₦airaland Forum

The Corporate Affairs Commission (CAC) has explained that the Companies and Allied Matters (CAM) Bill 2019 will allow an individual to form a company and make use of Common Seal option for companies. The Commission said the Bill will also greatly enhance the ease of starting and growing business in the country and ensure more appropriate regulation for Micro, Small and Medium Scale Enterprise.
“It will enhance transparency and shareholder engagement; align regulatory framework with international best practice for competitiveness and, in the context of a global economy, make Nigeria an investment destination of choice by attracting and growing investments,” he said. According to him, the Bill will also dispense with the Statutory Declaration of compliance by Legal Practitioners for Registration of Companies, Disclosure of Beneficial Ownership amongst others. In a statement by Head, Public Affairs Godfrey Ike on Monday in Abuja, the Commission said it is in consonance with the provision of the Acts Authentication Act Cap. A2, Laws of the Federation of Nigeria 2004.

Source: Blueprint

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THE International Monetary Fund (IMF) has said that Nigeria and other countries outside the Organisation for Economic Co-operation and Development (OECD) group lostabout $200 billion annually due to unfair global corporate tax system exploited by companies to shift profits to low-tax location. IMF President, Christine Largade disclosed this last week while speaking on Corporate Taxation in the Global Economy at the Peterson Institute for International Economics, Washington D.C.
Stressing the need for new corporate tax rules across the globe, Largade said: “It may be difficult, but it is possible to create a corporate tax system that better reflects the changes in the global economy.” Highlighting three major reasons for urgent reform of global corporate tax system, she said: “First, the ease with which multinationals seem able to avoid tax, and the three-decade long decline in corporate tax rates, undermines faith in the fairness of the overall tax system. “Second, the current situation is especially harmful to low-income countries, depriving them of much- needed revenue to help them achieve higher economic growth, reduce poverty, and meet the 2030 Sustainable Development Goals. Advanced economies have long shaped international corporate tax rules, without considering how they would affect low-income countries. “IMF analysis shows, for example, that non-OECD countries lose about $200 billion in revenue per year, or about 1.3 percent of GDP, due to companies shifting profits to low-tax locations. These countries need a seat at the table. The Platform for Collaboration on Tax, a joint effort by the IMF, World Bank, OECD and the UN is helping on this front. “Third, an impetus for rethinking international corporate taxation stems from the rise of highly profitable, technology-driven, digital-heavy business models. These business models rely heavily on intangible assets, such as patents or software that are hard to value. They also demonstrate that assuming a link between income and profits and physical presence has become outdated. ‘This in turn has sparked fairness concerns. Countries with many users or consumers of digital services find themselves with little or no tax revenue from these companies. Why? Because they have no physical presence there. So, we clearly need a fundamental rethink of international taxation. Yet this means countries must work together. Making progress requires coordination among all, and in the right direction.”

Source: Vanguard

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A total of 14 commercial banks listed on the Nigerian Stock Exchange are billed to pay N103bn in taxes to the Federal Inland Revenue Service for the 2018 financial year. An analysis of the recent financial statements filed by the banks on the NSE showed that Ecobank Transnational Incorporated will pay the highest amount of N33.61bn. A breakdown of the amount revealed that the tax liability was originally N35.076bn, but a deferred tax asset of N1.46bn was deducted from the amount. Guaranty Trust Bank Plc has the second highest tax liability of N30.85bn, followed by United Bank for Africa Plc, which reported a tax liability of N14.30bn. UBA listed its tax components to include N8.98bn current tax, and N550m Information Technology tax and a deferred tax of N5.32m.
Stanbic IBTC Bank Plc reported a tax liability of N13.712bn, followed by Zenith Bank Plc, which is to pay N4.052bn minimum tax. An analysis of the financial statement of Zenith Bank showed that the bank had a total tax liability of N26.63bn, but was assessed based on the minimum tax rule because of a significant non-taxable income that resulted in a taxable loss for the bank. Zenith Bank said included in the total tax amount was N18.04bn dividend tax for 2018 financial year, but it was liable to dividend tax of N25.43bn, which represented 30 per cent of the N84.77bn dividend paid as the Nigerian tax laws required companies to pay tax calculated at 30 per cent of the higher of taxable profit and dividend paid. However, the total Company Income Tax payable based on minimum tax was N4.35bn as the bank had tax paid in the prior year and tax credits amounting to N3.04bn. The difference between income tax payable assessed on dividend and income tax payable assessed on minimum tax amounted to N18.04bn, which was charged as tax expense during the period. Fidelity Bank Plc has a tax liability of N2.16bn, made up of a current tax of N1.91bn and IT tax of N251m. Access Bank Plc reported a tax payable of N1.65bn, which comprised CIT of N4.37bn, IT tax of N752.4m and Capital Gains Tax of N17.8m, after which a deferred tax of N63.49bn was deducted. Wema Bank Plc is billed to pay a tax of N1.47bn for the 2018 financial year, which can further be grouped into CIT of N351.8m, National Information Technology Development Agency tax of N56.06m, and a deferred tax of N1.063bn. Sterling Bank Plc reported a tax of N271m for the period, saying it paid N710m during the year. It had a tax balance brought forward of N232m, a current tax charge of N173m, CIT of N173m and IT tax of N98m. Sterling Bank said the basis of its income tax for 2018 was 30 per cent of N575.808m, which was the value of the dividend paid to shareholders in 2018 and relating to the 2017 financial year. It added that it was not liable to pay CIT in 2017 as it did not have any taxable profit. It also did not pay any dividend in 2017 and had more than 25 per cent imported capital as at the reporting date, which made the bank got an exemption from minimum tax as stated in Section 33(3) of the Company Income Tax Act as amended 2007. According to the bank’s financial report, an unutilised capital allowance of N42.206tn and unused tax losses carried forward and available at N46.813tn were recorded. It said it had deductible temporary differences of N86.33tn to be offset against future taxable profits. However, no deferred tax asset was recognised in respect of the items due to uncertainties regarding the timing and amount of future taxable profits. First City Monument Bank Plc reported a tax liability of N123.3m, made up of N107.1m of dividend tax and N16.2m income tax. The bank said it was assessed based on the minimum tax legislation for the year ended December 31, 2018 because of a tax exemption granted via CIT (Exemption of Bonds and Short-Term Government Securities) Order, 2011 as contained in a gazette issued by the President of the Federal Republic of Nigeria, which took effect from January 2, 2012. It said all the provisions of the CITA that mandated a minimum tax assessment, where a taxpayer did not have any tax liability arising from its tax assessment, were applied. As of the time of collating the results, Diamond Bank Plc, First Bank of Nigeria Limited, Union Bank Plc and Unity Bank Plc had yet to file their 2018 financial statements, so, their financial statements for the nine-months period ended September 30, 2018, were used. Diamond Bank reported a tax of N398.4m, Union Bank reported N164m, Unity Bank reported N57.94m and First Bank reported N38m. Union Bank said it was not liable to pay income tax as it recorded a tax loss for the period. It said it was exempted from paying minimum tax under the Act as it had imported share capital of over 25 per cent. No education tax was charged because the bank has no assessable profit for the period. The Head, Economic Research and Policy Management, Securities and Exchange Commission, Mr Afolabi Olowookere, said of the N5.8tn realised by the FIRS in 2018, listed companies contributed about 60 per cent of the value. He urged exchanges, capital market operators and the Federal Government to work together to increase listing of companies on the stock market, not only for revenue generation but other benefits as well. The Vice-President, Association of Stockbroking Houses of Nigeria, Mr Akinsola Akeredolu-Ale, said most companies that were reluctant to come to the stock market were hiding their financials or were scared of take-over by wealthy Nigerians. He said, “Once the government can work together with the FIRS to enforce tax laws, there would be no hiding place for companies. Thus, they will be forced to come to the market.” A Professor of Economics at the University of Nigeria, Nsukka, Hyacinth Ichoku, said the Corporate Affairs Commission should also be involved in the tax generation process. According to him, the collaboration of the FIRS, Federal Government and the CAC will improve and increase internally-generated revenue for the government. He said, “There are a lot of unregistered companies that are making so much money and not paying taxes. When the CAC can tackle this issue, they will be forced to pay taxes. “Also, the CAC should simplify the registration requirements for companies to attract them. It should also do a lot of enlightenment for them, after which it can apply appropriate sanctions to defaulting companies.” Ichoku urged the government to reduce its concentration on Petroleum Profit Tax and increase its concentration on CIT.

Source: Punch

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The Vice Presidential candidate of the Peoples Democratic Party, PDP, in the February 23 presidential election, Mr. Peter Obi, has described as gratifying, the recent warning of All Progressives Congress, APC, leader, Bola Ahmad Tinubu, against the removal of Value Added Tax otherwise called VAT. Obi said that Tinubu’s warning which makes economic sense given the situation in the country was at variance with that of his party and goes to underscore the uncoordinated campaign they dished out to Nigerians. The VP candidate said in a statement from his media office on Sunday that the position of the PDP and the presidential candidate which was made loud and clear during the electioneering is that tax must be relaxed to act as incentive to investors.
Obi insisted that the right way to go to shape up the economy given the magnitude of unemployment in the country is to have an attractive economic policy that will be inviting to entrepreneurs and investors. He stated that APC’s earlier stance of increasing tax, VAT inclusive shows the height of insensitivity of a government that careless about the plight of the populace. Obi said that Tinubu’s warning is good but he should have been humble enough to credit to the opposition party instead of making it feel as if it has been the position of the party. “It’s extremely unrealistic for anybody to think of growing the economy of this country, and creating jobs just by increasing tax, it’s too a simplistic approach”, he noted. The former Anambra State Governor said that he hopes that Tinubu would go further also to advice his party to embrace restructuring as that is the only option left to move this country forward. “Anybody thinking that this country will work without tinkering with the political and economic structure is deceiving himself because no nation grows on injustice”, he added. Obi furtehr described as unfortunate the fact that Nigeria with all her potentials is among the three African countries according Pew Research Center Where 45% of the adult population are desiring to leave the country.

Source: Dailypost

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A Lagos High Lagos in sitting in Igbosere on Monday renewed a bench warrant for the arrest of actress and producer, Monalisa Chinda Coker, over a tax evasion charge. The presiding judge, Adedayo Akintoye renewed the order for Coker’s arrest following her repeated failure to honor court summons. When the case was called Monday, neither Coker nor her legal representatives was present in court.
Prosecution counsel, Babatunde Sumonu, informed the judge that the bench warrant issued in January had yet to be effected. “The bench warrant is to continue,” Justice Akintoye held. Justice Akintoye made the original order for Coker’s arrest last January 21, following an application by the Lagos State Ministry of Justice. The state alleged that Coker repeatedly failed to honour a court summons. The 44-year-old actress is facing a two-count charge of failing to file annual tax returns and pay income tax for her company, Monalisa Code Production, over a six-year period. Proceedings have been adjourned till June 5.

Source: Gtv.ng 

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The Manufacturers Association of Nigeria (MAN) has asked the Federal Government to tread with caution in the drive for improved revenue. The Director-General of MAN, Mr Segun Ajayi-Kadir, said this in a statement on Wednesday while reacting to the plan by the government to increase the Value Added Tax (VAT).
Officials of the Federal Ministry of Finance had defended the Medium-Term Expenditure Framework (MTEF) that VAT be increased by 50 per cent during a presentation in the Senate. Ajayi-Kadir, however, said such policy was not ‘manufacturing friendly’, adding that implementing it would have a negative effect as a result of the planned increase in minimum wage. “As plausible as the recommendation to increase VAT may look, implementing it at this time would boomerang because the timing is inappropriate, especially at a time when the minimum wage of N30,000 was just agreed upon,” he stated. The MAN DG added, “This could send a wrong signal that the government is not sensitive to the plight of the low- and middle-income earners, who are clearly in the majority. The Nigerian economy will be in a more vulnerable state if VAT is increased. “No controversy, the burden of the tax would be shifted to the Nigerian consumers that are already struggling, the economy would certainly experience demand crunch, inventory of unsold items would soar, profitability of manufacturing concerns would be negatively impacted, many factories will witness serious downturn or wind down operations.” Ajayi-Kadiri, therefore, advised the government to widen the tax net rather than increase the rate in order to meet the growing need for more revenue to address the development objective of the country. He also appealed to the government not to increase the VAT at this time but consider the implementation of the afore-mentioned tax specific recommendations. The MAN DG asked the government to continue to ramp-up support for the manufacturing sector in the best interest of the people.

Source: Channels

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Federal Inland Revenue Service (FIRS) has issued a warning to defaulting taxpayers on the impending lien to be imposed on their bank accounts for non-compliance. In the publication issued, FIRS admonished business entities with annual banking turnover of ₦100million and above and those who have been collecting Value Added Tax (VAT) and deducting withholding tax (WHT) without remitting same to it, to regularise their tax status by 15 March 2019 or risk being locked out of their bank accounts.
You would recall that FIRS recently instructed banks to suspend lien placed on defaulting taxpayers' accounts for a period of 30 days, without clearly stating what will happen to the bank accounts at the expiration of the 30-day period. By this notice, FIRS has cleared all doubts on events to follow after expiration of the 30-day grace period. FIRS is empowered under Section 31 of the FIRS (Establishment) Act (FIRSEA) and Section 49 of the Companies Income Tax Act (CITA) to appoint any person to be the agent of a taxable person for the purpose of recovering tax debts from such taxable person. Also, the agent appointed may be required to pay any tax payable by the taxable person from any money held by the agent on behalf of, or due to, the taxable person. However, the FIRS power of substitution derived from the sections noted above has been greeted with widespread criticism from various stakeholders and raised a number of legal questions. Further, the approach has resulted in disruption of business operations of taxpayers and ultimately, ease of doing business in Nigeria. We will continue to monitor developments in this space and provide updates as soon as they become available. Meanwhile, we advise taxpayers to continue to review their tax records and ensure full tax compliance to avoid disruption of their business operations.

Source: Mondaq

Tax administration and the system of taxation in Nigeria was once again brought to the fore when President Muhammadu Buhari on Tuesday reiterated the federal government’s resolve to continue to sensitise and encourage Nigerians to cultivate the culture of paying taxes by ensuring fair policy implementation and effective utilisation of resources. The Special Adviser to the President on Media and Publicity, Mr Femi Adesina, said Buhari stated this when he received the leadership of the Chartered Institute of Taxation of Nigeria (CITN) at the State House, Abuja on Tuesday.
The president revealed that the National Tax Policy document had been reviewed with the aim of institutionalising a tax payment culture within the Nigerian workforce. Buhari said the progress made in diversifying the economy, providing social security and securing the country could be further improved with enhanced and expanded revenue base. “We have made some progress in the past four years. However, a lot more can still be done. A key step is to enhance and expand government’s revenue base. Today, we still rely on oil as our main source of income. This simply is not enough to meet our infrastructure, social services and security needs,” he said. While describing Nigerians as hardworking and entrepreneurial, the president said a deeper understanding of the effectiveness of tax on the economy by the populace and fair administration would help in improving government’s revenue shortfalls. In his remarks, the President of CITN, Chief Cyril Ede, congratulated the president for winning his second term in office, and assured him of the institute’s support for a successful tenure, especially in the area of using tax to improve government’s revenue. “Your victory is a clear sign of belief, trust and confidence that Nigerians have in you,” he said. Ede said some higher institutions in the country had started offering taxation as a course, hoping it will also be taught in secondary schools. According to him, nations can only achieve development with mobilization of resources through taxation. The president of CITN said: “Political leaders must set a good example for compliance on tax payment by ensuring that presentation of tax certificates remain one of the central requirements for those who want to contest elective positions.” President Buhari’s remark tends to reignite the debate on the need to review the nation’s tax policy as well as diversification of the economy, which is long overdue. This assertion is particularly relevant owing to the fact that the statement is coming on the heels of media report that the federal government is proposing to raise the Value Added Tax (VAT) from five percent to 50 percent to, among other things, enable it meet obligations to workers following the recent approval of increase in national minimum wage from N18,000 to N30,000. Although the issue of taxation in Nigeria is still a thorny one, remarkably the Federal Inland Revenue Service (FIRS) recorded an all-time high tax revenue collection of N5.23 trillion in 2018, given that it was achieved at a period when oil prices averaged $70 per barrel. VAT stood at N1.11 trillion for the first time. Prior to 2018, the highest revenue figure ever attained by FIRS was N5.07 trillion, in 2012, when oil price hovered around $100-$120 per barrel. Besides, the FIRS will be expanding its dragnet and tightening noose against tax evaders, having been given an N8 trillion target this year. The Chairman of FIRS, Dr. Babatunde Fowler, had during the 2019 Management and Stakeholders Retreat, in Lagos, recently reiterated the need for increased compliance to tax laws, adding that there would not be any serious discussion on diversification of the economy without reviewing the country’s tax regime for optimal performance. The Chairman, House of Representatives Committee on Finance, Babangida Ibrahim, while commending the FIRS on the feat achieved, pledged the lawmakers’ support for every initiative that would lead to efficient tax system in the country. “The taxation of any economy and growth of policies of government depends largely on the revenue generated by the tax authorities. We agree that to achieve effective taxation, the support of the parliament cannot be over-emphasised,” he said. At the retreat with the theme: “Parliamentary Support for Effective Taxation of the Digital Economy,” Fowler said FIRS has adopted initiatives that ensure a robust tax administration that is agile and beneficial to all stakeholders. According to him, with the deployment of various digital innovations, cost of collections in non-oil sector has improved from four per cent per N85.99 billion and N100.3 billion in 2016 and 2017 respectively, to N114.1 billion in 2018. It is our view, however, that the Nigeria tax system cannot operate effectively and efficiently except such burning issues as tax evasion and avoidance are reduced to the barest minimum while several others are also adequately addressed. While tax reforms in consonance with global best practices are inevitable, it is high time the federal government lived up to its billing to diversify the nation’s economy from its overdependence on the dwindling crude oil revenue. This will go a long way to address the contentious and contemporary issues at boosting the revenue earning capacity of government.

Source: Blueprint

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The Federal Inland Revenue Service (FIRS) yesterday explained that the Value Added Tax (VAT) is a consumption tax primarily designed to support poor people, and not to create hardship for them. It’s Executive Chairman, Babatunde Fowler allayed fears that the increase in VAT may cause hardship for the poor, stating that VAT is charged on consumption and capacity to consume.
He said: “When you don’t consume certain categories of goods and services, you are not liable to pay VAT charges on those items. The VAT is not charged on all medical and pharmaceutical products. It is not charged on basic food items. It is not charged on books and educational materials. It is not charged on baby products, fertilizers, locally produced agricultural and veterinary medicine. A VAT is not charged on farming machinery and farming transportation equipment. “VAT is not charged on all exports, plant machinery and goods imported for use in Export Processing Zones and free trade zone: Provided that 100 percent production of such company is for export.
“Other services exempted from VAT are medical services, services rendered by Community Banks, People’s Bank and Mortgage Institutions, plays and performances conducted by educational institutions as part of learning and all exported services are exempted from VAT. Fowler said some people misunderstood what VAT is. The VAT is a consumption tax. If you don’t have money to purchase certain categories of goods and services and you don’t consume them, then VAT is not your problem. “VAT is used to assist the needy.
VAT provides support for the needy, not a hardship on them; 85 percent of VAT collected is shared among states for them to provide free education, free health services, provide basic amenities among others. “We can see what the Federal Government is doing with the tax money. Look at the rail system, the Abuja-Kaduna rail is complete. Look at the Lagos-Ibadan expressway, look at the education system, the school feeding programme among others. If at the state level, your government cannot justify the taxes you pay to them, you have the right to vote them out in the next four years,” Fowler said, according to a statement from FIRS.

Source: Pulse

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The National Leader of the All Progressives Congress, Bola Tinubu, on Thursday urged the Federal Government not to increase the Value Added Tax. He said an increase in VAT will reduce the spending capacity of the people and might increase hardship. He urged the Federal Government to rather consider increasing the tax net. He spoke on Thursday during the 11th Bola Tinubu Colloquium marking his 67th birthday, at the International Conference Centre, Abuja.
It may be recalled that, sequel to the approval of N30,000 as minimum wage by the National Assembly, the Minister of Budget and National Planning, Senator Udo Udoma; and the Chairman of the Federal Inland Revenue Service, Mr. Babatunde Fowler, had said the Federal Government was considering an upward review of the Value Added Tax by 50 per cent. Udoma and Fowler who stated this on Tuesday when they appeared before the Senate Committee on Finance, said the increment was to, among others, enable the Federal Government to fund the new national minimum wage. Fowler said the proposed payable VAT by Nigerians based on the increment would actually be between 35 per cent (6.75%) and 50 per cent (7.25%). The government is currently charging five per cent VAT on all products in the country.

Source: Punch

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Having dug itself into a fiscal hole, the Federal Government is preparing to make Nigeria’s public finances even messier. To meet its obligations in the impending new wage bill negotiated with labour unions, Budget and National Planning Minister, Udoma Udo Udoma, said changes were being mulled in the Value Added Tax rate, among others, “to fund the (new) minimum wage once it is announced.” This is counter-productive, unimaginative and ultimately bound to hurt business and the fragile economic recovery process.
Nigeria needs today above all else, economic managers that understand the demands and dynamics of policies that will promote free enterprise, investment, job creation and efficient fiscal management best practices. Sadly, this has been signally lacking in President Muhammadu Buhari’s government and its predecessors. In times of adversity, visionary leadership thinks outside the box. The proposal to raise the five per cent VAT rate across the board is anything but visionary. Inflation could rise, job losses worsened and pressure on pay and pensions increased. As a result, millions more people may be pushed into extreme poverty. Udo Udoma and the Chairman of the Federal Inland Revenue Service, Babatunde Fowler, briefing the Senate Committee on Finance, both hinted at changes in the VAT rate “and other things.” Fowler was quoted as saying that the increase could come by this year end. Although he has since issued a rebuttal, claiming he was misquoted, he nevertheless canvassed a review of the VAT rate. Reviewing the VAT rate is in itself not a bad idea, especially as the five per cent rate has been maintained since its introduction about 25 years ago. The motive and the timing are however reprehensible. There is no justification whatsoever to raise the sales tax on all goods and services to be paid by all for the purpose of raising the salaries of less than two per cent of the population. Nigerians are poor, denied the benefits of their natural material endowments precisely because of a distorted governance template that impoverishes the many and directs resources to only a few. Already, civil servants, elected and appointed officials absorb a disproportionate slice of all federal, state and local government expenditure. In the 2018 national budget, for instance, over N2.9 trillion out of the total outlay of N9.1 trillion was earmarked for personnel costs. The N8.82 trillion budget proposals for 2019 being considered by the parliament set aside N3.4 trillion for these purposes. The timing is altogether wrong; when the economy slows or contracts, intelligent governments adopt measures to stimulate productive activities, boost consumer demand and create jobs. A favourite time-tested one is to offer corporate bodies and investors tax breaks to free resources for investment and new hires. A sweeping VAT rate increase will achieve the opposite as Nigeria’s productive sectors are currently beset by low consumer demand, factory closures, exchange rate instability, high energy and inputs costs, gridlock at the ports and capital flight. Of the 272 firms reported by the Manufacturers Association of Nigeria to have shut down in the 12 months to August 2016, 222 of them were small businesses that dropped over 180,000 jobs. The National Bureau of Statistics put the number of jobless at 20.9 million by December 2018 as unemployment spiked to 23.1 per cent. A thinking government would first, have linked salary increases to productivity, right-sizing and realistic revenue expectations. Singapore, reputed to have one of the world’s best public services, has in-built pay increases and in 2017, added $15-20 to the monthly pay of lower level civil servants in response to first quarter GDP growth of 2.7 per cent and expected 3 per cent growth by year end. Instead of a general VAT increase that will be passed on to consumers, further reduce spending power and provoke more job losses, the government should first implement liberalising policies at the ports and fine-tune existing ones. It should ramp up new tax incentives and devote considerable energy to promoting SMEs and start-ups. Considered the backbone of its economy and comprising over 90 per cent of its 65 per cent workforce, Malaysia has a procurement policy compelling patronage of its products and services. More importantly, the measure is cynical and doubly discriminatory. Fowler has repeatedly highlighted how wealthy individuals and corporate entities evade taxes. Kemi Adeosun, the immediate past minister of finance, lamented in 2017 that only 14 million of the 70 million taxable adults paid tax and that 800,000 firms had never paid tax; while Lagos State admitted that, of its eight million taxable adults, less than 600,000 paid income tax. That is not all; oil companies are said to owe Nigeria over $43 billion as confirmed by a Supreme Court judgement, while NEITI, the extractive industry watchdog, every year publishes details of revenue leakages running into billions of dollars, and corruption at the Nigeria Customs Service continues to deprive the three tiers of government their much needed revenue. It is cynical to cite the higher VAT rates in other jurisdictions to beguile the unwary. Singapore’s sales tax rate of 7-8 per cent must be juxtaposed with its efficient, affordable public transportation, health care and utilities. South Africa’s efficient 22,000 kilometres of rail and its expanding network of subsidised bus services have no peer in Nigeria. A more cautious approach is to introduce the increase sectorally. For instance in January, a VAT rate increase from 9 per cent to 13.5 per cent was introduced in the hospitality sectors only in Ireland. In the United Kingdom, there are three bands of VAT: zero, 5 per cent and 20 per cent. According to the BBC, many regular purchases such as food and children’s clothing are zero-rated. Domestic fuel and wind-turbine installation are 5 per cent. Other things like hot take-aways and televisions are 20 per cent. Fowler and the other agencies should, therefore, go after tax dodgers, seal the leakages and widen the tax net by greater efficiency and the use of technology tools. The government needs the political will to compel tax compliance among everyone, especially high net worth individuals and companies. A more rational strategy should be higher taxes on ostentatious goods, especially cars and private jets. Besides, there is reported under-payment and evasion of VAT: FIRS should reform itself, while tax dodgers should face heavy fines, penalties and jail terms as a deterrent.

Source: Punch

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Taiwo Oyedele, head of tax, PwC Nigeria, says Nigeria is one of the most difficult places to pay tax despite the government’s need for taxpayers’ money. Speaking at the recently held Tax Academy Clinic, the tax master advised the tax authorities to make technology the platform for paying taxes; not as an option. “Technology makes things faster, more efficient and more cost-effective. It’s no longer acceptable for authorities to live in the past. Even though Nigeria is starting late, they say better late than never,” he said.
“Nigeria doesn’t rank very well on the ease of paying taxes. Nigeria’s tax revenue to GDP ratio is one of the lowest in the world, yet it is one of the most difficult places to pay tax. It is a contradiction: you need tax money but you make the process very difficult. “So, the idea now is to make technology the platform, not an option, for tax compliance in terms of calculating your taxes, making your payments, and filing your returns. In the past, getting your tax clearance certificate used to be like rocket science. “When you need it to buy a plot of land or get a contract, getting the TCC is difficult. With technology now, one should be able to get that immediately. We know that these platforms are not perfect yet; so, our role as PwC, helping so many people to pay their taxes and also paying taxes ourselves, is that once we identify what the problems are, we get the stakeholders to come together to see how we can fix the problems.” He said the use of technology will ensure that the cost of tax compliance is reduced, making it easy to pay taxes. “So, if you simplify it by using technology, what that does is you encourage more people to pay. There is something about compliance cost; it is something that does not benefit the government and the taxpayer. “It is actually the money the taxpayer pays that doesn’t get to the government. So, both the taxpayer and the government have an objective to reduce that cost. “So you can get more people into the tax net and you can get data which is important within the economy for planning government policies that support taxpayers. At the end of the day, taxes are the way the government gets a fraction of the prosperity of people and businesses.” During the tenure of Kemi Adeosun, former minister of finance, the federal government had embarked on the Voluntary Assets and Income Declaration Scheme (VAIDS) to widen the tax base and encourage tax compliance.

Source: Thecable

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The number of registered companies in Nigeria is 3,098,193, the agency in charge of registration of firms in the country, Corporate Affairs Commission (CAC), said Tuesday. According to the commission, these companies were registered in Part A, B and C categories from the inception of the CAC in 1990 to March 21, 2019. CAC was established by the Company and Allied Matters Act promulgated in 1990 to regulate the formation and management of companies in Nigeria.
Speaking at the CAC customers forum in Abuja, acting registrar of the commission, Azinge Azuka, said in the last three years, the statistics on registration of firms and companies under Parts Limited Liability Company (A), Business Name (B) and Incorporated Trustee (C) was 618,309. She explained that in 2016, the commission got the sum of 175,098 from the LLC (A), 193,194 from Business name (B) in 2017 and 252,035 from Incorporated Trustee (C) in 2018. Azuka said the number of Annual Returns filed under the Parts A,B and C in the last three years was 190,078. “In that regard, work is at advanced stage to amend it enabling law, the Companies and Allied Matters Act (CAMA) in collaboration with the National Assembly,” she said. “This seeks to ease starting and growing businesses in Nigeria , ensure more appropriate regulation for MSMEs. “Enhance transparency and shareholders engagement align regulate framework with International best practices and make Nigeria an investment destination of choice.”

Source: Concisenews

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The National Assembly has passed a new law, the National Housing Fund (Establishment) Act 2018.
The key provisions of the Bill include the following:
Mandatory 2.5 percent contribution of monthly income by employees earning minimum wage and above in public and private sectors to be deducted and remitted monthly by all employers
2.5 percent of income by self-employed individuals
2.5 percent levy on cement, locally produced or imported
Banks, insurance companies and pension fund administrators shall invest a minimum of 10 percent of their profits before tax into the Fund at an interest rate not exceeding 1 percent above rate payable on current accounts by banks
Penalty for non-compliance of up to N100 million for corporates and N10m for individuals
Sanctions include cancellation of operating licenses of banks, insurance companies and PFAs for violations
Withdrawal by contributors who have attained the age of 60 years or 35 years of service to be at interest rate of 2% per annum
The Fund and any refund of contributions are exempted from payment of taxes
10 reasons why the proposed law is a bad idea:
The contribution is regressive as it taxes the poor more than the rich.
Making all employers liable to deduct and remit the contributions monthly (without a threshold) will worsen the ease of doing business and Nigeria's paying taxes ranking
Introducing earmark taxes and increasing the tax burden of contributors without addressing other fundamental issues like land registration and legal framework for real estate investment trusts is inconsistent with the 2017 National Tax Policy
Imposition of the 2.5% levy on cement is a tax on property development which will make housing even less affordable. It is counter-intuitive to impose a tax on cement in order to make housing development more affordable.
The penalty regime is draconian, excessive and disproportionate to the violations under the law
The exemption from tax clause is badly worded, it means refunds are exempt but contributions are taxable.
Negative impact on the capital market – because banks, insurance companies will have to set aside 10 percent of the profits for NHF investment, the returns available to shareholders will be less hence reducing the attractiveness and value of their shares
Cost of other funds – Since funds will be forcefully diverted from other uses, it means less liquidity and hence higher cost of borrowing
GDP impact – the opportunity cost of the funds going to NHF is that investment will be negatively impacted as well as consumption thereby impacting negatively on GDP growth especially in the likely event that the growth from NHF investment in housing is insufficient to offset the decline in other sector.
Pensioners will be worse off as the return of 2% per annum on their contributions to be withdrawn after attaining 60 years of age or 35 years of service means their investment will be completely eroded.

Source: Mondaq

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President Muhammadu Buhari has said that the Federal Government will continue to sensitize and encourage Nigerians to cultivate the culture of paying taxes by ensuring fair implementation of policies and effective utilisation of resources. Mr Femi Adesina, the Special Adviser to the President on Media and Publicity, said Buhari stated this when he received the leadership of the Chartered Institute of Taxation of Nigeria at the State House, Abuja on Tuesday.
The president revealed that the National Tax Policy document had been reviewed with the aim of institutionalizing a tax payment culture within the Nigerian workforce. Buhari said the progress made in diversifying the economy, providing social security and securing the country could be further improved with enhanced and expanded revenue base. “We have made some progress in the past four years. However, a lot more can still be done. A key step is to enhance and expand Government’s revenue base. “Today, we still rely on oil as our main source of income. This simply is not enough to meet our infrastructure, social services and security needs,’’ he said. While describing Nigerians as hardworking and entrepreneurial, the President said a deeper understanding of the effectiveness of tax on the economy by the populace and fair administration would help in improving government’s revenue shortfalls.

Source: Punch

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President Muhammadu Buhari has said that the Federal Government will continue to sensitize and encourage Nigerians to cultivate the culture of paying taxes by ensuring fair implementation of policies and effective utilisation of resources. Mr Femi Adesina, the Special Adviser to the President on Media and Publicity, said Buhari stated this when he received the leadership of the Chartered Institute of Taxation of Nigeria at the State House, Abuja on Tuesday.
The president revealed that the National Tax Policy document had been reviewed with the aim of institutionalizing a tax payment culture within the Nigerian workforce. Buhari said the progress made in diversifying the economy, providing social security and securing the country could be further improved with enhanced and expanded revenue base. “We have made some progress in the past four years. However, a lot more can still be done. A key step is to enhance and expand Government’s revenue base. “Today, we still rely on oil as our main source of income. This simply is not enough to meet our infrastructure, social services and security needs,’’ he said. While describing Nigerians as hardworking and entrepreneurial, the President said a deeper understanding of the effectiveness of tax on the economy by the populace and fair administration would help in improving government’s revenue shortfalls.

Source: Punch

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The Water Supply and Sanitation Collaborative Council on Tuesday called on the Federal Government to reduce tax paid on the importation of sanitary pads to promote menstrual health in the country. Dr Virginia Kamowa, the Technical Expert on Menstrual Hygiene Management, WSSCC made this call at the ongoing Training of Trainers Workshop on Menstrual Hygiene Management in Makurdi. According to her, poor access to sanitary materials, potable water and sanitation has been known to be a leading cause of loss of dignity for women and girls. She noted that countries such as Tanzania, Kenya, Canada, and South Africa had reduced such taxes, adding that in the UK, it was compulsory for menstruation education to be taught as a subject in all schools. She said that this had helped the countries to make policies which had promoted inclusion and better the lives of women and girls. “A number of countries have started to develop programmes and integrate menstrual hygiene management in their policies including removing taxes for sanitary materials that women use when they are menstruating. “Recently, the UN Council on Human Rights passed a resolution urging all countries to take decisive action to ensure that women and girls have universal access to information on menstrual products and facilities that are needed for improved menstrual hygiene. “So, it is important that Nigeria removes such barriers such as taxes, so that women and girls will live better and more productive lives.’’

Source: Punch

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PWC Nigeria has stressed the need for tax administrators to simplify tax payment process in Nigeria, to increase compliance level. The Head of Tax, PwC Nigeria, Taiwo Oyedele, while speaking at the firm’s Tax Academy in Lagos, on Wednesday, said Nigeria’s tax revenue to GDP ratio ranked among one of the lowest in the world. Oyedele expressed worry over the enormous challenges taxpayers face in the process of paying taxes in Nigeria, underscoring the need for simpler process through the use of technology. He argued that the adoption of technology would fast-track the processes, and ultimately check tax evasion and avoidance in Nigeria.“Nigeria does not rank very well on the ease of paying taxes. So, Nigeria’s tax revenue to GDP ratio is one of the lowest in the world, yet it is one of the most difficult places to pay tax.
“It is a contradiction when you need tax money, but you make the process very difficult. If you simplify it by using technology, what that does is you are encouraging more people to pay. “There is something about compliance cost; it is something that does not benefit government and the taxpayer. It is actually the money the taxpayer pays that does not get to the government. So, both the taxpayer and the government have an objective to reduce that cost. That is something that technology does for you.” He continued: “Everything we do today is impacted by technology, which is making things better and faster and more cost-efficient and cost-effective. So, it is no longer acceptable for authorities to live in the past. Even though Nigeria is starting late, they say better late than never.” “So the idea now is to make technology the platform, not an option, for tax compliance in terms of calculating your taxes, making your payments, and filing your returns. Even when you need your tax clearance certificate in the past, this used to be like rocket science. But with technology, one should be able to get that immediately. We know that these platforms are not perfect yet, so our role as PwC is to help many people to pay their taxes and also paying taxes ourselves,” he added.

Source: Guardian

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President of Trade Union Congress of Nigeria, Mr. Bobboi Kaigama, on Monday called for quick harmonisation of the N30,000 national minimum wage bill to enable President Muhammadu Buhari assent to it. Kaigama spoke to the News Agency of Nigeria in Lagos on the implementation of the new minimum wage. NAN reports that the leadership of the Nigeria Labour Congress had urged the President to sign and implement the new wage before the end of the 8th National Assembly. The TUC president said that the House of Representatives and the Senate needed to harmonise the agreed sum and pass it to the President for his assent.
”The N30,000 figure is one, but the aspect of law might not be the same. There is the need to come together and harmonise, produce a clean copy and forward to Buhari to sign. ”If that is not done as soon as possible, it will be difficult for the President to sign and implement the agreed national minimum wage. ”The day Buhari signs the new minimum wage bill, it becomes a law effective from that day,” he said. The labour chief said that implementation would be seamless since the Federal Government had said that it included its provision in the budget, but might take a while in some states that had not included it in their budget. He urged the private sector not to delay its implementation as soon as the bill is enacted into law. The TUC president advised the government to look into the issues of punishment for minimum wage defaulters and frequent review of the process. He also said that Value Added Tax should not be tied to the implementation of the new wage, particularly in the public sector. ”VAT is paid by consumers; it is paid by the lower class, while the business conglomerates and corporate organisations don’t pay appropriate tax. ”It is unfair to tell workers who pays appropriate tax that you will tie VAT to minimum wage. The organised labour disagrees with the government,” he said. Kaigama said that labour would resist any plan to fund the new minimum wage through increase in VAT.

Source: Punch

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Taxation globally is seen as a way of mobilising and supporting a nation’s financial resources. In this vein many nations have been taking the initiative to ensure that the tax administration is efficiently operated. The Nigerian tax system is beset by myriad of challenges, such as non-availability of tax statistics, inability to prioritize tax effort, poor tax administration, multiplicity of taxes to mention a few. In the quest to make tax payment stress-free and convenient, and to improve the doing-business environment in Nigeria, the tax management agency has introduced some reform initiatives to reduce the time for filing and paying taxes by 50% and to improve transparency and efficiency in tax administration.
Already, the new tax reform initiatives are beginning to bring significant benefits to the government. The new tax reforms by the Federal Government has impacted tax revenue profile of the government as a record N5.3 trillion tax revenue was generated in 2018 based on data released by the Federal Inland Revenue Services (FIRS) recently. The tax reforms majorly centred on ease of filing federal taxes, tax amnesty for voluntary asset declarers (VAIDS) and getting more people into the tax net. The data released by the FIRS Chairman, Mr. Babatunde Fowler, recently showed that the N5.320 trillion collection is the highest revenue ever generated by FIRS in history. The highest in FIRS was N5.07 trillion generated in 2012. FIRS’ generation of N5.3 trillion is significant as it was at a period when oil prices averaged $70 per barrel. The oil price was at an average of $100 to $120 per barrel between 2010 and 2013. The non-oil component of the N5.320 trillion is N2.467 trillion (53.62 per cent), while oil element of the collection is N2.852 trillion (46.38 per cent). Mr. Fowler said: “I believe that if we continue with the same pace, we can reach 20% of the tax mix comprising of revenue from SMEs by 2019. The government fully supports us. Some projects may take a year or more to develop, but citizens’ belief in the tax system is uplifted even when they see work in progress. “Just like some of the other oil-rich countries, we never imagined that taxation would be the main way to generate revenue. Now we appreciate the fact that oil is a resource with a price determined by more developed countries, and with that, we are disadvantaged. “There is a 2026 agenda for African countries to be able to fund their budgets internally without grants or aid. It is something we can do right now. Nigeria can show the rest of the world that it can transform within a short time and fund its own budget with taxation as a primary source of revenue.” This reform initiatives, driven by the Presidential Enabling Business Environment Council (PEBEC), the Federal Inland Revenue Service (FIRS), the Kano State Inland Revenue Service (KIRS) and the Lagos State Inland Revenue Service (LIRS), include: stating the timeline to complete corporate income tax (CIT) audit on the website; registering companies on the E-filing platform and creating a simplified single schedule for each tax type on the platform, an FIRS report recently indicated. Thus with these reforms, the report said taxpayers now file and pay federal taxes online from the comfort of their offices or home; taxpayers now make electronic payment and filing of state taxes including PAYE, etc. and employers now remit statutory deductions on behalf of personnel online. In addition, corporate income tax (CIT) audits is now done within a 63-day timeline and there is access to e-platforms for all classes of tax payers. The report also indicated that the process is simple and seamless as all that the tax payer needs to do is visit the FIRS website, file all federal taxes online and to pay for Value Added Tax and Company Income Tax. Other benefits of these online tax payment platforms include; improved transparency and efficiency in tax collection and administration and improved tax revenue to even make tax payers experience better, the report said, adding that continuous improvement on the e-platform for better taxpayer experience is based on feedback received. For Lagos and Kano states, which represent the two hubs of business in the nation, tax payers can also visit the Lagos Inland Revenue Service (LIRS) and Kano Inland Revenue Service (KIRS) websites to make electronic payment of taxes including monthly PAYE. To enhance service delivery, electronic self-service help desks are available at all FIRS offices for payment of taxes. Dr. Jumoke Oduwole, Senior Special Assistant to the President on Industry, Trade and Investment said: “We are pleased with the results the reforms are achieving, and we hope that as we work to deepen these reforms they will further strengthen the system to truly drive economic growth.”

Source: Dailytrust

Minister of Budget and National Planning, Senator Udoma Udo Udoma and Executive Chairman of Federal Inland Revenue Service (FIRS) Mr. Babatunde Fowler of government’s intention to raise the rate of value added tax (VAT) before the end of 2019 is presently causing ripples among various categories of Nigerians. But experts have warned that such a move will further hurt the Nigeria’s economy and make the people poorer. At a Senate hearing on 2019-2020 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) last Tuesday, served the notice on the lawmakers that in view of imminent wage increment stemming from increase in minimum wage from N18,000 to N30,000, the Federal Government intends to hike the current rate of value added tax (VAT).

Source: tribuneonline

The Corporate Affairs Commission (CAC) has said that all is set for its 2019 quarterly Customers’/Stakeholders Forum. Godfrey Ike, Head, Public Affairs of CAC, who disclosed this through a statement, said the event is slated for Tuesday, March 26, 2019 at the Merit House, Maitama, Abuja, by 11.am. “The CAC’s Customers/Stakeholderss Forum is interactive in nature and provides opportunity for the commission’s esteemed accredited customers, stakeholders and members of the public to directly engage top Management of the Commission on all its services.
“It also serves as a veritable window for top management of the commission to provide first hand information on the commission’s products and services. “The forum is organised quarterly in furtherance of efforts towards deepening communication with the commission’s customers and other stakeholders as well as provide opportunity for stakeholders and members of the public to have a one-on-one interaction with top management of the commission on its services. Ike disclosed that there will be presentation and demonstration on frequently encountered issues, while using the Companies Registration Portal which enables customers to register their businesses online at the forum. According to the statement, expected at the Abuja forum include among others, legal practitioners, chartered accountants, chartered secretaries, members of Nigerian Association of Chamber of Commerce, Industries, Mines and Agriculture (NACCIMA), Manufacturers Association of Nigeria (MAN), entrepreneurs and members of the general public.

Source: Independent

Tax experts at PwC Nigeria have said digitising the processes of tax payment in the country will increase compliance level, among other benefits. The Head of Tax, PwC Nigeria, Mr Taiwo Oyedele, said this on the sidelines at the PWC Tax academy held in Lagos recently. He lamented the stress and some of the issues associated with the paper tax filing and its proneness to several losses of documents or mix-ups, adding that the earlier “we sort full digital alternatives in tax filing processes, the better.”
Oyedele said: “I think it is no longer a question of tax; everything we do today is impacted by technology and technology is making things better and faster and more cost-efficient and cost-effective. “So, it is no longer acceptable for authorities to live in the past. Even though Nigeria is starting late, they say better late than never. “So the idea now is to make technology the platform, not an option, for tax compliance in terms of calculating your taxes, making your payments, and filing your returns, such that even when you need, say for example, your tax clearance certificate, in the past, this used to be like rocket science. “With technology now, one should be able to get that immediately. We know that these platforms are not perfect yet, so our role as PwC, helping so many people to pay their taxes and also paying taxes ourselves, it is to say once we identify what the problems are, we get the stakeholders to come together to see how we can fix it. It is not enough to criticise, we must find the solution together.” He further added: “With our experience dealing with other countries, we know things that work in other places. So, it is very good that we have the Federal Inland Revenue Service, the Lagos State Internal Revenue Service and PEBEC. It is the beginning of the process, and we hope that by this time next year, all these processes will be much better such that the experience of the taxpayer will be a lot better.” He further pointed out that technology would increase tax compliance and in turn increase contribution to the Gross Domestic Product. He added: “Nigeria doesn’t rank very well on the ease of paying taxes. So, Nigeria’s tax revenue to GDP ratio is one of the lowest in the world, yet it is one of the most difficult places to pay tax. “So, it is a contradiction: you need tax money but you make the process very difficult. So, if you simplify it by using technology, what that does is you encourage more people to pay. There is something about compliance cost; it is something that does not benefit government and the taxpayer. “It is actually the money the taxpayer pay that doesn’t get to the government. So, both the taxpayer and the government have an objective to reduce that cost. That is something that technology does for you. It reduces your cost of compliance, and therefore you can get more people into the tax net.”

Source: Thisdays

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Abuja, March 20, 2019 (TNE) The Tax Appeal Tribunal sitting in Abuja on Wednesday adopted the terms of settlement entered by 44 insurance companies and the Federal Inland Revenue Service (FIRS) over N579.5 million overpaid stamp duties charged the companies. The companies on Nov.19, 2018, filed a motion for an order for variation of a consent judgment delivered by the tribunal on May 10, 2016, having noticed the shortfall in the judgment amount. They averred that the overpaid stamp duties to FIRS occurred during the re-capitalisation of insurance companies between 2002 and 2006.
In her ruling, the tribunal chairman, Mrs Alice Iriogbe, held that the tribunal carefully studied the terms of settlement entered by the parties. “The tribunal has now adopted the terms of settlement as its judgment as full and final settlement of the claims in the suit.” She said that the appellants had applied for the sum of N579.5 million being the balance of the admitted excess stamp duties paid to FIRS in 2012. Iriogbe said that FIRS also admitted on the grounds that it was due to arithmetic errors and the amount had a shortfall of N579.5 million. She said in their terms of settlement the parties have agreed to the provisions. The tribunal noted that the Executive Chairman has approved the said amount and will be paid to the appellants counsel Bayo Osipitan and Co. in full and final settlement of the claim for excess stamp duties refund.

Source: Thenigerianexpression

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Plans are underway by the Federal Government to increase Value Added Tax, VAT, by up to 50 per cent (from current 5 per cent to 7.5 per cent), a move that would stoke-up inflationary pressure in the economy. The move is coming as a measure to raise funds for the implementation of the new minimum wage about to be passed into law by the National Assembly.
Also to be increased, according to the government officials, are Company Income Tax, CIT, and Petroleum Profit Tax, PPT. These were disclosed, yesterday, when Minister of Budget and National Planning, Udoma Udo Udoma, and Executive Chairman, Federal Inland Revenue Service, FIRS, Babatunde Fowler, appeared before the Senate Committee on Finance for an interactive session over 2019 to 2021 Medium Term Expenditure Framework and Fiscal Strategy Paper, MTEF/ FSP. They hinted that the tax increases were inevitable, arguing that the new national minimum wage will further increase the size of the 2019 budget already in deficit Fowler particularly told the Senator John Enoh (APC, Cross River Central) led Committee on Finance that the proposed payable VAT by Nigerians based on the increment would be between 35 per cent (6.75 per cent) and 50 per cent (7.25 per cent). The FIRS boss, who noted that the set goal of the revenue generating agency was to achieve N8 trillion revenue target this year, of which N3 trillion is expected from VAT, just as he puts total tax revenue for 2018 at N5.3 trillion; N4.03 trillion in 2017; and N3.31 trillion in 2016. He stated: “By the end of this year, we should be ready for an increase in the VAT. A lot of Nigerians travel to Ghana and other West African countries and they can see that their’s is much higher. They pay when they go for those trips. We should be ready for an increase in VAT. “I can certainly see an increase in VAT of at least 35 per cent to 50 per cent this year based on our enforcement activities. There, certainly will be an increase in Company Income Tax and also on Petroleum Profit Tax.” FG sets up c’ttee on funding new minimum wage On his part, Udoma who disclosed that the Federal Government had concluded plans to set up a committee to look into ways of increasing revenue to fund the new national minimum wage, however, stressed that in view of this, government was considering to forward requests to reflect slight adjustments to the 2019 budget especially as regards sourcing revenue to foot the bill for the new national minimum wage. The minister also disclosed that the committee was expected to enter into negotiation with those who are already above the minimum wage bracket and lower the burden on government. Udoma who noted that the Technical Advisory Committee on the minimum wage would submit its report to President Muhammadu Buhari this week, said: “It will be recalled that as a result of agitations from the unions that the President set up a tripartite committee to look at the Minimum Wage. “Every five years, it is supposed to be reviewed. It has not been reviewed even though there is no doubt that for both the Federal Government and states; it is a tough time to review wages. But the N18,000 is really too low and it is difficult for people to live on N18,000. “The President supported a revision but it is important that as we are revising (the minimum wage), we make sure that it can be funded that is why we set up the Bismark Rewane Technical Committee. “So we will be coming to you. There may be some changes maybe in VAT and other things. But we will be coming to you in order to make sure that we can fund the minimum wage.” The MTEF, the document on which the 2019 budget is predicated, was sent to the National Assembly on November 7, 2018, although with slight differences on the expenditure. While the MTEF has an expenditure framework of N8.7 trillion, the budget shows a figure of N8.826. The Minister of Budget and National Planning however attributed the difference to recent upward review of the salaries of the police and expressed concern that the New National Minimum Wage will further increase the size of a budget already in deficit. How FG’ll implement 2019 budget Meanwhile, Udoma told the Senate Committee that some slight adjustments were effected on the 2019 MTEF/FSP between when it was approved by the Federal Executive Council and the finalization of the 2019 budget proposals. The minister, who was briefing the Committee on the 2019 Revenue and Expenditure Projections said the adjustment only affected the expenditure levels as it was done to reflect some unanticipated expenditure items and the consequences of those adjustments. Before giving an overview of the 2019 Expenditure Framework, the Minister briefed the Committee on the 2018 expenditure outcomes. He stated that of the total appropriation of N9.12 trillion, N7.24 trillion had been spent as at December 31, 2018; representing 79% performance. He indicated that Debt Service and the implementation of Non-debt Recurrent Expenditure, including payment of workers’ salaries and pensions, were on track.

Source: Punch

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If resources from tax revenue are properly harnessed, Delta state could sustain itself, the State Coordinator Tax Justice and Good Governance, Mrs Bridget Anyafulu, has said. Anyafulu stated this on Thursday while presenting a report on “Taxation in the Informal Sector in Delta State,’’ at a meeting of the Platform in Asaba. According to the coordinator, the report was a research work in 2017 by the International Centre for Women Empowerment and Child Development (ICWECD), a Non-Governmental Organisation in the state sponsored by OXFAM.
She said that other countries in the world lived on tax revenue, while Nigeria lived on oil earnings, adding that the situation needed an urgent change. Anyafulu explained that Nigeria should not rely totally on oil as it could come to an end some day, urging the country to follow the changing global trends. “Tax revenue drives other economies in the world, while the Nigerian economy has continued to depend on revenues from oil. “In 2015, this current administration came in with lot of challenges arising from recession due to a fall in oil price in the international market. “Other countries in the world live on tax revenue but we live on oil revenue; this has to change because oil will go some day, and we must follow the world. “The Gov. Ifeanyi Okowa-led administration looks into accountability and the only reason the people can demand for accountability is when they have done their part by paying their taxes,’’ she said. Anyafulu called for transparency among the people and charged all stakeholders to create the needed awareness to sensitise those in the informal sector to pay their taxes and get value for their money. “The platform is for organisations, individuals and groups interested in engaging issues related to tax justice and promoting a fair, just, equitable and progressive tax regime in Nigeria. “We intend for all parties to work together, involve all relevant stakeholders through information sharing and pulling available resources to undertake some reforms in the tax system in Nigeria, particularly in the informal sector. “Our objective is to facilitate the development of an effective legal and policy regime that promotes a fair, progressive and transparent tax system and administration in Nigeria. “It is also necessary to undertake research and evidence-based campaign against all forms of harmful tax practices that undermine government ability to generate maximum tax revenue to fund development, among others. She said that the era of engaging tax contractors were over, adding that the state Board of Internal Revenue should train and equip its staff to take up their responsibilities for fairness, equity and accountability in tax collections. On his part, Mr Paul Itawansa, Director of Operations, State Board of Internal Revenue, said that the platform would enable the informal sector become properly captured into the tax system, to ensure equity and fairness. He noted that with adequate information and a workable system, everybody would be carried along without being embarrassed in the process of tax collation because in the new reform tax law, all adults must pay tax. Mr Martin Bolum, State Vice Chairman, Trade Union Congress (TUC), pledged the unions’ commitment to driving the tax system in the state, adding that the union was in the forefront of enforcing tax payment in the state in 2015. “This administration has given a lot of benefits to tax payers, particularly for those in the informal sector. “The governor has captured these groups in the health insurance scheme and with massive roads construction in all the nooks and crannies of the state, it is also of benefit to the tax payers,’’ he said. Mr Chuks Iku, Consultant, State Board of Internal Revenue, said the benefits in payment of taxes were enormous, adding that Delta Government had maintained peace and security which has enabled the people to do their businesses without fear. He said that work on documentation of the operators in the informal sector was on, adding that the data would be utilised for proper tax assessment in the state. “Okowa’s administration has built markets and provided other facilities from the revenue available to it and if it gets more, it will do more. “We are currently collecting data on the informal sector and the information collected is submitted to the state contributory health commission for the enrollees to access healthcare. “But the determination of what the informal sector owns remains a challenge, unlike the formal sector which is being taxed appropriately. A representative of the Market Women, Mrs Grace Mragbozo, called on government to check the issues of double taxation and the menace of “Development Levies’’ among other challenges being faced by traders and women. She pledged the resolve of the traders to key into a new tax regime in the state that would ensure transparency, fairness and equity.

Source: Thenigerianvoice

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PwC Nigeria has said the deployment of technology will help Nigeria to reduce tax compliance costs in order to encourage more people to pay taxes. The Head of Tax, PwC Nigeria, Mr Taiwo Oyedele, spoke on Tuesday in Lagos on the sidelines of the firm’s Tax Academy, with the theme ‘Technology and tax: Navigating tax authorities’ digital platforms for effective tax compliance’.
Oyedele, who stressed the need to simplify the process of paying taxes through technology, said, “Nigeria doesn’t rank very well on the ease of paying taxes. Nigeria’s tax revenue to GDP ratio is one of the lowest in the world, yet it is one of the most difficult places to pay tax. It is a contradiction: you need tax money but you make the process very difficult.
“So, if you simplify it by using technology, what that does is you encourage more people to pay. There is something about compliance cost; it is something that does not benefit the government and the taxpayer. It is actually the money the taxpayer pays that doesn’t get to the government. So, both the taxpayer and the government have an objective to reduce that cost.” He said the technology would reduce the cost of compliance, adding “therefore, you can get more people into the tax net.” Oyedele said, “Everything we do today is impacted by technology and technology is making things better, faster and more cost-efficient and cost-effective. So, it is no longer acceptable for authorities to live in the past. “Even though Nigeria is starting late, they say, ‘Better late than never. So, the idea now is to make technology the platform, not an option, for tax compliance in terms of calculating your taxes, making your payments, and filing your returns.” Noting that getting a tax clearance certificate was like rocket science in the past, he said, “With technology now, one should be able to get that immediately. We know that these platforms are not perfect yet; so, our role as PwC, helping so many people to pay their taxes and also paying taxes ourselves, is that once we identify what the problems are, we get the stakeholders to come together to see how we can fix the problems. It is not enough to criticise; we must find the solution together.” “With our experience dealing with other countries, we know things that work in other places; so it is very good that we have the Federal Inland Revenue Service, the Lagos State Internal Revenue Service and the Presidential Enabling Business Environment Council here today. It is the beginning of the process, and we hope that by this time next year, all these processes will be much better such that the experience of the taxpayer will be a lot better.”

Source: Punch

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The Federal Inland Revenue Service (FIRS) on Tuesday apologised to the Tax Appeal Tribunal sitting in Abuja for the delay in serving processes on an appellant, Mr Joseph Daudu (SAN), in the case of alleged N1.2 billion error in taxation. Daudu said he was dissatisfied with the FIRS assessments of his Withholding Tax (WHT), Personal Income Tax and Value Added Tax (VAT) for the period from 2010 to 2017. Specifically, he expressed dissatisfaction with the decision to assess him with respect to WHT and VAT in the sum of N 1. 2 billion.
He, therefore, prayed the tribunal to restrain FIRS.
At the resumed sitting, Mr Abedayo Adedeji, counsel for Dauda, told the Tribunal that FIRS served them a witness statement on oaths only this morning. He said that on the face of it, it necessitated a response from them, ( the appellant) according to him “we have not been properly served. ” In his response, Prof. Taiwo Osipitan SAN, counsel for FIRS apologised for the delay in serving the appellant as the respondent was trying to get all the processes served which did not work out as planned. He told the tribunal that they however have other processes to serve on the appellant but had served only one this morning and would serve the remaining before the next adjourned date. The tribunal, which was presided over by Mrs Alice Iriogbe, adjourned sitting until April 16, for parties to be served and reply before the next adjourned date. NAN reports that Daudu, claimed that it was a misnomer for the appellant, who operates a law firm as a legal practitioner and does not deal in primary goods, to be assessed on Withholding Tax (WHT). “It is unheard of for a legal practitioner to pay Withholding Tax, the respondent acted in error when it assessed the appellant on individual Income Tax from 2010 to 2017 in the sum of N977. 5 million,” he said. Responding, FIRS noted that its assessments were not in error and that it was discovered that the appellant did not deduct and remit WHT on some of the expenses and payment made under the period in review. FIRS, therefore, prayed the Tribunal to declare that the notices of assessments issued on the appellant for 2010- 2017 assessment was right. It also urged the tribunal for an order mandating the appellant to pay the total sum of N1.2 billion being the appellant’s liability for WHT, Personal income tax and VAT for 2010 to 2017 years of assessment. FIRS stated that it rightly assessed the appellant; acting in accordance with the law and by collaborating with the Economic and Financial Crimes (EFCC) on non-declaration of income as well as tax evasion. (NAN).

Source: Oraclenews
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If you need more time to file your federal tax return, it’s possible to apply for an extension of up to 6 months. By filing for an extension, you can avoid making tax mistakes and make sure you are adequately prepared to fill out your return with no rush. A tax extension is free, not dependent on your income, and sometimes automatic. The only thing you must do to qualify for the extension is estimate your tax liability on the form and pay any amounts that are due.
Some people automatically receive an extension if they meet certain criteria. If you work in a combat zone for the US Armed Forces, live and work abroad as a US citizen, or live in an area of the US hit by a severe natural disaster, there is no need to file for an extension. However this isn’t the case for most people. Many assume that tax extensions won’t be accepted and don’t even bother to file one. They have no idea they’re missing out on some benefits that might really help them. Here’s just a few:
Avoid Harsh Penalties
It’s important to remember that an extension does not change your tax payment deadline. You can avoid the late-filing penalty of 5% of your balance per month by applying for the extension. If your balance is unpaid by April 15th but you file for an extension, you will only pay 0.5% of your balance per month.
More Time to Receive Your Tax Refund
Doing this can also preserve your tax refund. There is a three-year deadline for receiving a refund check if you are owed one by the IRS. This three-year statute of limitations is also extended by 6 months when you file for an extension, meaning there is more time for taxpayers to receive their refunds if they are behind on submitting their tax returns.
Save Money on Tax Preparation Fees
Another thing to consider is that accountants tend to raise their prices when it is close to the April deadline. For the frugal taxpayers, it makes sense to file for an extension if you are looking to save on your tax preparation fees. It also allots you more time to convert to a Roth IRA or traditional IRA and reap the tax benefits.
Make Sure You’re Prepared
If you are missing any of the necessary forms needed to file your taxes, don’t make estimations about your income and risk having to make corrections later. Learn how to file for a tax extension online and spare yourself the stress of filing before you are ready to.
All you need to is:
• Your name
• Address
• Social security number
• Estimate of total tax liability
• Total already paid for the tax year (includes both withholding and estimated payments)
• The amount you are paying along with the extension.
• If you are filing jointly with a spouse, you will also need to include their full name and social security number.
How to File Online
If you are paying your taxes online, you can receive an extension through the IRS payment portal and skip filing a separate form. If you choose to do the process in two steps, you will need to fill out IRS form 4868. Depending on your income, you’ll either have to use Free File Software, or Free File Fillable forms.
It’s important to note that filing for an extension is not a way to delay paying, and failing to file on time can lead to larger penalties than you would incur by failing to pay. A tax extension is the prime way to avoid any unnecessary fees. Most of the time, the IRS will not even require that you explain your reasoning for requesting one, and it will not prompt an audit. Filing for an extension is a good option for those who are dealing with an unexpected life event, extra time to ensure your paperwork is complete and accurate.

Source: Proshareng

Nine months after the Federal Government approved the removal of Value Added Tax (VAT) from air transport, the decision is yet to be implemented. Capt. Nogie Meggison, the President of Airline Operators of Nigeria (AON), had lamented that its members paid at least N10 billion annually as 5 percent VAT to the coffers of the Federal Government through the Federal Inland Revenue Service (FIRS).
According to AON, the remittance of VAT was negatively affecting its operations and it called on the government to emulate other countries in removing VAT from revenues collected from its members. Investigation by Daily Independent revealed that after the government’s announcement of the approval of VAT in June, last year, AON wrote series of letters to the government reminding it of the pronouncement and the need to commence implementation immediately. But nine months after, the government was yet to reply to any of the letters written to it by the leadership of AON. Air transport is the only form of transportation that remits VAT to the government, while rail, road, and marine don’t. Alhaji Muneer Bankole, the Chief Executive Officer (CEO), Med-View Airline Plc, in an interview with Daily Independent, confirmed that the government was yet to implement the VAT removal policy. He explained that the umbrella body of the airline had made attempts to ensure its implementation without success, stressing that the government still needed to inform the Ministry of Finance through memos which, he said, had not yet been done. He called on the government to hasten the implementation to further reduce the financial burden on the operating airlines in the country, saying that while the Nigerian government was collecting five percent VAT from the indigenous airlines, their foreign counterparts that operate in the country don’t remit such, either in the country or at their bases. He said: “As at today, the answer is negative. Nothing is being done in that direction. All we are praying for is still to have the relevant authorities to do the right thing. “The government will still need to talk to the Ministry of Finance, budget and everybody, including the National Assembly, to have it down and become a law.” Besides, a source close to one of the operating airlines told Daily Independent that FIRS still insists on the collection of VAT from the airlines despite the pronouncement of the government. According to the source, FIRS officials said the collection would continue until the airlines fast-tracked the gazetting of the pronouncement. The source, who is a management staff of the airline, also said that the carrier had written series of letters to the government on the issue to no avail. He said: “It’s true that the government publicly made the announcement on June 1, 2018, but nine months after, nothing is heard from the quarters of government. We still remit VAT to FIRS and, most times, it is internationally inflated. “This pronouncement is not different from the one made on removal of waivers on customs duties. “At times, officials of customs still frustrate the waivers, too, through their antics. It is a different thing when a government makes a pronouncement and another thing when that pronouncement is followed with action. We need to walk the talk in this country.” Prior to the Executive Order, AON had threatened that its members would no longer pay VAT with effect from June 14, 2018. The group had said then that the decision was taken after deliberations by the chief executive officers of airlines in the country. The body had argued that Nigerian domestic airline travel was the only mode of transportation paying VAT in the country, while road, rail, marine and international airlines don’t pay, alleging further that some of the domestic airlines were exempted from paying VAT and called for a level playing field for everyone. The body had added: “The AON’s position is that the VAT on airline ticket sales for domestic carriers must be removed completely forthwith as road transportation, rail, marine and international air travel carriers are not subjected to VAT. “Moreover, a situation whereby some airlines are paying VAT, while some other privileged airlines are not paying VAT, and the VAT, which we pay is being used to subsidise our competitors against those that are making payment is unfair.” Few weeks later, President Muhammadu Buhari, through an executive order, had announced removal of VAT from the levies paid by the airlines, which received commendations from all stakeholders and professionals in the sector.

Source: Independent

FEDERAL Inland Revenue Service (FIRS) on Monday arraigned Fortless Global Concept Limited and Everyday Wine Shop and their representatives at the Federal High Court, Abuja on alleged tax evasion, obstruction of official duty and attack on staff of the FIRS on duty among other charges.

In the Charge No: FHC/ABJ/CR/48/2019, between the Federal Government of Nigeria (Complainant) and Fortless Global Concept Limited (also known as Fortless Supermarket and Stores and Chukwu Ejike (Defendants), the FIRS preferred a six-count charge bordering on tax evasion and assault on FIRS staff on duty on the defendants pursuant to Section 174 (1) of the Constitution of the Federal Republic of Nigeria 1999 (As Amended) and Section 47 of the FIRS Establishment Act No: 13, 2007.

Similarly, in the Charge No: FHC/ABJ/CR/47/2019, between the Federal Government of Nigeria (Complainant) and Everyday Wine Shop (also known as Everyday Wine Shop &Bar), Mbah Sunday and Epkeha Peter (Defendants), FIRS preferred a six-count charge also bordering on tax evasion and assault on FIRS staff on duty on the defendants pursuant to Section 174 (1) of the Constitution of the Federal Republic of Nigeria 1999 (As Amended) and Section 47 of the FIRS Establishment Act No: 13, 2007. Representatives of the two companies who are currently on administrative bail: Mbah Sunday and Epkeha Peter for Everyday Wine Shop and Chukwu Ejike for Fortless Global Concept pleaded not guilty to the charges. Justice Taiwo O. Taiwo of the Federal High Court 10, Abuja granted the application of the leader of FIRS prosecution counsel, James Binang and scheduled March 21, 2019, for the FIRS to prove the charges against the defendants. The Court also granted that the counsels should bring the defendants to Court on 21 March 21, 2019, for further hearing.

Some of the Charges against Everyday Wine Shop are:
“That you, Everyday Wine Shop (aka Everyday Wine Shop and Bar) 2. Mbah Sunday and 3. Epkeha Peter on or about the 24th day of January 2019 at the Federal Housing Estate, Lugbe, Abuja, within the Jurisdiction of this Honourable Court, being obliged to deduct and remit Value Added Tax (VAT) in the course of your business, conspired amongst yourselves to participate in Tax Evasion; and you thereby committed an offence punishable under Section 49(1) and (2) of the Federal Inland Revenue Service (Establishment) Act, No: 13, 2007. “That you, Everyday Wine Shop (aka Everyday Wine Shop and Bar) 2. Mbah Sunday and 3. Epkeha Peter on or about the 24th day of January 2019 at the Federal Housing Estate, Lugbe, Abuja, within the Jurisdiction of this Honourable Court, being taxable persons conspired amongst yourselves to obstruct and assault authorised officers of the Federal Inland Revenue Service (FIRS) in the course of the performance of their official functions; of pasting Value Added Tax (VAT) Non-Compliance Notice on business premises of persons and individuals adjudged by the Service to be Non Tax Compliant; and you thereby committed an offence contrary to Section 49(1) and (2) of the Federal Inland Revenue Service (Establishment) Act, No: 13, 2007. “That you, Everyday Wine Shop (aka Everyday Wine Shop and Bar) 2. Mbah Sunday and 3. Epkeha Peter on or about the 24th day of January 2019 at the Federal Housing Estate, Lugbe, Abuja, within the Jurisdiction of this Honourable Court, being taxable persons conspired amongst yourselves obstructed and assaulted Miss Funke A. Shodunke, an authorised officers of the Federal Inland Revenue Service (FIRS) in the course of the performance of their official functions; of pasting Value Added Tax (VAT) Non-Compliance Notice on business premises of persons and individuals adjudged by the Service to be Non Tax Compliant; and you thereby committed an offence contrary to Section 49(1) and (2) of the Federal Inland Revenue Service (Establishment) Act, No: 13, 2007,” the Charges read.

Source: Tribuneonlineng

The Corporate Affairs Commission (CAC) has announced that the on-going Business Incentive Strategy (BIS) will end by March, 31st 2019.
The Acting Registrar General, Lady Azuka Azinge at the Commerce and Industry Correspondent Association of Nigeria (CICAN) annual retreat and capacity building workshop on Friday in Abuja, urged members of the public to ensure they register their businesses. According to her, “the BIS involves eduction in fees from N10,000 to N5,000 initially for a 3 months period 1st October to 31st December, 2018. “ She said based on popular demand, period was extended by another 3 months from January 1st to March 31st 2019, adding that the BIS registration is ongoing at CAC offices nationwide. She said essence of the reforms is to make business registration and regulation as simple as possible. “While the BIS is to ensure formalization of businesses by MSMEs for the overall benefit of the economy. “The BIS is Commission’s contribution to the development and growth of the MSMEs in Nigeria. “Importance of MSMEs and its contribution to GDP, Realization that a large number of the MSMEs were “0” registered. “Benefits of registration/formalization of their business, Open Bank Accounts, Access to Credit, Corporate Governance,” she said. On the retreat, Lady Azinge said the media occupies a very strategic placea in society, noting that without the media, the requisite public awareness of government initiatives and programmes cannot achieve the desired impact. She commended the long standing cordial relationship between ClCAN and the Commission.

Source: Blueprint