₦airaland Forum

The Director General, Michael Imoudu National Institute for Labour Studies, MINILS, in Ilorin, Kwara State, Issa Aremu, has criticised Kogi State government for using extra-judicial means to clamp down on Dangote Cement factory at Obajana, instead of seeking redress in law court.

“Consequently, he called for cessation of hostility between the two warring parties, particularly because of the massive employment the cement factory had generated for residents of the state.

Aremu observed that the alleged closure of the cement factory had severe implication for the company, which he described as one of the largest employers of labour.

Aremu stated this in an interview with journalists in Ilorin weekend, in commemoration of Decent Work Day earmarked by International Labour Organization, ILO, themed “Wage Justice”.

It would be recalled that some armed men, under the auspices of Vigilante group in Kogi State, had invaded Obajana Cement plant over alleged non-payment of taxes to the coffers of Kogi State government, injured some workers and eventually closed down the plant.“The MINILS boss believed that the claim over ‘decent work’ was a ruse without work in existence for prospective employees.

Aremu, who urged the Kogi State government to encourage industrialization in the state, called for amicable resolution of the misunderstanding that culminated in the closure of the cement factory.

He said: “Let me say that corporate organizations have the responsibility to pay their taxes but if you are found wanting for whatever reason, we should resort to legal and due process for the payment of those taxes and not to be using extra-judicial measures as reportedly used now in Kogi State to shutdown business plant.

“I think it is important that we do everything to encourage those who are creating jobs, and not to discourage them.

“You can’t even talk of decent work without work first because it is only work that is in existence you can make decent. But let me quickly express my concern and worry because I just read that last Wednesday, the Vigilante group of Kogi State allegedly stormed Obajana Cement Factory and from what I read, they wounded some of the workers.”

Obajana Cement is one of the biggest cement factory in Africa, owned by Dangote. I read that the problem is over alleged non-payment of some taxes to the state government. “”So, I want to call for cessation of hostility between Kogi State government and Dangote group. But unequivocally, the method being allegedly used is unacceptable. At a time we are re-industrializing, the best we can do is to encourage big industrializers, such as Dangote,” he said.“While expressing concern over the thousands of workers who are daily pushed into wage poverty globally, the MINILS Director General appealed to the government and employers of labour to increase employment opportunities for jobless youth.“Aremu, who applauded President Muhammadu Buhari for promoting decent work and pay for the nation’s public servants, said: “Interestingly, the theme for this year is wage justice. The idea of justice for wage earners is that workers should be well paid.

”There is a new statistics that has just come out that after COVID-19, the world has produced close to 573 new billionaires, yet millions of people have been pushed into poverty. As a matter of fact, about 700,000 workers are pushed into wage poverty almost everyday, while the world is turning out billionaires. So, this theme is very apt that there should be justice for the workers.“”I want to call on government and employers of labour to work towards increasing job opportunities for teeming youth who are looking for jobs. The way to do this is to encourage industrialization, promote value addition. We have to stop importation of goods that we can produce locally. Everytime we buy not made in Nigeria, we are actually exporting jobs.“”I want to commend Mr President for signing executive order 003, which says that in our procurement process, public agencies should patronize made in Nigeria.”“Aremu also said it was within the right of the federal government to register two other unions in the university system to join ASUU, particularly as that their applications had been pending for about ten years now.“He, however, cautioned ASUU against the excessive prolong of the strike, citing how the former Prime Minister of UK, Margaret Thatcher, broke the stronghold of the Mines union,which was the world’s strongest at that time. “He said: “You asked me about the registration of two other unions within the universities. First, my quick reaction to that is that convention 87 of the ILO which talks of freedom of association is very fundamental, Nigeria has ratified that, what the federal government did is to allow for freedom of other workers who want to freely associate.“”If you go to the office of the Registrar of Trade Union, there are many workers or group of workers who have applied for registration, so I think for me that is far more remarkable. What would have been a difficult issue is to say that a union has been proscribed .

”We have not seen that, they only allow for more freedom of association to allow for new entrant and you know it is nothing new.“”Before we use to have a monopoly labour center, known as the Nigeria Labour Congress, but later on TUC was allowed to be another labour center, you know, so I think when you talk about the core principles of descent work, it’s legitimate.

”Of course, we can also discuss why now? Is it because it is an attempt to undermine the struggle of ASUU? Again, this is academic, we can debate that I don’t know what your opinions are and what mine looks like but we must also check the records, and from what I heard from the Minister of Labour, he said as far back as five, ten years ago, this group of academicians have been looking for recognition based on their demand of their own association, so we can debate it.“”But what time is ripe, I am not sure, but again if you look at history, President Obasanjo registered TUC when he realized that NLC was giving his administration what he called unnecessary trouble, so he thought if he had a different labour center may be NLC will be moderated,we can debate it now, whether that has moderated labour over the years.

”But what is clear is that in the world of work, absolute power corrupts absolutely, I want to repeat that absolute power of employer will corrupt absolutely, just also absolute power of the union, so what is important is relative power and I think this development in the universities should be a source of sober reflection for all the parties to know that we can have a stable industrial relations if we operate in proportions.“”I am a strong believer and it is there in our labour laws, workers have the right to protect their interest through legitimate means, that include strike, protest but whatever option you have taken are not the end, they are just the means.“”Once we use strike opium in a way that it becomes a source of threat, not just to even your employer but even to some of your members, because whether you like it or not, some of these academicians who have been recognised are also part of the university community.“”I think something is wrong about the method we are using ,’you know I am caught in between. We should never opinionise industrial dispute, we should not opinionise, whether on the part of government or on the part of the union, we should see industrial dispute for what they are, temporary conflict that can be resolved through negotiation, through discussions.

”Whatever option we take should be things that can lead to sustainable industrial harmony. I want to share this with my ASUU comrades that addictive, endless strike you can do it but it has its consequences, and it is not just here.

”You know the Mine workers union in the UK, led by Arthur Kaddy and some of the most militant unions to have come from UK, Mine workers union when UK was under Margret Thatcher’s government.

”It employed hundreds of thousands of workers, very big industry, they wanted to go on strike, Thatcher said they should come to the negotiation table, they said no. That strike lasted close to two years, Thatcher stood her ground, she close the mining pits, and instead of using coal from UK, she was importing coal from South Africa and Poland.

”Today, there is nothing like Mine workers union again in UK, so what I am trying to say is that once absolute power may get absolute response from the government, industrial court has asked ASUU to suspend strike but ASUU said they are appealing.

”What I am saying is that let’s deploy methods that will not lead to the fragmentation of the labour union.“”How do you negotiate with people that you have already condemned; what I want to say is that this is Industrial conflict, not industrial war fare.”

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The documents demanded by the committee include the summary of petroleum profit tax; copies of tax returns filed by all JV ventures from 1990 to 2022; summary of all remittances to federation account of all tax revenues between 1990 to 2022; copies of correspondence between NNPC and FIRS tax remittances; summary of all remittances to federation account of all tax revenues between 1990 to 2022; and certified true copies of the various tax revenues accounts maintained or supervised by FIRS on behalf of the federation.

The FIRS delegation said the remaining records would be made available as they were archived.

According to the officials, the Service has a policy of archiving every six years, which was why the records from 1015 to 2021 were readily accessible when the committee demanded them.

A member of the House, Benjamin Kalu, however, decried that the archiving policy was restricting the mandate of the committee.

“It is restricting. I say so because if you look at the request from the letter, which is from 1990, and you are starting at 2015 based on the policy, we are losing about 25 years of inquiry.

“They must present this number of years wherever the documents are. We need those documents for us to conduct a thorough investigation. Let no excuse be given,” he said.

The Chairman of the committee, Abubakar Fulata, demanded that the records be made available by Friday. He also directed Nami to appear before the committee next Tuesday to speak to the documents submitted.

Fulata further directed that the chief executives of the various oil companies invited appear in person or face sanctions.

The hearing was adjourned to next Tuesday.
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The Civil Society Legislative Advocacy Centre has noted that insecurity and debt are among factors affecting the progress of the country.

CISLAC made this known in its SDG 16 report which was launched at the 77th United Nations General Assembly in New York on Tuesday.

While presenting the report, the CISLAC Executive Director, Auwal Rafsanjani, noted that some factors affecting Nigeria’s progress included debt, insecurity, corruption, amongst others.

A statement made available on Wednesday revealed that Rafsanjani, however, noted that the country had made progress in the policy areas of money laundering and asset recovery.

He said, “In this year’s report, CISLAC notes an improvement in two indicators as compared to three in 2021 and six in 2019.

“This improvement which can be seen in the policy areas of money laundering and asset recovery, is attributed to the passage and assent into law of the Money Laundering (Prevention and Prohibition) Bill and Proceeds of Crime Management Bill in May 2022.

“The Money Laundering (Prevention and Prohibition) Act 2022 aims to strengthen the powers of relevant agencies in dealing with challenges posed by money laundering by expanding the scope of money laundering in the prevention, prohibition, detection, prosecution, and punishment of offenders.

“The Proceeds of Crime Management Act 2022 aims to better manage recovered assets through the establishment of a central database as well as the establishment of directorates to manage recovered assets in various jurisdictions among other measures.”

CISLAC also decried the spate of insecurity in the country stating that insecurity has raised concern among citizens.

Rafsanjani added, “The worsening insecurity across Nigeria has raised concern among citizens. In addition to this, there is a high level of corruption amidst an increase in national debt.

“As seen on to the 2021 Corruption Perception Index released globally by Transparency International where Nigeria scored 24 out of 100 points which is its worst since 2012 when the methodology of the CPI was reformed.

“Another area to be concerned about is Nigeria’s revenue generation problem which has led to an enormous increase in borrowing.

“Official data has shown that Nigeria had a revenue of N1.63 trillion in the first quarter of 2022 which was not even enough to pay the debt of the country for that quarter which was at N1.94 trillion.

“The last factor which fights against tangible progress is the actions of the government against freedom of speech and freedom of the press. The fining of some media houses in August 2022 for the airing of messages on the security situation speaks to this matter.

“On the global Press Freedom Index released by Reporters without Borders, Nigeria fell nine places to 129/180 on the 2022 PFI as against 120/180 on the 2021 PFI.”

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The Federal Inland Revenue Service (FIRS) has said that its mandate is to collect taxes that are due to the federation and the Federal Government and not to grant waivers.

The Executive Chairman of FIRS, Muhammad Nami, stated this in a swift reaction to a news report on how some companies, including Dangote Sinotruck Limited, Lafarge and Honeywell were granted tax waiver on pioneer status to the tune of N16 trillion by the Service and the other Federal Government agencies.

A statement by the Special Assistant to the Executive Chairman, FIRS Media and Communication, Johannes Oluwatobi Wojuola, quoted Nami as saying: “FIRS does not have the power or responsibility of facilitating or even implementing tax waivers to investors in Nigeria. There are relevant agencies of government that are charged with such responsibility.”

He, however, noted that the Service is not unmindful of the objectives of granting tax waivers to investors, which he said include “helping to grow local companies, stimulate economic growth, and earn investors’ confidence”.

He said he was “confident that companies, which are now enjoying tax breaks will eventually exit shortly and begin to pay taxes to the Federal Government as is currently being done by the companies that have equally enjoyed such tax breaks in the past and are now paying taxes in hundreds of billions of naira.

“Such companies will continue to pay taxes to the government so long as they remain in business.”
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The 36 state governors in Nigeria, under the auspices of the Nigeria Governors’ Forum, have initiated a workshop on wedging tax leakages and improving their internally generated revenue.

The announcement came during the governors’ meeting yesterday, tagged, “the 8th IGR Peer Learning Event and Launch of the Nigeria Governors’ Forum Public Finance Database,” by the Chairman of the NGF and Governor of Ekiti State, Dr Kayode Fayemi.

Fayemi affirmed that the prominence of the workshop was to uncover strategies for improving tax generation for improved states’ revenue.

In addition, states’ internally generated funds rose by 35 per cent, from N1.31 trillion in 2019, to N1.67 trillion in 2021, and the governors announced the latest finance database that would facilitate the distribution of information on tax modification to enhance their internally generated funds.

In the same vein, the Southern Governors Forum, yesterday, said it was gladdened with the resolution of the 19 Northern State Governors and their monarchs, advocating the creation of state police to tackle the prolonged insecurity problems in the country.

Fayemi stressed that, “we have seen total IGR of states grow from N1.31 trillion in 2019, to N1.67 trillion in 2021, and the share of IGR, as a percentage of total recurrent revenue, grew from 31 per cent in 2019 to 35% in 2021. While this is good progress, we must not lose sight of the need to sustain and advance the momentum of reforms, considering the decline in FAAC receipts.”

Moreover, the governor recalled how it was decided as governors in 2019 to be frantic with the restructuring of well-organized and valuable tax management.

Continuing, he said general restructuring was centred on halting compound taxation expertise and contemporary revenue services, including acceptance of a taxpayer-centric background that will simplify taxpayers’ obedience, and support the accessible common agreement.

He also added that, “Beyond the laws and regulations we have passed, we must occasionally, by policy, respond to the fast-changing tax environment if we must stay ahead of evasion and avoidance tactics, recognise the need to support our internal revenue services and continue to empower them with the necessary political support and financial resources required for them to execute their mandate effectively,” he clarified.

Speaking on ways of improving their income support, he said, “Broadly, we must seek out ways to expand the tax net and improve our taxpayers’ database. This will require ending the proliferation of taxpayers’ identification numbers and databases. It is pertinent that we harmonise leveraging a unique identification number, as is global best practice.”

He therefore pointed out that, “for us to achieve this, information sharing between jurisdictions must be seamless, not only between the tiers of government but also inter and intra-state. I would like to encourage the Joint Tax Board, in its pursuit of a plausible solution to this anomaly.”
Speaking on increased community suitability of tax generation, he emphasised that, “we have improved the transparency not just around tax revenues, but the entire treasury. Today, our budgets and audited financial statements are not just publicly available, but also in citizen-friendly versions.

“This will be supported by the NGF Public Finance Database, which we will be launching today.

“A database that allows users to easily filter and analyse states’ fiscal data and information. We understand the need to build greater accountability, especially showing citizens the linkage between their taxes and service delivery.

“We are working with our revenue services and other MDAs to expand our tax-for-service initiatives, in rewarding compliance while ensuring citizens know where we expend their taxes annually,” the governor stressed.

He also officially launched the Nigeria Governors’ Forum Public Finance Database, Nigeria’s first reference database for state level public finance data.

“This database reiterates our commitment to fiscal transparency and accountability as well as our resolve to strengthen governance in the country. We welcome your continuous support.”

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A member of the organised private sector of Nigeria (OPSN) has called on the federal government to avoid increasing the burden on operators in the real sector of Nigerian economy with additional taxes and stringent regulatory environment.

This call was made yesterday by the Director General of the Nigeria Employers’ Consultative Association (NECA), Mr. Adewale-Smatt Oyerinde, in a statement titled, “Beyond Rhetoric: NECA Calls for Urgent Action to Save the Real Sector.”

Oyerinde stated that while it was necessary and critical to for government to generate revenue to fund the 2023 national budget and liquidate interest accruing on its debts, “government will do well not to further burden the real sector with additional taxes and stringent regulatory environment.”
He argued that, “it is in the best interest of government to protect the real sector rather than tax it out of existence.”

He further stated that even though, “debt and paucity of revenue are challenges that are acknowledged, organised businesses should not be made to suffer the lack of proper economic planning and political will that have pervaded successive administrations.

“At the last count, organised businesses are presently faced with over 50 different taxes, levies and fees at all tiers of government, some of which are duplicated.
“Currently, at the National Assembly, there are over five different bills, which seek to impose various taxes and levies on organised businesses in addition to the notable taxes and levies, which are of general application, such as The National Information Technology Development Levy (NITDA Levy), Education Tax (or Tertiary Education Tax), National Social Insurance Trust Fund (NSITF), Company Income Tax (“CIT”), Television and Radio License Fee, Local Content Levy, Stamp duty, among others.

“While taxes are global phenomenon, governments all over the world seek to protect their most productive sectors rather than tax them out of existence.”
Ayorinde found it strange, “that at a time when government should do all that is necessary to protect businesses from total collapse and reduce the increasing unemployment rate, there are proposals to further increase excise tax on select products, including the spirits, alcoholic and non-alcoholic products.”

According to the director general of NECA, “this action will not only reduce the competitiveness of the industries but will also increase the costs of doing businesses and further reduce their potential sustainability.”

He stated unequivocally that, “it is in the best interest of government to protect the real sector rather than tax it out of existence.
“As the AfCFTA comes into full swing, Nigeria cannot afford to become a dumping ground for cheap imported products because we have refused to protect local businesses.

“Over the years, we have urged government to expand the tax net, take a bold step towards stopping the oil-theft industry, take more than a cursory look at national assets that are laying waste and address the national embarrassment called the petrol subsidy regime.

“There is no justification why the nation’s four refineries are still moribund after many Turn-Around-Maintenance.
“It will be counter-productive for government to continue tightening the noose on legitimate businesses that are contributing to national growth while there exist obvious wastage and inefficiency in government that are yet unattended to.


“As a panacea to the ever reducing Foreign Direct Investments, rising unemployment and multi-facet revenue challenges, government and its agencies must protect local businesses and make the operating environment more hospitable.”

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Taxation is one of the best ways of generating revenue for countries all over world. Over the decades, Nigeria has been struggling to beef up her revenue from taxation but that has proven difficult due to policy limitations, corruption, lack of patriotism and the tendency for most Nigerians to try to cut corners.
Since 2015, however, the present administration has put together a couple of ground-breaking laws, policies and initiatives to expand the tax net, get millions of more Nigerians to pay taxes and beef up the country’s revenue base. From the time of Babatunde Fowler who headed the Federal Inland Revenue Service, FIRS, to the present leadership led by Muhammad Umar, trillions of naira have been generated in tax revenues for the Federal Government.

FIRS in the year 2021 collected a total of N6.405 trillion in both oil (N2.008 trillion) and non-oil (N4.396 trillion) revenues, beating the target of N6.401 trillion.
Companies Income Tax amounted to N1.896 trillion; Petroleum Profits Tax amounted to N2 trillion; Value Added Tax amounted to N2.07 trillion; Electronic Money Transfer Levy amounted to N114 billion; and Earmarked Taxes amounted to N208.8 billion.

Meanwhile, since the coming of Professor Isa Ali Pantami as Minister of Communications and Digital Economy and his team of experts, tax revenues from ICT and telecommunication have increased in multiple folds. This is due to the unprecedented reforms they brought on board.
Nigerians are being taxed and they are paying heavily. This must be the reason why the recent idea of extra five per cent telecoms tax has not been well received by the masses.

While government through the Minister of Finance, Budget and National Planning, Zainab Ahmed, is willing to expand its revenue through the imposition of additional taxes such as the five per cent excise duty on telecom services, they need to be wary of over-taxing people and taxing the poor masses to death.
In fact, any arbitrary imposition of such taxes on already impoverished masses could spell doom for the government as it can lead to some form of revolt or rebellion. Fortunately, to the delight of many, Prof Pantami recently announced the suspension of the five per cent telecom tax.

He made the announcement during the inaugural meeting of the Presidential Committee on Excise Duty for the Digital Economy Sector in Abuja.
One of the reasons he gave was that the digital economy is already facing the problem of excess taxation and sometimes, multiple taxation. The minister therefore considered any other form of taxation as insensitive to Nigerians.

Unfortunately, however, contrary to the pronouncement by the minister, the Director-General of the Budget Office, Ben Akabueze, said the issue was still on, that the Federal Government had not suspended it.

This has thrown a spanner in the works as Nigerians thought they would heave a sigh of relief and escape what looks like a punishment from the government in the face of the prevailing harsh economy – high unemployment, underemployment inflation rate, poverty rate, low purchasing power, poor value of the naira, etc.

I will use this opportunity to advise the Federal Government to listen to the wise counsel of Pantami and not do something that will be considered insensitive.

This crusade doesn’t mean tax is not important. Taxation is the bedrock of infrastructure development and Nigeria’s evolution in taxation is an interesting one.

During the 1970s and late 1980s, attention was focused on oil revenue, so much that all the states in the country depended solely on revenue from the Federation Account. However, the dawn of global recession showed an intense fall in oil prices and by extension reduced revenue from the Federation Accounts, the over dependence on income from oil generated a disparity in the implementation of some of the fiscal policies.

Governments (Federal, State, and Local) began to look inwards, focusing on Internally Generated Revenue (IGR) as a sustainable means of funding as insolvency hovered among the states. The revenue accruing to the Federal Government of Nigeria from oil over the years has remained grossly insufficient to meet the growing social and public spending required in facilitating economic growth and infrastructural development in the country.

Hence, Nigeria employed taxation as an alternative to the source of revenue when crude oil revenue began to fluctuate. The contribution of taxation to all economies around the world cannot be overemphasized. Apart from the revenue function it performs for the government, it is also used to help the country achieve its macroeconomic goals in the areas of fiscal and monetary policies.

While I will conclude by urging Nigerians of taxable ages to pay their taxes as at when due and stop shortchanging themselves by hoarding monies that could be used to provide infrastructure, it is equally important for the Federal Government to stay action on the issue of extra five per cent telecoms tax as it is a very bad idea that is coming at a very bad time.

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In light of Nigeria’s dwindling revenue, the continued payment of trillions of naira on fuel subsidy by the government and the attendant economic challenges, the World Bank on Wednesday raised the alarm that the country might be facing an existential threat.

The international financial institution warned that if the country failed to optimise its tax system and focus on other areas to boost its revenue, the already low revenue would continue to drop. It noted that despite the rise in the price of oil in the international market, Nigeria had not reaped the benefits because of the huge amount spent on fuel subsidy.

The Senior Public Sector Specialist, Domestic Resource Mobilisation, at the World Bank, Mr Rajul Awasthi, said these at a virtual pre-summit, with the theme ‘Critical Tax Reforms for Shared Prosperity’, organised by the Nigerian Economic Summit Group on Wednesday. He insisted Nigeria would have to eliminate the subsidy regime eventually.

After the Federal Government earmarked about N4tn for subsidy payment in 2022, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, said recently that government might spend a whopping N6.72tn as fuel subsidy in 2023 or pay N3.36tn up to mid-2023 if the subsidy regime would was to end in May 2023.

Also, the minister had consistently said the nation was battling with revenue problems, which had compelled the government to keep borrowing. The debt stock had risen to N41.6tn in the first quarter of 2022 with projections that it could peak at N45tn by the end of the year. Nigeria is rated the fifth on the list of the World Bank’s debtors, with $11.7bn debt stock as of June 30, 2021.

The International Monetary Fund had in March projected that Nigeria might spend 93 per cent of its revenue on debt servicing in 2022, but the minister disclosed a few weeks ago that about 119 per cent of the country’s revenue was spent on debt servicing. This implied that government had to borrow to meet its debt financing obligations, a development many economists had described as disturbing and unsustainable.

The virtual event, anchored by the PwC’s Fiscal Policy Partner and Thematic Lead, NESG Fiscal Policy and Planning Thematic Group, Mr Taiwo Oyedele, was attended by several stakeholders, including the representative of the Manufacturers Association of Nigeria and the Executive Secretary of the Joint Tax Board, Mrs Nana-Aisha Obomeghie.
Meanwhile, in a slide he shared during his presentation, which showed Nigeria’s Development Update, Awasthi explained that between 2015 and 2019, Nigeria’s non-oil revenues were among the lowest in the world and as a result the second lowest in spending, and that oil revenues were also falling even when oil prices were higher.

He stated, “Nigeria has the largest economy in Africa and the largest country in Africa by population, so it is critical to Africa’s progress. There is no doubt about that. But the government of Nigeria, from the public finance perspective, is really facing an existential threat. Let’s not downplay the situation. That is the actual reality.

Nigeria’s revenue

“Nigeria is 115th out of 115 countries in terms of the average revenue to Gross Domestic Product ratio. Despite the oil prices rising the way they have been, net oil and gas revenues have been coming down because of the tremendous impact of the subsidy.

“So, what is going to happen in 2022? The federation’s revenues are going to be significantly lower. They are already very low, and Nigeria is already the lowest in the world out of 115 large countries and this year, it’s really going to be lower than what it was in 2020 because of the debilitating impact of fuel subsidy.”

On the perennial low revenue from tax in Nigeria, a former Finance Minister and Ahmed’s predecessor, Mrs Kemi Adeosun, had in 2017 revealed that only 214 persons in Nigeria paid N20m and above as tax and that most active taxpayers in the country were people whose PAYE were deducted from source. She had also decried the low tax to GDP ratio at about six per cent, which she described as the lowest in the world and far below the 18 per cent average on the continent.

Speaking on how to get out of the woods, Awasthi stated that in the non-oil sector, Value Added Tax compliance gaps were immense and they needed to be breached as well as rationalize tax expenditures.

Citing the tax expenditure statement of the Budget Office in 2020, he said, “The VAT gap in 2019 was over N3.1tn whereas the collection was N1.2tn. Of that gap, about two-thirds, which is about N2tn, came from compliance gaps. That’s a serious issue that needs to be addressed. It’s because of this that we have a low tax base and a lot of people feel they are being overtaxed.”

He also stressed the need for technology deployment in tax administration and data sharing between the Federal Inland Revenue Service and the states’ Internal revenue services to boost the revenue from personal income tax. He also called for an increase in the tax levied on certain goods, like wine, cigarettes and beer.

He added, “Property taxes at the state and local government levels are also critical. Nigeria has a tremendous potential, with about 50 million households, taxable properties and there are many rich people who need to be paying property taxes. There is a tremendous opportunity there.

“Also, I think there is a huge opportunity to raise excise on goods like beer, wine, spirit and cigarettes. There is a very tiny tax that has been introduced on them and this could be higher. These are the kinds of things that across the world there is a consensus that these rates should be higher because they are supposed to attack and address negative externalizes of these products.

“There is also a need to reform the fuel subsidy regime, moving towards its full elimination at least by 2024. Nigeria needs to roll back the PMC subsidies and adopt the free market price. This is critical for this country. There is also the need to improve revenue from cross-border transactions and other international tax measures.”

While calling for increased enlightenment of the taxpayers, which he said the World Bank was collaborating with the World Bank to achieve, he noted that tax laws needed to be modernised and strengthened for a better outcome.

He added, “Going forward, the approach to revenue mobilisation has to be more strategic. We need to be more strategic and it’s not just about taxing more, Nigeria needs to tax better. We need to review the collection system and not just about what to collect and from who. There have been discussions about how the tax system has to be progressive and efficient in terms of compliance and making sure we are targeting the right tax bases.”
In his submission, the Director-General of MAN, Mr Segun Ajayi-Kadiri, represented by the Director of Research and Advocacy, Mr Oluwasegun Osidipe, said there was no doubt that the country needed money but that the government must exercise caution in introducing more taxes.

He tasked the government to expand the tax base, ensure the inclusion of more people in the informal sector and make the tax system progressive such that the rich would pay more than the poor.

MAN advises

He said, “MAN’s expectation is that, though we need more revenue, the tax system should be structured to take more resources from the rich than the poor. Also, more taxes should be targeted at ostentatious goods and luxury goods. Those who earn more income one way or the other should pay more.

“There is a need for us as a nation to sit at a table and agree that we need to develop a comprehensive and integrated framework that would facilitate the intentional movement of operators in the informal sector to the formal sector and that would make us bring in more revenue for the government through tax.

“Whether we like it or not, huge sums of money in transactions are taking place in the informal sector, and we need to integrate them into the tax system rather than overburden the already compliant companies. If you look at the gamut of taxes levied on companies, they are huge. There are over 12 and additional ones are still coming. There is a need for that framework.

“We need to widen the tax net rather than increasing the burden on existing taxpayers. We need to promote harmonization of taxes and there is a need for more consultation among stakeholders. Nigeria is at a crossroads but all hands must be on deck, especially looking at Nigeria’s low tax to GDP ratio.”
Other participants at the event also demanded an improved tax system that would ensure that those outside the tax net were integrated into the net to avoid excessive burden on those in the net.

Commenting on the World Bank’s warning, an economist, Bismark Riwane, in an interview with The PUNCH, advised that the only way out of the economic crisis was to make people prosperous so that they will pay more taxes for the economy to grow.

“The Federal Government has come out clearly with the Gross Domestic Profit ratio. One is the number of taxes two is the effectiveness of the taxes. So the question is, are we collecting the taxes that are due, two are we collecting it efficiently and three, what are we using the tax revenues for? So there are questions there but to answer your question I do not agree with the World Bank that the best thing to do now is to start increasing taxes all over the places. The emphasis to me is to achieve growth, when there is growth companies will be doing well and people income increase and therefore the taxes people will pay become more.”

Also speaking, an Associate Professor at Pan-Atlantic University, Dr Olalekan Aworinde, said, “What the World Bank is proposing is what we call property right that has to do probably, it could be in terms of estate or building apartments that are owned by the rich. Well, there’s nothing wrong in that but my fear is that it could be a double taxation because if this is implemented at all, you know our local government always collect tenement rate and I know that also in Lagos State they are effective in terms of this collection.”


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One of the characteristics of Third World nations is that the efficiency ratio of the independent class (people between 18 to 60 years) is low. Nigeria has a high ratio of people in this class. Most people in this category are unemployed; as a result they cannot contribute to the development of the nation. Any attempt to tax these people will be regarded as “taxing the poor”, based on our extant law on personal income tax. In a country with a huge population, like Nigeria with over 220 million people and with a high rate of unemployment, should people of working class age be left without paying taxes? Should able-bodied men and women who are supposed to be fending for children (0 to 18 years) and the elders (60 years and above) be catered for by the few taxpayers and the government? The answers depend on the personal income tax laws of a nation.

Personal Income Tax (PIT) is a direct tax charged on the income of a person. In the context of personal income tax, a ‘person’ means an individual, a sole proprietorship (non-juristic person), communities and families and executors and trustees (of an undivided estate). Personal income tax in Nigeria is guided by the Personal Income Tax Act Cap P8 LFN 2004 (as amended). In Nigeria, the tax is imposed on income of individuals, corporate sole or body of individuals, communities, families and trustees or executors of any settlement or an individual. A PIT payer is entitled to a Consolidated Relief Allowance of N200,000 or 1% of gross income whichever is higher, plus 20% of gross income. Section 24(f) [11] of the 1999 Constitution of the Federal Republic of Nigeria (as amended) provides that “it is a duty of every citizen to declare his income honestly to appropriate and lawful agencies and pay his tax promptly.” Cost of tax collection is a bane in Nigeria.

The rate of personal income tax in Nigeria ranges from 7% to 24%, depending on the amount of chargeable income – individuals are subject to minimum tax of 1% of gross income where the income is less than N300,000 per annum. The tax is administered by Federal Capital Territory (FCT)/States Internal Revenue Service (IRS) in respect of their residents. The tax is also administered by the Federal Internal Revenue Service (FIRS) on non-residents, members of the Armed Forces, Police, Officers of Nigerian Foreign Service. The due date for filing returns of the tax is 31st March of every year. The due date for remittance of Pay As You Earn (PAYE) is the 10th day of every succeeding month. There is usually “tax amnesty” to those who are not in employment and those who are not employable in some countries. PAYE workers hardly pay their taxes because of the distrust in government using the tax judiciously and the high rate of corruption in Nigeria.

According to the tax law of Nigeria, an employer shall file return of emoluments and tax deducted from the employees in the preceding year not later than 31st January of every year. A person who fails to file a return shall be liable on conviction to a fine of N5,000 and a further sum of N100 for every day during which the failure continues or imprisonment of six (6) months or both. Any employer who fails to file a return, shall be liable on conviction to a penalty of N500,000 for body corporate and N50,000 in the case of an individual​. The N5,000 fine and a further sum of N100 for every other day thereafter is an incentive for tax evasion and should be changed to commercial bank interest rates’ equivalent to the amount of tax.

Nigeria is one of the countries with low tax rate and tax collection rate in sub-Saharan Africa. At 7.5 percent, Nigeria has one of the lowest VAT rates in the world, well below the regional Economic Community of West African States (ECOWAS) requirement of 10 percent. Achieving the Sustainable Development Goals (SDGs) and implementing the Addis Ababa Action Agenda and the African Union’s Agenda 2063 requires mobilising additional finance, in particular domestic resources, to fund public goods and services. Nigeria needs to harness the personal income tax, especially as it has a more independent population than dependent population. There is a need for tax policy reform to ensure domestic resource mobilisation.

In 2019, the unweighted average tax-to-GDP ratio for 30 African countries in a study (the “Africa (30) average”) was 16.6% (see Brochure: Revenue Statistics in Africa 2021 – OECD). The tax-to-GDP ratio refers to total tax revenues, including compulsory social security contributions, as a percentage of gross domestic products (GDP). The Africa (30) average in 2019 was below the averages of 24 Asian and Pacific economies (21.0%), Latin America and the Caribbean (LAC) (22.9%), and the OECD (33.8%). Tax-to-GDP ratios in Africa in 2019 ranged from 6.0% in Nigeria to 34.3% in the Seychelles and Tunisia, exceeding 28% in four countries (Morocco, the Seychelles, South Africa and Tunisia). With the dwindling oil revenue, Nigeria must think outside the box to be able to finance its statutory responsibilities without recourse to loan.

All nine resource-rich countries in this publication had tax-to-GDP levels below 15% in 2019, whereas most non resource-rich countries had ratios above this level. Resource revenues are mainly generated through rents and royalties, which are not classified as taxes in the report. Nigeria cannot be classified as a resource-rich country because of the low ratio of oil revenue to the population of the country (over 220 million). The only solution to the situation of Nigeria where debt payment now exceeds revenues being generated according to the minister of finance, Zainab Shamsuna Ahmed, is for the government to make tax compulsory for the people in the working class as a civic responsibility. Tax compliance level in Nigeria is too low for the responsibilities of the nation. Young and able Nigerians do not work because they do not have responsibility to the government. Compulsory personal income tax for every able-bodied Nigerian of working age will put more people at work and act as inducement to individual productivity, national wealth creation and efficiency.

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The top three equities accounted for 365.6 million shares worth N4.1 billion in 562 deals, contributing 38.8 per cent to the total equity volume.

On the sectoral activity chart, the financial services industry (measured by volume) led the chart with 648.2 million shares valued at N6.3 billion traded in 9293 deals.

The sector contributed 70 per cent to the total equity turnover volume and value respectively. The conglomerate industry followed with 253.4 million shares worth N280.8 million in 1,126 deals. The consumer goods industry followed with 102.6 million shares worth N3.2 billion in 3,016 deals. The third place was the conglomerates industry, with a turnover of 36.2 million shares worth N193.4 million in 562 deals.

The Nigerian Exchange Limited (NGX) all-share index, which measures the performance of quoted companies and market capitalisation of listed equities depreciated by 0.5 per cent to close the week at 51,979.92 and N28.031 trillion respectively.


Similarly, all other indices finished lower, except the NGX Insurance, NGX MERI Growth, NGX Oil/Gas, NGX Growth and NGX Sovereign Bond Indices, which appreciated at 1.81 per cent, 1.01 per cent, 3.80 per cent, 0.41 per cent and 0.15 per cent, while, the NGX ASeM index closed flat.

Notably, profit-taking activities witnessed in Nigerian Breweries (-10.9 per cent), International Breweries (-6.9 per cent), Lafarge WAPCO (-6.7 per cent), and Zenith Bank (-6.5 percent) stocks led the weekly loss.

Reacting to market performance last week, analysts at Codros Capital said: “In the interim, we believe the full swing of the H1 ’22 earnings season will dictate market sentiments and possibly drive positive performance as investors hunt for bargains in fundamentally sound stocks with a consistent history of interim dividend payments.

“Notwithstanding, we envisage intense selling pressures on stocks of companies that grossly underperform in H1, 22. Overall, we reiterate the need: for positioning in only fundamentally sound stocks as the weak macro environment remains a significant headwind for corporate earnings.”


For analysts, Vetiva Dealings and Brokerage firm “Market sentiment has been bearish all through the week, following Tuesday’s MPR hike with four consecutive negative closes.

“While this may bring about attractive entry points in some counters, we are likely to see tepid trading sessions next week as investors continue to trade cautiously.

” However, better than expected Q2 results next week may give the market the necessary positive boost.” Also, a total of 79,914 units of bonds valued at N83 million were traded last week in 31 deals compared to 747,022 units valued at N775 million transacted in 23 deals last week.
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The Acting Executive Chairman of the Service, Mr Haruna Abdullahi, made this known in a statement by the FCT-IRS Head Corporate Communications, Mr Mustapha Sumaila on Sunday in Abuja.

Abdullahi, according to the statement, made the disclosure when he paid a courtesy call on the Coordinating Secretary of Tax Appeal Tribunal, Hajara Oniyangi.


The acting chairman expressed concern at the poor level of compliance by taxpayers in spite of the huge number of taxpayers in the FCT.

He stated that it would no longer be business as usual, adding that the service was determined to ensure all taxpayers in FCT were responsive to their civic duties.

He stressed that the service would not leave any stone unturned, saying it was empowered by law to recover all outstanding tax liabilities while penalising tax defaulters.


“We are engaging the Judiciary, security agencies, the media and other relevant stakeholders on this matter.

“I can assure you that before the year runs out people will be held accountable.

“We have built our capacity and it is our intention to make our mark by ensuring that people do what they are supposed to do according to the law.

He said the Service would be guided by the Personal Income Tax Act, Finance Act, FCT-IRS Act and of course the constitution in it’s operation.


Abdullahi, who assured the tribunal of the capacity of the service, charged members of the tribunal to justify the confidence reposed in them by bringing recalcitrant taxpayers to book.

The acting executive chairman expressed optimism that the exercise would prompt voluntary tax compliance, tax net growth and ultimately boost revenue generation.

The Coordinating Secretary, Tax Appeal Tribunal, Hajara Oniyangi, said the tribunal was established to settle disputes that could arise in the course of the duties.

She disclosed that the Tribunal’s processes were simple and clear with a reputation for prompt judgment delivery.



While lauding Abdullahi’s effort, Oniyangi highlighted the need for the service to intensify awareness, stating that taxpayers could not be entirely blamed for non-compliance.

She said there was a need for tax payers to be duly informed about tax processes, advantages of paying taxes as well as risks of non compliance.

The Secretary of the tribunal, Mr Ahmed Aliyu, lauded the step taken by the service towards ensuring enforcement.

He pledged commitment of the tribunal to acting within the ambit of the law to ensure that cases from FCT IRS were given accelerated hearing.

He stressed the need for the FCT-IRS to harness all areas of revenue generation as permissible by law.

“If for instance there are organisations that collect personal income tax and fail to remit, it is sometimes difficult to go in there and force them as a service.

“That is why the tribunal was created by government and once judgment is delivered by the tribunal, even if a defaulter wants to appeal, he or she would have to first pay the money,” he said.

The News Agency of Nigeria(NAN) reports that the Federal Capital Territory Internal Revenue Service (FCT-IRS) was established by FCT Internal Revenue Service Act of 2015.



It is empowered by the National Assembly to administer tax and non-tax revenues accruable to the FCT.

It is responsible for collection of all taxes collectible by a state government in accordance with the Taxes and Levies (approved List of Collection) Act of 1998 as Amended.(NAN)

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Financial experts have stressed the need for the Federal Government to implement the National Development Plan 2021 2025 NDP to spur the country s economic growth The experts said this at a webinar on Saturday with the theme Resetting Nigeria s Economic Growth Trajectory They said that practical measures should be adopted to implement the plans to enhance revenue generation The News Agency of Nigeria reports that the NDP which succeeds the Vision 20 2020 introduced in 2009 and the Economic Recovery and Growth Plan is a bridge for the country s long term plan currently being developed Nigeria Agenda 2050 The vision of the plan is to unlock the country s potential across all sectors of the economy for a sustainable holistic and inclusive national development Mr Lamido Yuguda the Director General Securities and Exchange Commission SEC said that the implementation of NDP would boost productivity employment and the standards of living Yuguda represented by Mr Dayo Obisan Executive Commissioner of Operations SEC said that the successful execution of the NDP was critical to achieving economic growth since its objectives cut across all sectors of the economy The Federal Government already has several laudable economic plans and the focus should be on increasing the level of implementation of these plans The NDP is one of such plans that the government can focus which is aimed at fostering economic growth and enhancing productivity One of its broad objectives is on economic diversification to improve non oil revenue and increase the dollar earning power of our non oil export It also focuses on investment in infrastructure security and good governance education and a healthy population poverty alleviation economic and social development across states he said Mrs Chizor Malize the Managing Director Financial Institution Training Centre FITC emphasised the need to transit from a consumer nation to production for increased export capacity According to her the government should take cues from Asian countries on how they develop their economies especially in the areas of public health transportation technology and housing Malize said that the best way to drive large scale employment was by reviewing policies on education and curriculum to equip and stimulate youths to become employers of labour She called on the government and other relevant stakeholders to consistently create an enabling environment to foster micro small and medium scale enterprises In China we see a lot of strength and sophistication around technology but it will interest you to know that China started its reform through agriculture China recognise the importance of food security and alleviating people from poverty so they leveraged investment in agricultural policies to create change and catalyse growth and empowerment One of the biggest things that drove Singapore s success is visionary leadership because they deliberately tied political stability to economic growth Singapore was deliberate about infrastructure in public health transportation and housing as well as free market principles where businesses can thrive and attract foreign investors without the huge tax burden Japan was crushed after World War 2 but now manufacturing has elevated Japan and allowed them to command respect across the world she said Malize added that the FITC was doing a lot to empower the youth with its development focused projects in the areas of innovation environment agriculture technology and health Also speaking Mr Johnson Chukwu the Managing Director Cowry Asset Management Ltd urged the government to do more in growing the manufacturing Information Communication Technology ICT and trade sectors as these were key drivers of economic growth Chukwu said that growing the manufacturing sector involved addressing factors such as infrastructure power supply logistics seaports for import and export of goods transportation and availability of development finance initiatives He also stressed the need to develop human capital in the sector by ensuring the availability of quality education to build skills and capacity as well as produce quality goods for competitive advantage to attract investors The ICT sector contributes about 16 2 per cent to the economy It is the new and digital economy and the government must do everything to encourage the sector he said On his part Mr Taiwo Oyedele Fiscal Policy Partner and Africa Tax Leader PwC called on the government to harmonise taxes and demonstrate value for it to citizens to encourage tax morale and boost government s revenue Oyedele said that tax evasion in the public sector also posed a great challenge for the government as it was losing revenue The biggest tax evasion in Nigeria is in the public sector with Ministries Departments and Agencies not remitting taxes to the government Government has to think about harmonising taxes because the number of taxes and number of agencies collecting it is too many Nigerians are paying taxes but the government is not getting it due to corruption leakages and inefficiency Therefore to solve the revenue challenges the government should address these leakages with automation intelligence and data he added
Experts seek implementation of economic development plans
Financial experts have stressed the need for the Federal Government to implement the National Development Plan 2021-2025 (NDP) to spur the country’s economic growth.


The experts said this at a webinar on Saturday with the theme: “Resetting Nigeria’s Economic Growth Trajectory.”
They said that practical measures should be adopted to implement the plans to enhance revenue generation.

The News Agency of Nigeria reports that the NDP which succeeds the Vision 20:2020 introduced in 2009 and the Economic Recovery and Growth Plan is a bridge for the country’s long-term plan currently being developed, “Nigeria Agenda 2050”.

Mr Lamido Yuguda, the Director-General, Securities and Exchange Commission (SEC), said that the implementation of NDP would boost productivity, employment and the standards of living.

Yuguda, represented by Mr Dayo Obisan, Executive Commissioner of Operations, SEC, said that the successful execution of the NDP was critical to achieving economic growth since its objectives cut across all sectors of the economy.

“The Federal Government already has several laudable economic plans and the focus should be on increasing the level of implementation of these plans.

“The NDP is one of such plans that the government can focus which is aimed at fostering economic growth and enhancing productivity.

“One of its broad objectives is on economic diversification to improve non-oil revenue and increase the dollar earning power of our non-oil export.

“It also focuses on investment in infrastructure; security and good governance; education and a healthy population; poverty alleviation; economic and social development across states,” he said.

Mrs Chizor Malize, the Managing Director, Financial Institution Training Centre (FITC), emphasised the need to transit from a consumer nation to production for increased export capacity.

According to her, the government should take cues from Asian countries on how they develop their economies, especially in the areas of public health, transportation, technology and housing.

Malize said that the best way to drive large-scale employment was by reviewing policies on education and curriculum to equip and stimulate youths to become employers of labour.

She called on the government and other relevant stakeholders to consistently create an enabling environment to foster micro, small and medium-scale enterprises.

“In China, we see a lot of strength and sophistication around technology but it will interest you to know that China started its reform through agriculture.

“China recognise the importance of food security and alleviating people from poverty, so they leveraged investment in agricultural policies to create change and catalyse growth and empowerment.

“One of the biggest things that drove Singapore’s success is visionary leadership because they deliberately tied political stability to economic growth.

“Singapore was deliberate about infrastructure in public health, transportation and housing as well as free market principles where businesses can thrive and attract foreign investors without the huge tax burden.

“Japan was crushed after World War 2 but now, manufacturing has elevated Japan and allowed them to command respect across the world,” she said.

Malize added that the FITC was doing a lot to empower the youth with its development-focused projects in the areas of innovation, environment, agriculture, technology and health.

Also speaking, Mr Johnson Chukwu, the Managing Director, Cowry Asset Management Ltd., urged the government to do more in growing the manufacturing, Information Communication Technology (ICT) and trade sectors, as these were key drivers of economic growth.

Chukwu said that growing the manufacturing sector involved addressing factors such as infrastructure, power supply, logistics, seaports for import and export of goods, transportation and availability of development finance initiatives.

He also stressed the need to develop human capital in the sector by ensuring the availability of quality education to build skills and capacity as well as produce quality goods for competitive advantage to attract investors.

“The ICT sector contributes about 16.2 per cent to the economy.

It is the new and digital economy and the government must do everything to encourage the sector,” he said.

On his part, Mr Taiwo Oyedele, Fiscal Policy Partner and Africa Tax Leader, PwC, called on the government to harmonize taxes and demonstrate value for it to citizens; to encourage tax morale, and boost government’s revenue.

Oyedele said that tax evasion in the public sector also posed a great challenge for the government as it was losing revenue.

“The biggest tax evasion in Nigeria is in the public sector, with Ministries Departments and Agencies not remitting taxes to the government.

“Government has to think about harmonising taxes because the number of taxes and number of agencies collecting it is too many.

“Nigerians are paying taxes but the government is not getting it due to corruption, leakages and inefficiency.

“Therefore, to solve the revenue challenges, the government should address these leakages with automation, intelligence and data,” he added.


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The Federal Inland Revenue Service has extended the deadline for the submission of Companies Income Tax Returns from June 30 to August 31 this year.

The extension, according to the FIRS, became imperative following the inability of some companies to meet up with the initial deadline.

It said in a notice signed by the Executive Chairman, Mr Muhammad Nami and seen by THE WHISTLER that the extension which is in line with the Companies Income Tax Act is a one off gesture for only 2022 year of assessment companies income tax returns.

It said, “The Federal Inland Revenue Service has received numerous calls from companies for the extension of time to submit the Companies Income Tax returns for 2022 year of assessment falling due on 30th June 2022 as a result of their inability to meet up with the deadline.


“Consequently, as a measure of goodwill and in line with relevant provisions of the Companies Income Tax Act, the Service directs as follows:

“All companies whose CIT returns for 2022 YOA fall due between 30th June and 31st August, 2022 (both days inclusive) are given up to 31st August, 2022 to submit the returns to the Service.

“The extension of the due date is a one off gesture for only 2022 YOA CIT returns which are due as aforesaid; the relevant CIT returns shall, therefore, not attract Late Filing Penalty or interest for late payment if submitted to the Service on or before 31st August 2022.”

“Where relevant CIT returns are not filed by the extended date, penalty and interest for late payment shall be computed from the original due date and not the extended date; this extension of filing date is only for CIT and does not include returns for with holding tax, value added tax, personal income tax.”

The Service urged all relevant taxpayers to take the opportunity afforded by the extension to submit their CIT returns within the specified time, pay the taxes due and avoid payment of penalty and interest.
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Ogun State Internal Revenue Service has said that it will soon begin an audit of consumption tax dating back to six years across the state.

The Executive Chairman OGIRS, Mr Olugbenga Olaleye, disclosed this during a meeting with stakeholders on ‘Hotel occupancy and consumption tax’ in Abeokuta.

Olaleye, in a statement signed by the agency’s Press Officer, Mrs Abolanle Ogunlami, said the audit was necessary to clear the backlogs of tax liabilities and ensure that businesses in the hospitality industry such as hotels, bars, guest houses, and event centres complied with the law as stipulated in the consumption tax law.

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The June Transfer Pricing (TP) filing season is here, with the deadline only a few weeks away! June represents a very busy period for taxpayers, tax consultants and tax authorities, primarily because most companies in Nigeria have a December year-end and are required by law to file their TP returns six (6) months after the year-end i.e. on or before 30 June of the subsequent year. As such, taxpayers and tax consultants will be busy reviewing documents and preparing returns for filing with the tax authorities.

The drive to ensure compliance before the filing deadline is largely motivated by the existence of penalties for late filing which are quite significant for TP (minimum of ₦10 million). Also, the Federal Inland Revenue Service (FIRS) in recent years has been imposing penalties on erring taxpayers.

The FIRS in 2020 introduced E-TP PLAT 2.0 (the Platform) for the online filing of TP returns. The Platform was introduced to enable easy filing of TP documents. In 2021, the FIRS communicated that TP returns will only be accepted if filed on the e-filing platform. As such, the 2021 Financial Year (FY) returns due this June have to be filed on the Platform.

Given the aggressive enforcement of TP compliance by the FIRS and the potential huge penalties, it is important for taxpayers to understand how the Platform works and how to navigate effectively to ensure that the TP returns are filed on time.

TP Returns Filing in Nigeria
The Nigerian TP Regulations require taxpayers with related parties to comply with certain obligations, including filing of annual TP statutory returns (TP declaration and disclosure forms) on or before six (6) months after the end of its accounting year or eighteen months after its date of incorporation, whichever is earlier.

The TP declaration form includes information about the company's business, shareholders, directors, related parties etc. and should be filed in the first year of compliance with updates made in years where there are changes to the company's business e.g. changes in shareholding structure, directors etc. On the other hand, the TP disclosure form contains details of the related party transactions conducted by an entity in a particular FY, such as the values, the related parties and the TP methods selected to test the transaction. The disclosure form is to be filed annually.

The 2018 TP Regulations introduced steep administrative penalties for the failure to file TP returns as at when due. These include:

Failure to file TP declaration within the specified period - ₦10 million in the first instance and ₦10,000 for every day the failure continues.
Failure to file updated TP declaration/ notification about changes in directors - ₦25,000 for each day in which the failure continues.
Failure to file TP disclosures within the specified period - the higher of: ₦10 million or 1% percent of the value of the controlled transaction not disclosed, and ₦10,000 for every day the failure continues
Incorrect disclosure of transactions - the higher of: ₦10 million or 1% percent of the value of the controlled transaction incorrectly disclosed.
The E-TP PLAT 2.0
Prior to the introduction of the Platform, TP returns were filed at the FIRS' office using hard copies of the TP forms and accompanied by supporting documents including Financial Statements (FS), copies of tax computations and self-assessment forms. Copies of the filed returns were stamped and acknowledged while the FIRS kept the original documents. This meant that the FIRS was bombarded with huge influx of people with heaps of documents by the filing deadline. This created an issue with storage of these documents.

In its bid to reduce the number of hard copy filing and its attendant challenges, the FIRS began a switch to electronic filing of TP returns in 2019, with the Platform officially launched in March 2020. It was not until 2021 that the Service began to strictly enforce e-filing. This may have been due to disruption to businesses resulting from the coronavirus pandemic. In 2021, where the FIRS accepted hard copy filings, it was only after the online filing had been completed and the evidence of this was provided to the Service. However, going forward, TP returns are expected to the filed on the Platform.

Taxpayers are required to complete an E-TP access application form (the Form) to enable them register and obtain log-in details to the Platform.

The Platform allows for filing of the TP returns, Country-by- Country (CbC) Reporting notification forms and CbC reports, alongside other relevant attachments.

The TP returns filing page of the platform contains various sections namely:

Declarations – This section mirrors the hard copy declaration form and contains information on the taxpayer and its related parties, including directors, shareholders, subsidiaries etc.
Disclosure Forms – This section mirrors the hard copy disclosure form and contains information on related party transactions (RPTs), including RPT values, counterparties, jurisdiction of counterparties, TP method selected for testing the RPT, intercompany balances, amongst others.
Disclosure: P&L and Balance Sheet – These sections expand on Part F of the hard copy TP disclosure form and essentially summarise the P&L and Balance Sheet in the taxpayer's FS.
TP Uploads – This section allows for the upload of accompanying documents to the TP returns such as the FS, tax computation, evidence of tax payments and self-assessment spool from TAXPRO MAX, the e-filing platform for Corporate Income Tax (CIT).
Upon completing the above sections, the forms can be sent for review to an individual who will receive a PDF summary of the information imputed on the Platform. Upon approval, the returns can be submitted on the Platform alongside accompanying documents.

The FIRS reviews the filings and either accepts or rejects the filing. Where the returns are rejected, the taxpayer will be required to update the filings and refile.

Observations from Filing on the Platform and Suggestions for easy navigation
1. Registration on the Platform - Due to the large number of taxpayers that needed to register on the Platform in 2021, there was some lag between the time the Forms were sent and the time log-in details were provided to the taxpayers. It is advisable that taxpayers yet to register do so as soon as possible to ensure they receive their log-in details before the filling deadline.

Also, the Platform requires that an email address is linked to only one profile. As such, taxpayers that were members of the same group and shared finance/tax personnel experienced delayed response, where the same email address was entered in the Form for all the entities. As such, it is recommended that group entities provide different email addresses for each company to avoid delays in registration.

2. Frequent downtime - Taxpayers experienced issues with completing the TP returns on the Platform, due to frequent downtime. This was particularly evident towards the filing deadline due to huge traffic. In some instances, the Platform did not load. Taxpayers should endeavour to complete their TP filings on time in order to avoid the rush and traffic on the Platform close to June 30.

3. Rejection of TP returns – In 2021, it was observed that the FIRS rejected TP returns where relevant supporting documents were not uploaded alongside the TP forms. In some instances, the FIRS notified taxpayers via email of the rejection and requested that the returns were resubmitted with the outstanding documents typically within seven (7) days.

Where the TP returns are rejected, taxpayers stand a risk of being levied administrative penalties by the FIRS.

Specifically, the FIRS requested that the signed audited FS must be uploaded alongside the TP returns. This is a new development as previously, TP returns could be filed with draft FS and in practice, CIT returns can still be filed with a draft FS.

This has created unnecessary burden for taxpayers as the FIRS seems to have disregarded the fact that FS are not primarily prepared for tax purposes. Different reasons can result in the delay in the finalisation of FS, such as group restructuring, operational issues etc.

Also, in cases where a taxpayer has requested for an extension of the CIT filing deadline, the taxpayer will be unable to upload the CIT documents on the Platform. Hence, the taxpayer may be unable to update their TP filing and may risk being levied penalties. To ease the burden on taxpayers, there should be a link between the TAXPRO MAX and the Platform rather than requiring taxpayers to re-upload documents that have already been submitted for CIT purposes.

4. No evidence of date of TP filing – Upon completion of the TP returns, the date of entry creation, status of the returns (e.g. draft, accepted, rejected) and dates of modification are displayed on the Platform. However, the Platform does not indicate the actual date of submission. Given that paper filing has been completely phased out, potential disputes may arise between taxpayers and the Service on the timing of the filing, especially where previously submitted returns are rejected by the Service.

5. Difficulties with attachments – The Platform has a size limit (32mb) and quantity restriction for uploads (maximum of five [5] files). Therefore, once this is exhausted, no further uploads can be made without deletion. Taxpayers should be cautious of this when uploading supporting documents.

Also, it was observed that attempts to delete already uploaded documents and replace them with more recent documents, e.g. draft FS to signed audited FS, proved difficult as taxpayers may inadvertently delete all the documents on the Platform during the process. Hence, replacement of documents may merely involve uploading the new document as an addition. The size limit for uploads should however be monitored when doing this.

Going forward
Given the peculiarities of filing with the Platform, taxpayers are advised to speed up the conclusion of their statutory audit and CIT filing to facilitate a smooth filing season. In the event that the audited FS will not be ready by the filing deadline, a request for an extension of the filing deadline may be made to the FIRS. However, the approval of such requests is at the discretion of the Service.

The Service should consider improving user experience by reducing the incidence of downtime and speeding up the registration process. Updates should also be made to the dashboard to include the date of submission to avoid potential disputes. In addition, the FIRS should be flexible in accepting TP returns filed with draft FS.

As the June TP filing deadline draws near, it is important that taxpayers engage TP consultants to assist with the TP filing in order to avoid the potential imposition of penalties.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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The Federal Government is perfecting plans to eliminate multiple taxation in the transportation sector, Permanent Secretary, Federal Ministry of Transportation, Dr Magdalene Ajani, has said.

Speaking on the sidelines of the just concluded two-day National Transportation Technology Conference and Exhibitions (NTTCE), by the forum of Transportation Commissioners in Nigeria, Ajani said the removal will help reduce the cost of transport business.

Ajani, addressing the conference’s sub-theme: Intergovernmental co-operation between federal and sub-nationals in seamless policy, regulation and tax regimes: The role of natural gas expansion programme, said streamlining the various taxation in the sector was necessary to enhance growth and development.

She said it is high time the hydra headed unregulated multiple taxation in the sector be dealt with as it is inimical to business sustenance.


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The Nigeria Export Processing Zones Authority (NEPZA) has signed a Memorandum of Understanding (MoU) with the Federal Inland Revenue Service (FIRS) for effective administration of taxes in the free trade zones.

Signing the MoU on Tuesday in Abuja, the Executive Chairman of FIRS, Muhammad Nami, said that the importance of the agreement was to foster greater collaboration between the two agencies.


According to Nami, the intention is to promote the smooth operation of activities or approve enterprises in the zones and ensure effective administration of taxes applicable in the operation of zones under NEPZA.

Nami said that FIRS would have access to the zones to conduct tax compliance checks at periodic intervals in line with the MoU. According to him, if there are any challenges, they would be resolved with the speed of cordiality.

On his part, the Managing Director of NEPZA, Prof. Adesoji Adesugba, said that the MoU aimed at unbundling and strengthening the tax schedule for compliance purposes in line with section 19 of the NEPZA Act.

He said that section 19 of the NEPZA act mandates free zones enterprises to file returns for statistical and data.


Adesugba said that section 8 of the NEPZA Act approved that enterprises operating in zones should be exempted from all federal, state and local government taxes, levies and rates.

“However, they are under obligations to pay all deferred taxes, including duties when they extend their businesses to the custom territories. So, the widely held notion that enterprises in the zones do not pay tax all remained misplaced.

“For instance, the personnel of the over 500 enterprises that operate in the 42 zones across the country religiously comply with PAYE tax. The monies are automatically generated and paid to the FIRS in the locations they work,’’ Adesugba said.
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The Nigeria Economic Zones Association (NEZA) has said the special economic zones in the country are not used for tax evasion but a source of gaining more revenue through custom duties and VAT than Corporate Income Tax.
Recall that the Chairman, House of Representatives Committee on Public Accounts, Oluwole Oke, had recently said more companies are moving to free zones established by the Nigerian Export Processing Free Zones Authority (NEPZA) and the Oil and Gas Free Zones Authority (OGFZA) to avoid paying taxes.

But in a statement, the Executive Secretary of NEZA, Toyin Elegbede, described the assertion as false and deliberate misinformation.
Elegbede noted that companies within the zones operate either as enterprises or service providers and pay their taxes as the laws provide, stating that Nigeria earns huge amounts from indirect taxes accruable from the Free Zones.

“In fact, Nigeria gains more from Free Zones via customs duties and VAT than Corporate Income Tax. It is a fact that at national level, VAT and customs duties are major revenue items. In 2020, despite COVID-19 issue, the Nigerian Customs Service, Apapa Command, under which the Free Zones in Lagos falls, generated over N13bn as customs duties while over N16bn was generated in 2021. In fact, the Customs service rakes in over N1bn every month in the Free Zones on Lagos axis alone. Where the lawmaker got his false data on tax returns is not clear.”

He explained that the concept of special economic zones operates under a regulatory framework duly enacted into law which provides for the regulatory bodies known as NEPZA and OGFZA to licence both the Free Zones and enterprises operating within them.

“We urge Hon. Oke to be mindful of how hurtful his campaign of misinformation is to the efforts of the federal government to attract foreign direct investment into the country. As at the beginning of 2022, over $25 billion dollars investment with more than 100,000 direct and indirect jobs has been attracted through the free zone scheme.”

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FIRS said it will consequently advise the Federal Government and the Finance Ministry, to henceforth decline approval of any request for the issuance of state bonds or other securities in the capital market; as well as requests for external borrowing and approval for domestic loans from commercial banks or other financial institutions by state and local governments with outstanding unremitted tax deductions.

The tax authority, in a notice, signed by its Chairman, Muhammad Nami, stated that it would also publicly name and shame the defaulting states and local governments while publishing the amounts owed in unremitted tax deductions.

It further revealed that it would also invoke the provisions of Section 24 of its Establishment Act which empowers the Accountant General of the Federation to deduct at source, from the monthly FAAC allocations, unremitted taxes due from any government agency and to thereafter transfer such deductions to the Federation Account and notify the service.

The FIRS thus called on all defaulting states and local governments to promptly remit all unremitted tax deductions within 30 days of the publication of the Notice to avoid it taking these enforcement actions.

The notice noted that some states and LGAs failed to remit to the Service Withholding Tax (WHT) and Value Added Tax (VAT) deductions from payments made to contractors and service providers by them as required by law.

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The federal tax body says it will commence enforcement and recovery of unremitted tax, and will "name and shame" defaulters.

The Federal Inland Revenue Service (FIRS) has stated that it will commence the process of enforcement and recovery of unremitted tax deductions owed by some States and Local Governments in Nigeria.

This decision is contained in a public notice, signed by its Executive Chairman, Muhammad Nami, where the tax authority noted that most States and Local Governments have failed to remit to the Service Withholding Tax (WHT) and Value Added Tax (VAT) deductions from payments made to contractors and service providers by them as required by law.

The notice, highlighting relevant portions of the Companies Income Tax Act (CITA) and the Value Added Tax Act (VATA), stated that Ministries, Departments and Agencies of Government, as well as Parastatals and other establishments were mandated by law to deduct certain taxes while making payments to third parties and remit those deductions to the FIRS.

“The provisions of Sections 78(3), 79(3), 81 of the Companies Income Tax Act (CITA), and Sections 9(I), 13(1) of the Value Added Tax Act (VATA), mandate Ministries, Departments and Agencies of Government (MDAs), Parastatals and other establishments to deduct WHT and VAT while making payments to third parties and remit same to the Service.

“By the provisions of the relevant laws, States and Local Governments are statutorily mandated, as agents of collection, to deduct at source and remit to the Service, all taxes deducted, within twenty-one days,” the notice read.

It further stated that most States and Local Governments have failed to comply with these provisions of the law, despite appeals from the FIRS.

“However, it is regrettable to note that most of the States and Local Governments have failed in their responsibilities of remitting WHT and VAT deducted from payments made to contractors and service providers as required by law.

“The implication is the huge tax debts owed by the States and Local Governments.

“All entreaties by the Service to ensure the remittance of the established unremitted tax deductions by the defaulting States and Local Governments have been unsuccessful as a result of lack of cooperation in adopting the e-payment platforms provided by the FIRS for a seamless deduction and remittance of these taxes.”


Following failure to remit by defaulting States and Local Governments, the FIRS has stated that it will consequently advise the Federal Government and the Minister of Finance, to henceforth decline approval of any request for the issuance of state bonds or other securities in the capital market; as well as requests for external borrowing and approval for domestic loans from commercial banks or other financial institutions by any of the State and Local Governments with outstanding unremitted tax deductions.

The tax authority stated that it would also publicly name and shame the defaulting States and Local Governments while publishing the amounts owed in unremitted tax deductions.

It further stated that it would also invoke the provisions of Section 24 of its Establishment Act which empowers the Accountant General of the Federation to deduct at source, from the monthly FAAC allocations, un-remitted taxes due from any government agency and to thereafter transfer such deductions to the Federation Account and notify the Service.

The FIRS called on all defaulting States and Local Governments to promptly remit all unremitted tax deductions within 30 days of the publication of the Notice to avoid it taking these enforcement actions.

Johannes Oluwatobi Wojuola

Special Assistant to the Executive Chairman, FIRS
(Media & Communication)

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George (not real name) has just gotten a demand notice from the Lagos State Internal Revenue Service (LIRS), stating that he had under-declared his taxable income/ assets and had paid less taxes than he should have. The LIRS demand notice does not make sense to him because his Personal Income Tax (PIT) was deducted at source by his employer, which is a major telecommunications service provider. His fashion store in Lagos Island has also been constantly visited by tax officials and he has ensured that all taxes are paid when due because he does not want any 'government wahala'. Hence, his reaction to the demand notice was, "so where did this notice come from?" He immediately called his tax consultant and arranged a meeting. After presenting relevant documents, including his bank account statements to the consultant, the tax consultant asked: "did the tax people see this?" "Yes", George answered. "Then I guess the problem is with this ?3.2m that is in your business account", the Consultant pointed out. "It does not appear to be part of what you calculated to pay the taxes". George replied, "But it was a gift. My friends gave me some money for my birthday and I put some in the business. Gifts are not part of taxable income, or are they?"

The above scenario may appear very familiar and/or plausible, hence, the article will focus on George's problem.

Nigerians are known around the world to be generous and philanthropic and thus, it is common in Nigeria for persons to advance gifts in money or money's worth or grant friends, family members or close associates special treats, favours, rewards or support. When Nigerians advance gifts to others, both the donor and the receiver or donee hardly ever consider the tax implications of such generosity and gestures.

In other jurisdictions, the implications of such gifting are typically front burner issues, so much that the potential implications are duly considered before the gifting arrangements are concluded. For instance, specialised gift tax exists in some developed nations and there may be special deductions that will accrue to the donor by reason of the gifts awarded. In Nigeria however, hardly would anyone be concerned about the tax implication of the gift given or received. This article therefore, discusses the meaning of gifts under Nigerian law, highlights the provisions of the Personal Income Tax Act (PITA or "the Act" with respect to gifts and then analyses the tax impact of gifts received in Nigeria and the practice in some other jurisdictions.

Taxation of Personal Income in Nigeria
The PITA (as amended) is the enabling law for the taxation of personal income earned by individuals, whether in paid employment or as business proprietors or self-employed. The Act contains elaborate provisions regarding what constitutes income, what income is taxable, what portion of a taxpayer's income is taxable and what portion is exempt from taxation.

Notwithstanding the detailed provisions of the PITA and the recent amendments through the Finance Acts, 2019, 2020 and 2021, there exists some grey areas in the law. One of such areas has again come to fore with public discourse on whether gifts received by individuals constitute taxable income to such individuals or not. In particular, the recent developments where various groups and individuals have overtly come forward to buy political party nomination forms running into millions of Naira on behalf of aspirants (some of which were publicly accepted by such individuals), has again brought this issue into focus.

Meaning of Gifts?
The Nigerian tax legislation does not have an express definition of gift, likewise, the tax legislations in several other jurisdictions do not define gifts. Hence, recourse will be made to judicial and regulatory definitions or descriptions of gifts. According to Black's Law Dictionary, a gift is a voluntary conveyance of land, or transfer of goods, from one person to another, made gratuitously, and not upon any consideration of blood or money. A judicial definition of gifts was made in the case of Gordon vs. Barr,1 as the voluntary transfer of personal property without consideration. In the case of Hays' Adm'rs vs. Patrick,2 gifts were also defined as a parting by an owner with property without pecuniary consideration. The United States Internal Revenue Service defines gifts as any transfer to an individual, either directly or indirectly, where full consideration (measured in money or money's worth) is not received in return.3

From the above definitions, it should be noted that there must be a voluntary transfer from the giver to the receiver for an item to qualify as a gift. The second ingredient is that there must be no consideration for a transfer to constitute a gift.

Provisions of PITA in relation to taxation of gifts / other income

Section 3 of the PITA, provides that tax shall be payable for each year of assessment on the aggregate amounts each of which is the income of every taxable person, for the year, from a source inside or outside Nigeria, including, gain or profit from any trade, business, profession or vocation, any salary, wage, fee, allowance or other gain or profit from employment including compensations, bonuses, premiums, benefits or other perquisites allowed, given or granted by any person to any employee other than expenses incurred by him in the performance of his duties, and from which it is not intended that the employee should make any profit or gain. Other taxable income as stated in Section 3(f) of PITA includes gain or profit including any premiums arising from a right granted to any other person for the use or occupation of any property, dividend, interest or discount and others listed in the Act.

The Third Schedule to the PITA also provides for the different forms of income to be exempted from income tax. The provision of Section 3 and the Third Schedule to the PITA make no specific provision for the inclusion or exclusion of gifts as a source of income in Nigeria. However, Section 3(f) of PITA provides that "any profit, gain or other payment not falling within paragraphs (a) to (e) inclusive of this subsection", forms part of the taxable income of an individual. The clause "other income" as stated above can be analysed intently and given closer considerations. Hence, the next part of this article, analyses possible scenarios that will fit into the definition of gift within the meaning of Section 3 of PITA.

Gift Considerations under PITA
1. Gifts by an Employer to Employees

Gifts received by employees of an organisation from their employer would form part of the taxable income of such employee, as the gifts, if received in cash or kind, will be considered as additional benefits and would be subjected to Pay-as-You-Earn (PAYE) tax. Section 3(b) of PITA only gives exemption to expenses incurred by an employee in the performance of his duties, and from which it is not intended that the employee should make any profit or gain. Thus, other income received even as a gift should form part of the taxable income of the employee.

2. Deed of Gift

A Deed of gift is a method of estate planning in which the possessor of a property called the Donor voluntarily transfers property along with the legal ownership of such property to another person called the Donee, without receiving any consideration in return.

PTA does not make any specific provision for taxation of properties transferred by way of gift through a deed of gift. However, Section 63(1) of the Stamp Duties Act (as amended) provides that any conveyance or transfer operating as a voluntary disposition inter vivos shall be chargeable with the like duty as if it were a conveyance or transfer on sale, with the substitution in each case of the value of the property conveyed or transferred for the amount or value of the consideration for the sale.

In addition, Section 7(2) and 40 of the Capital Gains Tax Act makes provision for characterisation and taxation of gifts received by taxable persons. Section 7(2) of the Capital Gains Tax Act characterises any gift received by a taxable person who had in the first instance acquired the asset as a gift (excluding gifts acquired through an inheritance), as an acquisition and the value will either be the arm's length price at the time the donor acquired the asset by way of a gift or current market value at the time of grant to the donee. On the other hand, Section 40 of the Capital Gains Tax Act states that where an asset is disposed in a manner as described under Section 7(2) above, capital gains shall not be charged on such disposal. In other words, capital gains will not apply to disposal of any asset which is disposed by a gift, if it had been acquired by way of a gift. The only exception is disposal of an asset by way of a gift where it had been acquired as a gift through an inheritance.

3. Cash Gifts

Cash gifts can be termed as voluntary transfer of cash, whether as a physical or electronic transfer. While the PITA does not state any provision for the taxation of cash gifts, Section 48 of the Finance Act 2020 introduced Section 89(a) of the Stamp Duty Act to include Electronic Money Transfer Levy (EMTL). This levy is charged on bank deposits of ?10, 000.00 and above by the recipient of the cash deposit. Hence, cash gifts done through bank transfer will attract EMTL. In addition, the provision of Section 3(f) of PITA which uses the clause ''other payment'' will cover cash gifts, and such gifts will be taxable under PITA. However, it may appear that this extension of the scope of PITA to taxation of payment, that is, cash gift, will not be broad enough to cover taxation of non – cash gifts.
Income Derived from Assets Received as a Gift (i.e. Non – Cash Gifts)
In our view, where a gift is given as a non-cash gift, the provisions of PITA will not apply and it will not qualify as taxable income. However, where income is derived from properties received as gift in the hands of the recipient, the provisions of PITA will apply because it clearly provides for the taxation of such income under Section 3.

What Obtains in Other Jurisdictions
United Kingdom (UK)
Section 1 of the United Kingdom Inheritance Tax Act 1984 (as amended) provides for the taxation of gifts in the United Kingdom. In the United Kingdom, there is a seven (7) year rule on gifts tax, which states that no tax is due on gifts if you live for seven (7) years with the exception of gifts given as part of a Trust. However, if the donor dies within 7 years of giving a gift, tax would apply on the gift item depending on when the gift was given. The amount of tax due would vary depending on when the gift was given. The tax due on gifts in the United Kingdom is known as inheritance tax.

United States of America (USA)
Section 2501(a)(1) of the Internal Revenue Code provides that a tax is imposed for each calendar year on the transfer of property by gift during such calendar year by any individual, resident or non-resident. However, gifts that are not more than the annual exclusion for the calendar year, gifts to a political organisation for its use, gifts to charities, medical or tuition expenses paid directly to a medical or educational institution on behalf of someone, and gifts passed on to an individual's spouse (which are exempted from gift tax until the spouse's death), do not form part of taxable gifts.

India
In India, the Gift Tax Act 1958 provides for the levy of gift tax. Section 4 of the Act outlines gift items that are considered as income for tax purpose. Additionally, Section 6 of the Gift Tax Act provides for method of valuation of gifts in order to determine the value of the portion of the gift to be taxed.

Ghana
Section 105(1) of the Internal Revenue Act 2000 (IRA as amended) provides that gift tax shall be payable by a person on the total value of taxable gifts received by a person by way of gift within a year of assessment. The Fourth Schedule of the IRA further provides for the rates of tax to be applied on taxable gifts in every relevant year of assessment. Specifically, gifts are included as part of the income of the recipient and forms part of the taxable income of the recipient of the gift.

Conclusion
The Nigerian Government has been seeking measures to expand its revenue generation streams and one avenue available to be explored is for the government to close the loopholes in the tax administration system in order to increase its ability to generate revenue and bring more people, income and taxable items within the tax net. This can be achieved by targeted amendments to some existing grey areas in the tax laws.

Unlike other jurisdictions, PITA does not specifically provide for the taxation of gifts in Nigeria. However, the Nigerian Government can consider an amendment to Section 3 of PITA to include gifts as part of the taxable income in the hands of the beneficiary or expressly exempt such income from the income taxable for individuals. Other considerations could include the establishment of a threshold for the value of gifts to be taxed in the hands of the beneficiary as other jurisdictions have enacted very comprehensive legislation on taxation of gift. Given recent happenings in our polity, this may just be the right time for the tax authorities to begin to consider amending the relevant laws to expand its scope and bring clarity to this area.


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Tax from firms in the information and communication sector fell by N21.7bn from N51.05bn in the fourth quarter of 2021 to N29.35bn in the first quarter of 2022.

This is 42.51 quarter-on-quarter decrease according to data from the National Bureau of Statistics. In its ‘Company Income Tax’ documents for both quarters, the NBS described the ICT sector as one of the major contributors to CIT in the nation.

In Q1 2022, ICT contributed 14.03 per cent and 19.72 per cent in Q4 2021 to CIT.

The statistics body said, “In terms of sectoral contributions, the top three largest shares in Q1 2022 were manufacturing with 21.31 per cent, information and communication with 14.03 per cent, and financial and insurance with 12.20 per cent.

“In terms of sectoral contributions, the top three largest shares in Q4 2021 were information and communication (N51.05bn) with 19.72 per cent; manufacturing (N45.09bn) with 17.42 per cent; and financial and insurance activities (N31.06bn) with 12.00 per cent.”

According to the NBS, data for CIT is provided by the Federal Inland Revenue Service and verified and validated by it.

Recently, the Federal Inland Revenue Service said MTN Nigeria Communications Plc and Airtel Networks Limited were two of its top 10 performing taxpayers in 2021. Also, MTN in April disclosed it paid about N757bn direct and indirect tax to government agencies in 2021.

In a statement signed by the Company’s Secretary, Uto Ukpanah, the firm said, ““In 2021, MTN Nigeria’s total tax contribution to all government agencies including the FIRS amounted to N757.6bn while FIRS collected a total of N6.4trn tax revenue in the year.

“Specifically, MTN Nigeria paid a total of N618.7bn in direct and indirect taxes to the FIRS in the 2021 tax year, representing approximately 13.5 per cent of the total FIRS collection for the year.”

Lagos earned N418bn from tax in 2020 – LIRS
MTN disclosed that it paid N46.77bn in taxes in Q1 2022 in its earnings release for the quarter. Airtel’s tax bill was not explicitly stated in its earnings release.

According to the Association of Licensed Telecoms Operators of Nigeria, telecom companies pay in excess of 36 different taxes and levies to three tiers of government.

A recent report by SBM Intelligence disclosed that the telecoms industry suffers from over taxation as a result of its sustained growth in the last 20 years.

The report titled, ‘Taxing Nigeria’s sub national economies to oblivion’, said, “At the federal level, telecommunications companies are expected to pay taxes such as Companies Income Tax, the Capital Gains Tax, Withholding Taxes, Stamp Duty, National Industrial Training Fund, Employees Compensation Scheme, The Tertiary Education Trust Fund, National Housing Fund contributions, Contributory Pension Schemes, and Customs Duties.

“These taxes are applicable to all incorporated companies in Nigeria. There are also sector-specific taxes and levies such as the Annual Operating Levy paid to the Nigerian Communications Commission by all holders of licences issued by the regulator, the National Cybersecurity Fund, the National Information Technology Development Fund Levy and Right of Way charges.”

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“Those international organisations in Nigeria if they have a dispute with Nigeria they’ll quickly go to the court and it will not be a Nigerian court, it will be an international court. It will cost Nigeria money to hire lawyers, among other things.

“I think the idea of not signing the agreement remains the best option for Nigeria.

“For me, it’s in a good direction. It’s not only in Nigeria, there are other countries that hold on from signing the new tax agreement,” Ilias said.

Adefolarin Olamilekan is a political economist and development Researcher.

“This are interesting time as the uncertainty around global economy continues to unravel.

“Moreso, this period mark the time nations across the face of the earth recover from Covid-19 shock, particularly as major international bodies finding ways to improve economy of member nations.

The OECD is not short in making things better for its members with innovative international tax system.

However, the controversy trailing the Agreement on Online Business Transactions signing is understandable. It is the outplay of international political economy that third world countries in the pass failed to negotiate from a strong perspective.

“And at this point, the Federal Inland Revenues Services (FIRS) as the Nigerian state custodian of tax collection having understood implications of signing the agreement considered the impacts of such agreement on local players especially as foreign players dominate the space with technology ownership and other advance skills that is a major ingrediate of online businesses.

“Chiefly also, FIRS may be right not to hurriedly sign this document in the sense that our national interest may not be protected as well as if we think through what this could imply on our national economic security.

“Although, FIRS not signing it now those not stop it from signing it in future. So far it will be reviewed and grevious areas can be addressed because this may also be one of the challenges that other OECD members from African can take advantage of to renegotiate from a stronger point because, Africa and Nigeria particularly need the revenue more now than before,as millions of Nigeria on daily basis conduct transactions online. FIRS need, however to engage stakeholders across board to get the best out off the law,” Olamilekan said.


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President Muhammadu Buhari on Friday, 31 December 2021 signed the 2022 Appropriation Bill (“the Budget”) and the 2021 Finance Bill into law.

The Budget

The Budget signed by the President has an expenditure of ₦17.12 trillion, which is an upward adjustment of ₦736 billion (4.45%) when compared to the proposed amount of ₦16.39 trillion presented by the President to the National Assembly on 7 October 2021. Additionally, the oil benchmark was revised from $57 per barrel to $62 per barrel.

2021 Finance Bill

The President also assented to the 2021 Finance Bill, thereby introducing the 2021 Finance Act (FA 21), effective 1 January 2022. The FA 21 is expected to make changes to twelve (12) laws comprising Companies Income Tax Act, Personal Income Tax Act, Capital Gains Tax Act, Stamp Duties Act, Tertiary Education Trust Fund [Establishment] Act, Value Added Tax Act, Insurance Act, National Agency for Science and Engineering Infrastructure Act, Nigeria Police Trust Fund [Establishment] Act, Finance Control and Management Act, Federal Inland Revenue Service [Establishment] Act and Fiscal Responsibility Act.

We are analysing both laws and will provide a detailed analysis as soon as possible.

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The Federal Inland Revenue Services, FIRS, has released the communique it issued at the end of its 2nd annual tax dialogue.

The dialogue themed “Tax Harmonisation for Enhanced Revenue Generation” took place at the Banquet Hall of the State House, Abuja on Tuesday, 29th March 2022. The event was declared open by President Muhammadu Buhari and had other important dignitaries in attendance.

One significant communique issued at the end of the dialogue was that the coming general election should be an opportunity for intending political office holders to showcase their tax agenda.


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Muhammad Nami, executive chairman of the Federal Inland Revenue Service (FIRS), has called for improved collaboration among African countries to effectively tax digital economy.

According to a statement issued on Tuesday by Johannes Wojuola, media aide to the FIRS chairman, Nami said this at a technical assistance programme organised by African Tax Administrators’ Forum (ATAF) held in Lomé, Togo.

Wojuola quoted Nami as saying that some African countries had endorsed the Organisation for Economic Cooperation and Development (OECD) inclusive framework’s global solution to the tax challenges of the digitalised economy.

“Our analysis continues to show that the possible cost of administering and implementing the complex rules will far outweigh the expected revenue accruing from its implementation,” he said.

“I, therefore, urge the African Tax Administrators Forum (ATAF) to join the discussion at the UN Tax Committee of Experts, South Centre.

“The forum should also collaborate with all other well-meaning stakeholders to explore alternative rules that will enable African countries to effectively subject the digital businesses and base eroding payments to tax in our jurisdictions.

“These collaborations should extend to other rules developed and implemented at international level for the taxation of multinational enterprises, such as the tax treaty, exchange of information and transfer pricing rules.

“ATAF should collaborate with the United Nations Development Programme (UNDP) to explore opportunities for Africa within the programme’s tax for the Sustainable Development Goals (SDGs) initiative.

“It should also ensure that African countries are able to generate appreciable revenue to fund SDGs.”

The FIRS chairman emphasised the need for capacity building for members in respect of base erosion and profit shifting actions by multi-national corporations and on taxation of the digital economy.

According to him, Nigeria continues to hold the view that the outcome will produce very minimal revenue comfort for African counties.

“This is instructive, considering the implementation challenges that developing jurisdictions will face due to the complexity of the Pillars I and II rules,” he said.

“It is crucial for the ATAF technical assistance to look toward improving the capacity of member-countries’ tax administration through the digitisation of operations.”

Nami further urged ATAF to organise peer-to-peer knowledge sharing sessions between beneficiaries of the technical assistance programmes and intensify technical assistance on international tax rules, particularly in the areas of tax treaties, transfer pricing and exchange of information.

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Founder and Chairman of Phillips Consulting, Mr. Foluso Phillips, at the weekend suggested that Nigeria should begin to tax countries extracting Nigeria's human assets abroad.

He said income tax received by these countries should be shared with Nigeria "because of the investment we have made in training our people."

According to him, "even for those who were trained abroad, each one was funded by Nigerian parents. I know that would be a hard sell, but it's such a loss to this country for now."

He spoke in Lagos while delivering a lecture on "Nigeria American Trade Relations - Back to the Drawing Board" at the inauguration of the 19th National President of the Nigerian-American Chamber of Commerce (NACC), Dame Adebola Williams.

The foremost business and management consultant who stated that the essence of trade to any country was to always promote made-in-Nigerian goods however lamented that Nigeria has failed to develop competence in its natural resources to be able to export raw materials.

According to him, it would be counterproductive to export the nation's raw materials without adding any value to them.

He said this is what made South Africa to stand out as it produces goods for exports and added a lot of value to them.

He however said the only areas where Nigeria is doing well in the global area are areas such as Fashion, Art, the entertainment industry, Digital technology, Design and Intellectual engagement "in which the government has nothing to do with."

"No need for licenses, permission, regulation, or institutional roadblocks," he stated.

Quoting data credited to The Federation of State Medical Boards, he observed that there are 3,895 Nigerian-educated doctors licensed to practice medicine in the US.

Specifically, he added that Nigerians accounted for 1.7% of all licensed physicians who were international medical graduates.

"It was further disclosed that 6,536 licenses were held by these 3,895 doctors, with the greatest number of licenses issued by the states of Texas (11%), Georgia (7%) and New York (6%).

"It's not about us facilitating access to our markets for the USA, it should be about what we can sell and ship to them as products or services from Nigeria, appreciating that the range of such products and services have expanded and coming from new sources within the economy.

"The job of the Chamber is to boost trade - our trade to the USA. The USA already knows how to access our market, we need to know how to access theirs for the nature of products and service we provide.

"The United Kingdom and especially Canada have asked our young talented people to emigrate to their countries. Of course, they are picking on our best talents, and we are all without exception feeling the pinch.

"SMEs have become important to our economy in an extremely rapid way and the areas in which SMEs are dominating are being ignored because they are not traditional.

"Maybe it's time for us to not only accept this situation but begin to trade these skills as an asset of the country."

The industrialist tasked the chambers of commerce to "change the paradigm of Nigeria's trading policy, which has hitherto been challenged because of our industrial inabilities."

"This is my proposition to all chambers and organisations which have taken upon themselves the responsibilities for driving trade, industry and commerce between our country and others. No need for help from state or national civil servants.

"I am not here to bash the USA - God forbid, I love the US, but I do want to highlight the key essence of trade to any country and that is to always promote your own products and in all circumstances without any apology, and that is my first lesson or advice to the Nigeria America Chamber of commerce. It's about being proudly Nigerian. It's about "Made in Nigeria".

"Our starting point is to understand, appreciate and act on the concept of comparative advantage. Most countries have obvious comparative advantages, which is usually driven by that which nature provides in abundance and to which value must be added to create wealth for the nation. What is more important is the concept of building core competence, which add value to the comparative advantage you have. Competences are continually enhanced through the process of adding value to your natural resources in one shape or another."

The President of NACC in her acceptance speech promised that the chamber would not relent in its activities to facilitate trade between Nigeria and the US.

She however regretted that the insecurity, corruption, bad roads and high inflation had frustrated doing business in Nigeria and average Nigerians.

"Putting food on the table has become so tough. The rich are truly crying," she added.

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SHAREHOLDERS of the Central Securities Clearing System Plc on Friday approved the proposed total dividend of N3.7bn by the board of the company.

They gave their nod during the company’s 28th annual general meeting in Lagos.

The company said it was reinforcing the value accretion to its equity owners, which had seen a notable rise in share price of the company over the past year.

CSCS said the N3.7bn dividend, which translated to 83.7 per cent payout ratio, reflected the resilient profitability of the company, notwithstanding the impact of lower trading activity on most Exchanges in the Nigerian capital market and inflationary pressures.

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“Consolidating on its diligent earnings diversification drive, the company grew revenue from core operations and ancillary services by 39.2 per cent to N6.4bn from N4.6bn in 2020, as it almost quadrupled earnings from ancillary services from N526m in 2020 financial year to N2.2bn in 2021 financial year,” it stated.

It added that income from ancillary services contributed 33.3 per cent and 21.5 per cent of operating revenue and total income for the year respectively, underpinning management’s strategy towards diversifying and strengthening the earnings fundamentals of the company, with the ultimate objective of creating sustainable and superior wealth for shareholders and its broader stakeholders.

Addressing shareholders, the Chairman, Board of Directors, CSCS Plc, Mr Oscar Onyema, said, “Notwithstanding the volatile operating environment and moderated capital flows, as reflected in the subdued capital market activities, the earnings fundamentals of your company remained resilient and indeed stronger than ever.


“This fact is evident in the impressive revenue growth of 39.2 per cent, driven by stellar growth in ancillary income. The equity market recorded one of the weakest secondary market activities in the past few years, with the average daily trade value of N3.9bn, some 10 per cent below the trading activity recorded in the 2020 financial year, explaining the tepid transaction fees.

“Albeit income from ancillary services recorded a significant boost, contributing N2.2bn or 21.5 per cent of total income in 2021FY, from N526m or 11.3 per cent of total income in 2020FY.”


The Chief Executive Officer, CSCS Plc, Mr Haruna Jalo-Waziri, said, “Reflecting the ingenuity of our participants and more importantly quick adoption of new remote access technologies, the Nigerian capital market remained active through the prolonged COVID-19 crisis.

“The collaboration of our regulator and participants has been incredible in sustaining our operational protocols and IOSCO PFMI standards.

“Though clearing and settlement activity waned by 10.2 per cent due to lower participation of foreign investors in the Nigerian equity market and a host of macro challenges, we are excited at the growth in our depository assets by 6.1 per cent to N23.0tn, reflecting new listings of securities across our multiple Exchange partners as well as issuers’ and investors’ confidence in the safety and secured accessibility of our systems.”

Hello, subscribers — if the number you are calling is not switched off, you will soon pay a higher tariff.

This is because President Muhammadu Buhari has approved the collection of five per cent as excise duty on telephone recharge cards and vouchers, TheCable understands.

The charge is part of new items on the list of goods liable for excise duty on the Finance Act in the country.

Excise duty is a levy charged at the time of manufacturing. It is also a form of indirect tax on the sale or consumption of certain goods, products, services or activities such as tobacco, alcohol, narcotics, gambling etc., mainly to discourage their use and consumption. Nigeria’s Finance Act has extended the list to include beverages, non-alcoholic drinks etc.


According to a circular seen by TheCable, Zainab Ahmed, minister of finance, budget and national planning, directed the Nigerian Customs to create a tariff line for the collection of the excise on mobile telephones, electricity meters (components) and set up boxes at five per cent.
TheCable learnt that the federal government is expected to raise at least N150 billion from the duty while customs will pocket about 10 billion, a 7 per cent collection fee.

The circular conforms with another list of excisable items by customs to include telephone recharge cards and vouchers at five per cent.

The Cable also understands that the collection was part of new items on the 2020 Finance Act signed by President Buhari. Although n
rate was not stated, it is clear that the president might have okayed the collection of the duty at five per cent as empowered to do by the Act.

Section 21 (1) of the Act describes goods liable to excise duty as “Goods imported and those manufactured in Nigeria and specified in the first schedule of this Act shall be charged with duties of excise at the rate specified under the duty column in the Schedule.

Subsection 2 further added that “telecommunication services provided in Nigeria shall be charged with duties of excise at the rate specified under the duty column in the Schedule as the President may by Order prescribe pursuant to section 13 of this Act”.

In the current (2021) finance act, a new section was inserted to include “excise duty on non-alcoholic, carbonated and sweetened beverages shall be charged at a specific rate of N10 per litre”.

The new 5 per cent levy on recharge cards will increase call costs and add to other taxes levied on telcos operating in the country. Some of these levies include the right of way charges, National Information Technology Development Fund Levy, National Cybersecurity Fund, and Annual Operating Levy in addition to existing statutory taxes like tertiary education tax, companies income tax, and value-added tax.

On Wednesday, telecommunication companies under the Association of Licensed Telecom Operators of Nigeria (ALTON) asked for upward reviews in voice calls, short message services (SMS) and data costs. In a recent letter addressed to the Nigerian Communications Commission (NCC), ALTON cited the rising energy costs and high operating expenses as major reasons.

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The Financial Times and data company Statista have published their inaugural ranking of Africa’s fastest-growing companies, with several major South African firms included on the list.

The companies were ordered by the highest compound annual growth (CAGR) in revenues between 2017 and 2020.

The ranking was created through a complex procedure. Although the search was extensive, the list is not exhaustive as some companies did not want to make their figures public or did not participate for other reasons.

Statista identified thousands of companies in Africa as potential candidates for the ranking, through research in company databases and other public sources. These companies were invited to participate in the competition by post and email.

The process required submitted revenue figures to be certified by the chief executive, chief financial officer or an executive committee member of the company.

South African companies

South Africa is the most represented country on the list (24), following Nigeria (20) and Kenya (9). These are also the markets that have attracted the most venture capital and where unicorns (companies valued at $1 billion+) and would-be unicorns have grown, the Financial Times said.

Precious metals group Northam Platinum was ranked as the fastest-growing company in South Africa (10th on the continental list), beating out financial services group Long4Life (12th) and fellow mining company Royal Bafokeng (14th). South Africa’s largest company by market cap, Naspers, features 37th on the overall list.

Company name Sector Absolute growth rate Compound annual growth rate
Northam Platinum Ltd. Precious Metals 331.7% 62.8%
Long4Life Ltd. Financial Services 304.9% 59.4%
Royal Bafokeng Platinum Ltd. Precious Metals 282.4% 56.4%
eAdvance Pty Ltd. (SPARK Schools) Education 276.3% 55.5%
Yoco Technologies Pty Ltd. Fintech 267.4% 54.3%
Stor-Age Property REIT Ltd. Support Services 158.0% 37.2%
Entelect Software Pty Ltd. Technology 148.8% 35.5%
Purple Group Ltd. Financial Services 118.3% 29.7%
Anglo American Platinum Ltd. Precious Metals 109.8% 28.0%
Sea Harvest Group Ltd. Food & Beverage 105.3% 27.1%
Naspers Ltd. Media 98.8% 25.7%
Sygnia Ltd. Financial Services 98.4% 25.7%
Leatt Corp. Retail 91.7% 24.2%
The Training Room Online Education 85.6% 22.9%
Iser Pty. Ltd. (Expert Stores) Retail 73.5% 20.2%
hearX Group Pty Ltd. Technology 70.1% 19.4%
Afrimat Ltd. Precious Metals 65.8% 18.4%
Harmony Gold Mining Co. Ltd. Precious Metals 50.0% 14.5%
Cognition Holdings Ltd. Technology 46.0% 13.5%
Transaction Capital Ltd. Financial Services 44.4% 13.0%
Impala Platinum Holdings Ltd. Precious Metals 43.3% 12.8%
Gold Fields Ltd. Precious Metals 40.9% 12.1%
Zulu Lounge SA Pty Ltd. Personal & Household Goods 29.8% 9.1%
Read: South Africa’s unemployment rate is heading to 40%

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Billionaire entrepreneur, Elon Musk, on Wednesday, said Twitter commercial and government users may have to pay to use the micro-blogging platform.

Twitter on Monday, April 25, confirmed the selling of the platform to Musk in a deal valued at $44 billion.

The sale was a dramatic shift for the board, which had originally maneuvered to block Musk from taking the social media network private.

“Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated,” Musk said in a joint statement announcing the takeover.

But confirming fears by the majority that his takeover might lead to commercialisation of the social media platform, Musk in a tweet in the early hours of Wednesday, said commercial and government users will pay for the platform.

He, however, said the micro-blogging site would “always” remain free for casual users.
Justifying his move to commercialise the platform for commercial and government users in a series of tweets, the billionaire entrepreneur said free services led to the downfall of great businesses.

He wrote, “Twitter will always be free for casual users, but maybe a slight cost for commercial/government users.
In an earlier tweet, Musk said, “Ultimately, the downfall of the Freemasons was giving away their stonecutting services for nothing.”

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