accurately and promptly, even as collecting banks delayed in remitting collections to government coffers. Even the pre-Damji Revenue Board lacked efficient checks and balances.

    This, the government said was unacceptable; hence the commencement of the journey to block these channels of revenue wastages and galvanise productivity of fallow grounds.

    The Gombe state government then embarked on some reforms to reposition the board and make it more effective, innovative and efficient to increase the internally generated revenue of the state by restructuring of the Gombe State Board of Internal Revenue.

    The journey began with engaging the Independent Corrupt Practices and Other Related Offences Commission (ICPC) to conduct a diagnostic review of the board and made recommendations on operations, processes and human resources.

    The appointment of Adamu Damji who has since August 2016 trained about 200 staff, followed by the new tax laws, the eventual introduction of GICS and the commencement of the e-enumeration of tax payers are products of ICPC recommendation, which will enable the government, know who is paying what and when.

    The automation of the new system is said to make revenue collection transparent,with monitors displaying who what and when, among other things.

    Still, some will try to hold back their tax. These are the people that will have the magistrates to contend with.

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  • A case for tax in Kwara

    Transition Implementation Chairman (TIC), Ilorin West council of Kwara State, Alhaji Abdul-hameed Alli has urged residents of the council to pay their tax promptly.

    Journalist-turned politician said this would bring development to the door steps of the people.

    Alhaji Alli said this at the launch of this year’s maternal and child health week in Oko-Erin ward in Ilorin, the state capital.

    He said that “like this programme now, it was derived from our internally generated revenue (IGR). So if people are paying their taxes we should be able to recoup that back into the society. So you will never hear me say that there is no money. Other people would have been hiding under the platform of paucity of funds. The magic wand of my success is sincerity to serve.

    “I urge the beneficiaries to make use of the opportunity. Secondly, they should also support the government by paying their taxes. It is those that have paid that we have used their money to touch lives; they should see that this government is a very sincere one that is willing to assist at all times.”

    He continued that: “This is actually the second place we are doing it. The first one was done by my wife at Pakata Health centre, but because of the uniqueness of Ilorin West local government and for the project to get to the grassroots i find it important to launch it here as advised by the health department of the council.  Just after this, all the 12 wards in the council will benefit from this.

    “I have always been proud to be a journalist. We see and write to put public office holders on their toes. So we won’t want to be criticised. I adopt the policy of a good listener. Like the lady that attested to my achievements. I got a call that on a particular night they rushed a patient here and it was so bad that they had to use lantern to attend to the patient. It was a deplorable situation.

    “On the 50th birthday of Governor Abdulfatah Ahmed’s wife, Omolewa I instituted Omolewa Health Scheme during which went around some hospitals assisting some with health challenges. At the end of the day we came here and based on their earlier request a brand new generating set was handed over to them.”

  • RMAFC endorses new tax policy

    RMAFC endorses new tax policy

    The Revenue Mobilisation Allocation and Fiscal Commission has endorsed the new National Tax Policy announced by the Federal Government.

    The new policy will shore up Nigeria’s dwindling revenue base, which suffered a decline as a result of the shortfall in international oil prices and militancy in the Niger Delta.

    A press statement signed by RMAFC’s spokesperson, Mr. Ibrahim Mohammed, explained that the Commission remained committed to efforts at boosting government’s revenue.

    The statement read: “The Commission reiterated its support for initiatives such as the newly introduced revised tax policy which would go a long way in boosting the nation’s revenue base for sustainable national development.”

    Commending the Federal Government’s bold and courageous step, the Commission said “globally, taxation was seen as the most stable source of government revenue for economic development, the upward review of the existing Value Added Tax (VAT) rate on luxury items, as contained in the New Tax Policy has buttressed its position.”

    Apart from the upward review of the VAT rate on luxury items, RMAFC also urged the Federal Government to support all monitoring agencies including RMAFC to enhance collection efficiency, block leakages in revenue collection and strengthen intelligence gathering mechanisms so as to free more funds for governments to expand the economy, ensure rapid economic development and create employment.

    The Acting Chairman of RMAFC, Shettima Umar Abba Gana, had in last July canvassed the upward review of VAT from five per cent to about 7.5 per cent in order to improve the country’s revenue base.

  • Corporate organisations make case for tax in Kwara

    High net-worth individuals (HNIs) and corporate organisations have met with Kwara State Governor Abdulfatah Ahmed, making suggestions as to how tax collection and payment can benefit everyone in the state.

    The event dubbed “Breakfast meeting with Governor Ahmed,” was organised by the state Internal Revenue Service (KW-IRS). The occasion afforded the organisations and HNIs to bare their minds on the activities of tax consultants employed by KWIRS.

    The stakeholders agreed that tax payment is a necessary and sufficient condition for infrastructural growth, but urged the state government to ensure judicious use of revenue from tax through provision of necessary infrastructure.

    KW-IRS at the forum revealed that it raked in N17.4 billion as the state internally generated revenue in 2016 as opposed to N7.2 billion in 20l5.

    Executive chairman, KW-IRS, Dr Muritala said that that the feat was a justification of the vision of the governor to transform the revenue generation process in the state.

    “In appraising our 2016 revenue generation we realise that there are so many things tied to generation and because the government has played its part the corporate organisations are expected to play their role,” the former university teacher said.

    He also hinged the success of the service to the cooperation of and support of tax payers in the state.

    Commenting on the state government’s drive to improve IGR, Proprietor, Fossil Oil Nigeria Limited, Brigadier-General Saliu Bello (rtd) said hitherto the state was being administered with the money coming from the federation account.

    The retired general added that the dwindling allocation from the centre informed the state to look inwards on how to generate revenue internally.

    “I urge the governor to create a forum for frank interaction with the stakeholders on how to move the state forward. We will tell you the truth. Politicians will sing your praises and say awful things behind you,” he said.

    Also speaking, Chairman, Mount Olives Nigeria Limited, Ajibola Ademola beseeched the state government to grant tax incentives through tax holidays to some companies that default in their social responsibility.

    Governor Ahmed said, “Taxation is very necessary…Any state or local government that has not woken up to know that internally generated revenue (IGR) is the in-thing will not see physical and infrastructural development. Money for human capital development and infrastructure can only come from IGR.”

  • Bear tax

    •Will states that forbid alcohol have the courage to reject tax revenue?

    The question of tax in a polity or community is not always about the citizen’s obligation to the state. Sometimes, it is also about the state’s fidelity to its values. When a state holds dear a set of ideas or vision, it must, at a certain time, choose between those values and the pecuniary advantage. It is the moral equivalent of opportunity cost.

    Such an issue came to the front burner when former Vice President Atiku Abubakar said that states that do not have alcohol tax should not benefit from it. It was a bold statement in a country of religious sensitivity, but it was also a challenge to faith and conscience.

    The former vice president was also pointing out a fundamental flaw in our federal arrangement where the centre does not take cognizance of local content in framing its laws and obligations.

    The sensitivity of alcohol may have been mentioned perfunctorily in a speech he delivered titled, “Nigerian federalism: continuing quest for stability and nation-building.” Yet, he knew only a cursory reference to alcohol was weighty enough for a headline.

    Hear him: “If a state is opposed to cattle tax, or bicycle tax or alcohol tax, for instance, it should not expect to share in the tax proceeds from those items.”

    A great swath of the 19 states in northern Nigeria does not accept the consumption of alcohol in a legal way. This is driven by a belief that it as iniquity. But what Abubakar said had little to do with a moral judgement as to whether it is right or wrong to consume alcohol. The answer to that is purely religious and has no basis in the constitution that assures us freedom of worship.

    It is the secular segment of it that the former vice president adverted to. That means you cannot say you want to enjoy what you condemn.

    The justice of the assertion makes sense in the context of regions like the oil-producing states that have quarrelled over being short-changed in revenue accruals even though they give us the bulk of our income. They get 13 per cent of the federal allocation even though they give the country 100 per cent of what they produce.

    Yet, those who gain from alcohol tax, disavow it but are not shy to reap where they did not sow. In what is called the prohibition era in the United States when alcohol was banned, it thrived in the underground, and those who profited, the bootleggers, trafficked actively in the illegal trade. It is just the same thing today with marijuana. States in the United States as well as in Nigeria do not earn tax revenues from the reefs because they have declared its consumption illegal.

    A state like Colorado has derived tremendous income from legalising the drug and it has led to immense migration to the state with its implication for employment and a plenitude of housing development.

    In areas of alcohol prohibition in Nigeria, we have high consumption but without the accompanying tax revenues. So, those who cannot tax should not benefit from the proceeds.

    This is crucial to the concept of a federal state. If, as Abubakar asserted, decisions are made from the federating units rather than the centre, even the states that forbid alcohol would not have the courage to ask from the billions of Naira that come from alcohol every month. He said, “states must agree with the Federal Government what items should be taxed, at what rate and how the proceeds are to be shared.”

    It has happened with oil. Will it froth over beer? And will the states have the courage to reject “sinful” money?

  • Ipaye: Fight corruption through effective tax administration

    Ipaye: Fight corruption through effective tax administration

    An effective tax administration system will help in the detection of economic crimes, Deputy Chief of Staff to the President, Mr Ade Ipaye, has said.

    According to him, in modern systems, tax administration is increasingly being used to detect corruption and other economic crimes in addition to enforcing tax laws.

    Ipaye taught tax law at the University of Lagos (UNILAG) before he joined the Lagos State Government as Special Adviser on Taxation and later served as Attorney-General and Commissioner for Justice.

    He spoke in Lagos during a dinner/lecture in honour of former Nigerian Bar Association (NBA) Lagos Branch chairman Mr Chijioke Okoli, who was conferred with the rank of Senior Advocate of Nigeria (SAN).

    The event was organised by “Friends of Chijioke Okoli” in collaboration with NBA Lagos Branch and an association of Igbo lawyers, the Otu Oka-Iwu (Law Society).

    Decrying tax evasion, Ipaye referred to a Joint Tax Board report which states that only about 10 million people are registered for Personal Income Tax in all the states, including the Federal Capital Territory (FCT).

    “Out of this, 4.6 million (or 46 per cent) are in Lagos State. If you juxtapose that against the 77 million workforce which the Nigerian Bureau of Statistics has declared to be in existence in Nigeria, you can clearly see how far down we are and how a sharp decline in the price and volume of our exported crude oil can be so devastating to the economy,” Ipaye said.

    Ipaye backed the view that a multi-agency approach to fighting tax and financial crimes, including corruption, is the best recourse for a government seeking to make corruption more difficult to hide.

    He said: “The rationale is quite simple. Tax examiners are often highly trained forensic accountants or auditors or financial investigators with an ability to follow money trails, whether legal or illegal.

    “They are, therefore, well-placed to detect and report unexplained increases in wealth or suspicious transactions that could constitute a bribe.

    “Furthermore, the proceeds of corruption are also, quite invariably, subject of tax evasion, and this correlation can help in law enforcement. In most cases, wealth acquired illegally would not have been subjected to tax, even though it is not tax exempt.

    “Thus, even where illegality is difficult to prove, tax evasion and money laundering are usually easy (The famous Chicago drug baron, Al Capone (Alphonse Gabriel) was convicted of tax evasion and sentenced to 11 years imprisonment even when it was difficult to prove his drug dealing and other criminal activities). This demonstrates the potentials of taxation as a means of checking corruption.”

    According to him, with greater cooperation between tax collection and anti-corruption agencies, tax examiners and inspectors can be placed in a better position to report suspicious activities to the relevant agency to take further action.

    Ipaye believes corruption in the tax system acts as a major hindrance to sustainable economic growth as it deters well-meaning and capable long-term investors, thereby killing industries before they become viable.

    “In this sense, corruption leads to the erosion of the future tax revenue base of a country, thereby impacting future tax revenue collection,” he said.

  • Reps to residents: stop paying tax to unlawful collectors

    The House of Representatives has advised residents of the Federal Capital Territory (FCT) to stop paying tenement rate and property tax to consultants, explaining that the body responsible for tax collection in the FCT has not been set up.

    While condemning the unlawful collection of taxes in the FCT, the lawmakers said the crude method employed by the so-called consultants was designed to extort money from residents.

    The House has directed its Committee on FCT to conduct an investigation into the matter as well as establish the reason behind the non-composition of the FCT Internal Revenue Board (FCTIRS) despite previous resolutions of the House to do so.

    The decision of the House followed the adoption of a motion by Emmanuel Oker-Jev (APC, Benue), who regretted that certain individuals have in various guises engaged in forceful collection of taxes and tenement rates without the consent of relevant authorities.

    According to him, the taxes and rates are arbitrarily collected by individuals brandishing forged court documents while threatening to lock up premises of defaulters

    Oker-Jev noted that such act was aimed at defrauding unsuspecting members of the public in these days of recession.

    “It is worrisome that the FCTIRS, the agency empowered by law to collect taxes and rates in the FCT has not been set up, thus allowing all manners of individuals to extort money from hapless law-abiding residents of the FCT,” he added.

    The lawmakers were unanimous in their condemnation of the illegality saying that a stop must be put to it immediately because to extort money from anyone in this period of recession is sheer wickedness.

    The lawmakers also noted that forcing residents to pay illegal taxes by the consultants, who were described as hawkers amounts to double jeopardy as the victims would have to pay such taxes again whenever the appropriate body is set up by the FCT administration.

    It was also noted by the lawmakers that extortion and forcefully locking up people’s businesses may lead people to self-help.

    The lawmakers advised that tax must be structured by relevant authorities saddled with the responsibility of tax administration and that Nigerians have the right to know who they are paying the tax to.

    The House also resolved that its investigation must also determine why the illegality has been been going on.