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FG To Earn N2.5b Daily From N50 Bank Charge - Business - Nairaland

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We Have Invested $8.5b In Nigeria - World Bank / Computer Village Adds N1.5b To Nigeria’s Economy Daily / Govt May Earn N2.5b Daily From Stamp Duties (1) (2) (3) (4)

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FG To Earn N2.5b Daily From N50 Bank Charge by joeprince23(m): 8:01am On Jan 26, 2016
• Stakeholders differ on CBN’s N50 charge

• Utomi cautions against depressing consumption, growth

OVER 50 million active accounts in the banking sector will be enlisted in the new revenue drive of the Federal Government with the takeoff of the N50 stamp duty on financial transactions.

The Central Bank of Nigeria (CBN) has already communicated the commencement of the N50 stamp duty deduction on receipt of financial value of N1000 and above from bank accounts to financial institutions.

However, only transfers from personal account to another personal account, both at the same bank or another bank are exempted from the charge.


With the act already in force, there are projections that the total number of direct cash lodgements in various accounts in banks, the transfer of cash arising from Point of Sale, Automated Teller Machines and mobile money transactions, among others, may hit 50 million in volume per day, with an estimated value of about N2.5 billion daily.

The recently concluded phase of the Bank Verification Number (BVN) project had identified 22 million unique identities in bank accounts, which own over 30 million other accounts spread across the banking sector.

According to the CBN, the stamp duties are deductible on deposits into accounts and borne by the receiving accounts. Yet, another reliable source in the banking sector argued that the revenue earnings capacity of the stamp duties – when estimated moderately, given the improved payments system environment of the country, both in public and private sectors of the economy – shows that there will be no fewer than 25 million deductible transactions per day, which will amount to N1.25 billion daily.

While expressing optimism on the potential return of effective taxation, a professor of entrepreneurship and political economy, Pat Utomi, told The Guardian that there would be the need for caution to ensure that the pace of tax expansion does not depress consumption and growth.

“Nigeria,” he said, “has a challenge with no easy answers. For a long time, oil receipts made taxes an irritation to those who govern. The result was that the citizen was disconnected from holding the public official accountable. Costs in government went crazy. As oil revenue declines and taxation is rediscovered, the needful will be challenged in two directions.

“In one direction, from policy makers we must take care in ensuring the pace of tax incidence expansion does not depress consumption and growth. Still, the financing gap needs to be bridged by an optimal level of borrowing and new taxes.”

Utomi continued: “At the same time, deep cost-cutting in a wasteful system needs to be implemented. In the other direction, citizens need to know that a return of dependence on taxation for governing will reduce uncertainty in the budget process. When Value Added Tax (VAT) was introduced years ago there were issues raised about it but it has been a useful tax.”

The Managing Director and Chief Economist, Africa Global Research, Standard Chartered Bank, Razia Khan, said the N50 stamp duty enforcement was necessary, given the urgent need to drive higher revenue collection of the country. He said there was no foreseeable “detrimental effect on financial access in the long-term.”

Stakeholders have also commended the move, advising however, that to get the best of the policy, the authorities should strengthen the payment system to ensure that most transactions in the economy are routed through the banking system.

According to the Head of Investment Research at Sterling Capital Limited, Sewa Wusu, the move is legal and now adopted due to the circumstances the country is going through, which have heightened macroeconomic issues.

“This is another fiscal strategy to meet budget spending. Transactions are going on everyday in the financial system and this is the more reason to believe that the Nigerian economy is capable of financing itself. Though some will complain, but for me, this is a fiscal response. The act has been there and this shows that there are other opportunities in the economy. This type of law is also obtainable in other jurisdiction.

“No matter what pains we may feel from this policy, we can take it in good faith, at least as a sacrifice to the nation. N50 is money, but it is not too much to pay,” he said.

On his part, Shehu Mallam Mikail, the National President of Constance Shareholders’ Association of Nigeria, in an electronic mail to The Guardian, said although Nigerians would ordinarily expect a more vibrant tax regime, a flat N50 flat charge on any receipt whatsoever from third-party deposits or transfers would work against the spirit of the apex bank’s banking inclusion policy.

“These charges will not encourage Nigerians to have interest in the banking system any longer because people will prefer to do their transaction on cash basis without going to the bank. Moreover, the cashless policy will no longer be effective leading to low-profit margins for banks.

“Therefore, government is now saying that Nigerians should not imbibe the culture of banking. Low-income farmers and artisans might not bother about using the banking system when it comes to financial transactions. If bankers are no longer getting enough inflow of currency transactions, how can there be a dividend for shareholders of banks?”

Mikail posited that should the stamp duty be implemented the way government wished to go about it, it should have been a flat rate charged on yearly basis.

“I am worried about the interest of Nigerians in the banking system, operators’ drive for customers and returns for shareholders in the sector through enhanced economic activities,” he said.

A civil society activist, Jide Ojo, also agreed that the enforcement of the stamp duty law is a welcome development, but only raised concern about the remittances of the deducted values.

“Will the banks pay these N50 deductions to the coffers of the Federal Government? It should be noted that government is having serious issues getting organisations collecting Value Added Tax on its behalf to remit the five per cent collected to government.

“Transparent and accountable mechanisms must therefore be in place so that the public is duly informed about income from this source and what it is being used for. There should also be adequate sensitisation of the banking public on this law,” he said.

The Executive Director, Corporate Finance, BGL Capital Limited, Femi Ademola, affirmed that the stamp duty has a legal backing by the Stamp Duty Act of 2004, noting that it is just that Nigeria has not been enforcing most of the revenue generating laws and thus, not collecting the necessary revenue.

“Although the amount of N50 per transaction appears to be small, the cumulative total of revenue in a year could be very significant. It is estimated that over 400 million banking transactions through Automated Teller Machines (ATMs), Over The Counter (OTC) cash transactions, POS and Internet transfers took place in 2014. Since half of that involves receipts of money, we could infer that a sum of N10 billion could be generated from banking transactions alone this year,” he said.

On the immediate impact of the enforcement, he admitted that it could negatively affect the financial inclusion and cash-less policy of the Central Bank of Nigeria (CBN).

“This is because the bulk of banking transactions are below N100,000, according to the CBN. A further analysis could show that the largest proportion of the transactions is between N1,000 and N10,000 to which a charge of N50 per transaction could be significant. This would, therefore, mean that a large population of the people that we are trying to include in the formal financial system may be discouraged from using the banks.

“However, we must understand that tough times require tough measures as the enforcement of the stamp duty is necessary and also legal. Like it has been said at so many forums, managing Nigeria through the current crisis is not the responsibility of the government alone.

“We, the citizens, all have to contribute to our economic survival. Due to the prolonged oil price decline, our economic stability is being threatened. To survive the current crisis will require very painful decisions to be made and implemented and the pain will be felt across board,” he said.

Already, CBN has opened an account with the name “CBN NIPOST Stamp Duty Account No. 3000047517” where banks will offload the total monthly deductions from a designated account operated by respective banks.


http://www.ngrguardiannews.com/2016/01/govt-may-earn-n2-5b-daily-from-stamp-duties/

3 Likes 1 Share

Re: FG To Earn N2.5b Daily From N50 Bank Charge by kossyablaze(m): 8:07am On Jan 26, 2016
Dats huge!Buhari is milking us dry.Chai!
Hypocrisy is wen u voted bubu buh u r here to complain!I wish u a romp wit thunder dis nyt

71 Likes 5 Shares

Re: FG To Earn N2.5b Daily From N50 Bank Charge by ORACLE1975(m): 8:08am On Jan 26, 2016
Ho
Re: FG To Earn N2.5b Daily From N50 Bank Charge by MinorityTribe: 8:11am On Jan 26, 2016
Abeg o i be student. So if my popsman send N3000 and you deduct N50, Banks too deduct their own share wetin go remain? And you know you must leave some certain amout of money in the bank(You can't redraw everything). Also the lowest i can redraw is N500. Out of N3000 na only N2000 i go fit redraw o. Make una pity students na. Unless you want to use the N2.5b Daily for the students.

76 Likes 6 Shares

Re: FG To Earn N2.5b Daily From N50 Bank Charge by MinorityTribe: 8:16am On Jan 26, 2016
“Although the amount of N50 per transaction appears to be small, the cumulative total of revenue in a year could be very significant. It is estimated that over 400 million banking transactions through Automated Teller Machines (ATMs), Over The Counter (OTC) cash transactions, POS and Internet transfers took place in 2014. Since half of that involves receipts of money, we could infer that a sum of N10 billion could be generated from banking transactions alone this year,”
God punish una N50 no small o. Especially when you want to redraw the small amount of money in your bank.

#BringBackOurN50

49 Likes 2 Shares

Re: FG To Earn N2.5b Daily From N50 Bank Charge by scribble: 8:17am On Jan 26, 2016
If you voted APC and come here to complain, the thunder that will fire you is in an ISIS training camp


Mofos

214 Likes 16 Shares

Re: FG To Earn N2.5b Daily From N50 Bank Charge by omenka(m): 8:18am On Jan 26, 2016
I have faith the money would be used judiciously and not embezzled in such a brazen and callous manner as witnessed in previous admins.

For all those who would flood here to throw tantrums, do this little math:

Your Hero was taxing Nigerians over 30 naira per litre of fuel. If you buy just 2litres, you've been "taxed" 60 naira. Do an estimate of the amount the government was making with regards to out total daily consumption- that was what they were realising under the phantom SURE-p. Pray tell, what exactly did they do with all that money??

Can't wait for a comprehensive probe of that programme- I'm sure we'd stumble on another gargantuan "gate".

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Re: FG To Earn N2.5b Daily From N50 Bank Charge by PAINGAIN: 8:21am On Jan 26, 2016
Na wao. Over 2billion a day if there r 50million transactions or atleast over 1billion if its 25million transactions per day. This one is more than one chance walahi. This one is done. Now unto the next phase which is finding more ways to milk nigerians dry. Buhari will make sure nigerians pay dearly for rejecting him for 12 years and wasted his money. Now its payback time. My only consolation is that his gullible supporters will also pay the 50 naira. Una never chin chum chin.

35 Likes 2 Shares

Re: FG To Earn N2.5b Daily From N50 Bank Charge by joeprince23(m): 8:22am On Jan 26, 2016
This is even an illegal stamp duty...

4 Likes 1 Share

Re: FG To Earn N2.5b Daily From N50 Bank Charge by Idrismusty97(m): 8:22am On Jan 26, 2016
So long as it is used effectively no problem. By the end of this administration, After all the loopholes are properly blocked, TSA is effectively utilized, Wastage eliminated and our Tax system is in standard like in developed Nations. Nigeria will come to appreciate and realized how much more revenue we could have been making yearly.

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Re: FG To Earn N2.5b Daily From N50 Bank Charge by Proudlyngwa(m): 8:25am On Jan 26, 2016
Even though I believe this policy should be scrapped, as it will have negative effects on small and medium scale enterprises using the cashless mediums, it is a policy that was brought up in the last administration so stop blaming APC



MOFO

7 Likes 1 Share

Re: FG To Earn N2.5b Daily From N50 Bank Charge by Nobody: 8:25am On Jan 26, 2016
This is just the beginning!!! Buhari is just starting, welcome to change,

9 Likes

Re: FG To Earn N2.5b Daily From N50 Bank Charge by catchfun: 8:25am On Jan 26, 2016
The Central Bank of Nigeria says the recently introduced N50 stamp duty for all deposit transactions will not be collected for Payments of salaries and wages as well as payments and deposits for self-to-self transactions whether inter or intra bank.
This clarification was made in a statement sent out by the Director Corporate communication of CBN, Mallam Ibrahim Mu'azu yesterday January 21st.
The management of the apex bank had on Monday January 19th sent out a circular to all Deposit Money Banks and Other Financial institutions titled, "Collection and Remittance of statutory charges on receipts of Nigeria Postal Service under theStamp Duties Act”, mandating it to collect N50 stamp duty for deposit transactions.
The N50 stamp duty is being introduced to help increase the tax revenue of the Federal government. Part of the statement released by the CBN Director of Corporate Communication's reads “The implementation of the Stamp Duty at this point in time emanated from a Federal High Court order that the CBN should direct deposit money banks under its supervision to commence the collection of the duty on behalf of the federal government.
Consequently, the money deposit banks have been directed to commence the collection of the duty. Banks are to collect the N50 stamp duty and remit same to the Nigerian Postal Services (NIPOST) on behalf of the customer.
The N50 stamp duty is charged per transaction and NOT per volume. Hence, irrespective of the amount, the sum of N50 is to be charged provided such a transaction is N1,000 and above. There are however some exemptions and these include payments of salaries and wages, payments and deposits for self-to-self transactions whether inter or intra bank among others,’’ the statement said
.
Re: FG To Earn N2.5b Daily From N50 Bank Charge by Segadem(m): 8:27am On Jan 26, 2016
what
Re: FG To Earn N2.5b Daily From N50 Bank Charge by ckmayoca: 8:30am On Jan 26, 2016
So how N50 is to be used for una furniture allowances every year while we use 1 chair for 6 yrs and more, our N50 is to be used for thier clothing allowances, exortic vehicles and other while we drive one car for 7yrs. It is well God is watching and he will punish all of them with stroke and funny death at the end.

19 Likes 1 Share

Re: FG To Earn N2.5b Daily From N50 Bank Charge by mrvitalis(m): 8:31am On Jan 26, 2016
For me I think our VAT is to small increase it to say 15% let Nigerians know that it is there money the government is spending
So on the next election u won't want to vote ur brothers or sister that would waste ur money
Or vote a person for #5000 cos u know what I would spend on government is more than that
This things are good... It would make the masses ask questions and the government to sit on there toes

18 Likes 1 Share

Re: FG To Earn N2.5b Daily From N50 Bank Charge by emamos: 8:33am On Jan 26, 2016
PAINGAIN:
Na wao. Over 2billion a day if there r 50million transactions or atleast over 1billion if its 25million transactions per day. This one is more than one chance walahi. This one is done. Now unto the next phase which is finding more ways to milk nigerians dry. Buhari will make sure nigerians pay dearly for rejecting him for 12 years and wasted his money. Now its payback time. My only consolation is that his gullible supporters will also pay the 50 naira. Una never chin chum chin.

3 Likes 1 Share

Re: FG To Earn N2.5b Daily From N50 Bank Charge by peacengine(m): 8:33am On Jan 26, 2016
Na to keep my money for safe be Dat na, nobody go chop my moni any how

3 Likes

Re: FG To Earn N2.5b Daily From N50 Bank Charge by peacengine(m): 8:36am On Jan 26, 2016
Proudlyngwa:
Even though I believe this policy should be scrapped, as it will have negative effects on small and medium scale enterprises using the cashless mediums, it is a policy that was brought up in the last administration so stop blaming APC



MOFO

Were they forced to implement it?

17 Likes 1 Share

Re: FG To Earn N2.5b Daily From N50 Bank Charge by demarc001: 8:44am On Jan 26, 2016
Buhari go be like #chai! Too much money money for My Side!#

4 Likes 1 Share

Re: FG To Earn N2.5b Daily From N50 Bank Charge by Captain1Nigeria(m): 8:44am On Jan 26, 2016
change kenan

2 Likes

Re: FG To Earn N2.5b Daily From N50 Bank Charge by Firefire(m): 8:49am On Jan 26, 2016
This is pure wickedness from the administration of Buhary and APC, what manner of "EVIL CHANGE" is this ?

12 Likes 1 Share

Re: FG To Earn N2.5b Daily From N50 Bank Charge by Proudlyngwa(m): 8:59am On Jan 26, 2016
peacengine:


Were they forced to implement it?
That is why am asking for a review. They must not carryover every policy from last administration
Re: FG To Earn N2.5b Daily From N50 Bank Charge by ERAKAMUS: 8:59am On Jan 26, 2016
USELESS ILLITERATE/DULLARD GOVERNMENT.
VERY PATHETIC!

5 Likes

Re: FG To Earn N2.5b Daily From N50 Bank Charge by drshrewd: 9:14am On Jan 26, 2016
very creative policy with minimal burden yet with so much return____close to a trillion naira a year. trust Buhari to utilize those monies unlike my stealing is not corruption brother grin

14 Likes 1 Share

Re: FG To Earn N2.5b Daily From N50 Bank Charge by talktimi(m): 9:30am On Jan 26, 2016
1. Buhari's website - N800M
2. C-caution and fire extinguishers for cars - N27M
3. Hair cuts - N78M
#BudgetofChange. @Amaka_Ekwo

30 Likes 2 Shares

Re: FG To Earn N2.5b Daily From N50 Bank Charge by Basildvalour(m): 9:37am On Jan 26, 2016
MinorityTribe:
Abeg o i be student. So if my popsman send N3000 and you deduct N50, Banks too deduct their own share wetin go remain? And you know you must leave some certain amout of money in the bank(You can't redraw everything). Also the lowest i can redraw is N500. Out of N3000 na only N2000 i go fit redraw o. Make una pity students na. Unless you want to use the N2.5b Daily for the students.
Just tell whoever is paying the money in for you to use your name as the depositor and register the transaction as SELF

15 Likes 3 Shares

Re: FG To Earn N2.5b Daily From N50 Bank Charge by drshrewd: 9:37am On Jan 26, 2016
scribble:
If you voted APC and come here to complain, the thunder that will fire you is in an ISIS training camp


Mofos

so I should have voted for this criminal sad

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