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Tag: Tax

  • Ecobank in tax avoidance trouble, ordered to pay N1.6b to FIRS

    Ecobank in tax avoidance trouble, ordered to pay N1.6b to FIRS

    The Tax Appeal Tribunal has declared as illegal, null and void the decision of EcoBank Nigeria Limited to pay N5, 545, 000,000 as dividends to its shareholders in 2016.

    That year, Ecobank had claimed it made no taxable profit and rather declared losses from its banking operations.

    A statement from the Federal Inland Revenue Service (FIRS) said the tribunal reached this decision in its judgment dated February 20, 2020, which it delivered in Appeal No. TAT/LZ/CIT/024/2018.

    Consequently, EcoBank must now pay at least N1, 663, 500, 000 to the FIRS as Company Income Tax for the year in dispute – 2016.

    EcoBank had dragged the FIRS to court over the insistence of the service that the bank must pay in full its excess dividend tax liability of N2, 079, 375, 000, inclusive of interest and penalty for the Year of Assessment (YOA) 2016.

    But Ecobank argued that the dividend it paid out was tax exempt as N4,372,244,556 out of the total sum was “profit from bonds and treasury bills”, which was not taxable based on the provisions of the Company Income Tax (Exemption of Bonds and Short-Term Government Securities) Order, 2011.

    Read Also: Ecobank forum for Lagos
    Admitting to only making N1,172755,444 “trading profits” from other business sources, EcoBank decided that it would only pay N351,826,663 tax to the FIRS, which it paid the Service after some months of delay.

    However, the FIRS “demanded for the immediate payment of the outstanding excess dividend tax liability of N1, 311, 673, 367” from the bank. The impasse led to the suit before the tax tribunal.

    In its argument before the court, EcoBank presented three issues for determination, namely whether the FIRS “was correct to assess the Appellant to tax under Section 19 of CITA” when the income earned was “from Bonds, Treasury Bills and other Government Securities”; whether the FIRS “misdirected itself by failing to take account the CIT paid by the Appellant”; and “whether by the rules of Interpretation of Statutes, the Respondent has erred in law in its application of Section 19 of CITA”.

    In its consideration of the three issues raised, the tax tribunal resolved them in favour of the FIRS. It held that “companies that invest in bonds will, by virtue of the tax exemption, become liable to pay excess dividend tax on their profits.”

    The court averred that “if the tax exemption granted by the order (Company Income Tax (Exemption of Bonds and Short-Term Government Securities) Order, 2011) creates an excess dividend situation” EcoBank or any other company “should be liable to pay excess dividend tax on the same income that otherwise would have been exempted from tax.”

    The tribunal stressed that “a liability to pay excess dividend tax arises where a company that seeks to pay dividend has no taxable profit as in the instant case but has distributable profit that is higher than the taxable profit.”

    The tribunal also held that the FIRS properly directed itself by not failing “to take into account the sum already settled by the Appellant” (EcoBank) in the Service’s “total assessment of N1,663,500,000.”

  • Only 110 People Pay Above N10m in Taxes in Lagos – Sanwo-Olu

    Governor of Lagos State, Mr Babajide Sanwo-Olu, has disclosed that out of the 4.5 million taxable adults living in the metropolis, only 110 pay taxes worth over N10 million.

    Mr Sanwo-Olu made this disclosure during the question and answer segment of The Platform Nigeria, an event organised by The Covenant Christian Church Place, Iganmu, Lagos, a religious organisation headed by Pastor Poju Oyemade. The annual programme was themed Redesigning the Nigerian Economy With New Ideas for this year’s edition.

    “You will be amazed to know that the number of people who pay more than N10 million tax in Lagos is about 110 people,” The Governor declared while fielding questions from convener of the televised event.

    However, the Governor asserted that his administration was not eager to increase tax rate in the state to meet its financial needs, but would concentrate on expanding the tax net of people who pay taxes in the state.

    “We are not saying that we should increase tax, but we encourage people to be on the tax net,” he said.

    Mr Sanwo-Olu further revealed that only about 700,000 people of the 4.5 million eligible taxpayers in the state pay taxes, which is just a little more than 15 percent.

    “We are also appealing to our tax agency to be more proactive and reach out to people who are not paying tax,” the Governor, who was greeted with applause, said.

    The Lagos state Governor also called for what he tagged Creative Financing, which he said would take a large chunk of pressure off the need for taxation.

    “We can do what we call asset securitization, which will look at all the assets we have and know which of them can we leverage something out of and put into capital expenditure,” Mr Sanwo-Olu stated.

  • Only 700,000 out of 22 million Lagosians pay taxes regularly – LASG

    Only 700,000 out of 22 million Lagosians pay taxes regularly – LASG

    The Lagos State Government has disclosed that only 700,000 out of the 4.8 million Lagosians registered as taxpayers are active taxpayers out of a population of about 22 million people.

    The state Commissioner for Economic Planning and Budget, Mr. Samuel Egube disclosed this in his address at the Lagos Central Senatorial district Y2020 Budget Consultative Forum which held at Surulere on Friday.

    He said the government would expand the tax net by engaging and encouraging the citizens to ensure that they participate in their tax obligations.

    “The more taxes we are able to collect, the more we are able to do, the more we are able to support small businesses, create and facilitate businesses, put the infrastructure in place that will be able to attract more investments and create jobs and do many other things.

    “It is important that as we want to get Lagos greater, we want citizens to participate in governance and also pay their contributions.

    Egube said the year 2020 budget is going to be based on the six developmental pillars of the government as captured in the ‘T.H.E.M.E.S’ agenda of the administration.

    While assuring that the administration will complete all inherited on-going projects, he said the administration’s dream of a greater Lagos will be realized through engagement and participation of the citizens.

    He said the focus of the budget will be woven around the present administration’s advocacy for an inclusive government that will run under the policy thrust based on the ‘THEMES’ agenda.

    “Which are: Traffic management and transportation, Health and Environment, Education and Technology, Making Lagos a 21st-century economy, Entertainment and Tourism, Security and governance.

    “The Y2020 budget is being designed to be people-oriented in order to ensure a Lagos that works for all irrespective of age, gender, tribe or status.”

    He said the government must grow the GDP at a rate faster than the ever-increasing population of the state and that while the state will deploy debt profile focus on capital expenses it would also ensure that at least 55 per cent of the budget will be on investment in capital expenditure.

    He decried the lack of support by the government in the entertainment and tourism sector, saying every achievement recorded there has been on private initiative.

    “The government is going to actively support that sector, it is our view that the government must act to support the sector this time around”, Egube said.

    The budget consultative forum which will hold in the states’ three senatorial districts, he said, is aimed at giving credence as well as greater transparency and accountability to the state’s budget preparation process.

    “We are going to gather the aspirations of the people in Lagos and ensure it comes into the budget, but I can assure you that we are going to focus the budget very squarely on the thematic areas of ‘THEMES’ which tend to capture what we look forward to hear and to see in Lagos”, the commissioner said.

  • Elumelu tasks government on favourable tax policies

    Elumelu tasks government on favourable tax policies

    …says The Average Business Owner in Nigeria is a local government authority

    Chairman, Heirs Holdings and Founder, Tony Elumelu Foundation, Tony O. Elumelu has called for far reaching Tax reforms and for the National Assembly to urgently pass the Executive Tax bill into law.

    Elumelu made this statement as he delivered the keynote address at the 21st Annual Tax Conference of the Chartered Institute of Taxation of Nigeria (CITN), titled, “National Development: Unlocking the Potentials of Taxation”.

    Speaking on the challenges that stifle small businesses, Elumelu quoted a young entrepreneur beneficiary of the Tony Elumelu Foundation, “The average business owner in Nigeria is a local government authority on his own because he caters for his own electricity with generators, he builds his own borehole, handles his own waste disposal, and the government can make his life easier by creating favourable tax policies that support SMEs.”

    Elumelu also lamented the plight of SMEs at the mercy of the tax system revealing, “The average number of taxes businesses pay in Nigeria is 48, compared to 33 in other Sub-Saharan countries. In Hong Kong, it’s just 3. Multiple taxation remains a significant burden for SMEs and corporates operating in the country.” Elumelu continued: “With a population of close to 200 million people in Nigeria, we have only 75,000 registered SMEs in the country. No one needs to tell us that people are avoiding tax or refusing to be a part of the system,” he said.

    With high cost of compliance, complex and costly business registration processes, many SMEs are choosing to remain informal, which in turn results in a low tax base and low tax contribution to GDP. “Nigeria’s tax to GDP ratio is only circa 6%, compared to far smaller populations like Rwanda at 16%. Imagine the economic transformation we can achieve as a country if we can move our Tax to GDP ratio by 10%. We will raise an additional $40billion in government revenue – identical to the sum of our foreign reserves,” Elumelu explained.

    But it won’t be easy. Elumelu advised government to educate, inform and raise tax awareness, “Government should drive mass mobilisation of citizens – let citizens know why they need to pay taxes and give them the assurance that their tax will be properly utilised.” In addition he stated that, “government should employ the use of smart tax incentives to attract and incentivise local and foreign investors.”

    Elumelu also tasked the country’s ambassadors and embassies with a two year timeline to increase the number of double tax treaties between host countries and Nigeria. “Nigeria has 14 taxation treaties while a country like South Africa has 79 double taxation treaties, and we are the largest economy in Africa. Our embassies should adopt a target in the next two years to sign Tax treaties with our top 100 trading partners in the world.”

    Speaking as the leading proponent of entrepreneurship in Africa and an advocate for entrepreneurs, Elumelu charged government to put in place tax systems to encourage SMEs-— the engine for job creation in the economy.

    “Until there is a reduction in what SMEs pay as tax, elimination of multiple taxation, abolition of minimum income tax and excess dividend tax, it will be difficult for us to expand the tax base. It will be difficult for us to attract investors into this country, and it will be difficult for us to retain the ones already in the country. It will be difficult for us to mobilise our SMEs to help create employment that we need so much in this country. It will be difficult for us to have the citizens hold leaders accountable.”

    In conclusion, he reminded the National Assembly members of their mandate in office, “We must encourage government to pass the Executive Bill immediately. Let’s get the National Assembly to fulfil their obligation to society and pass the bill immediately, so we can start making progress”.

    Speaking in response to the presentation, Former President of the Chartered Institute of Taxation in Nigeria, Chief Mark Anthony Dike emphasized the urgency for the Executive Tax bill to be passed into law.

    He said: “Every year during the military regime, there was a Finance Miscellaneous Provision Decree aimed at looking at what has happened and review the areas that need to be amended. As they say, the taste of the pudding is in the eating. We may conceptualise, but in order to know the efficacy of a theory, we have to test it. Until the provision of the Executive order is tested, we cannot know how efficacious it will be.”

    Also present at the event were Dr. Ikemefuna Nwobodo, President, Chartered Institute of Taxation in Nigeria, Permanent Secretary, Ministry of Finance, Dr. Mahmud Isa-Dutse, Babatunde Fowler, Executive Chairman, Federal Internal Revenue Service, Ayo Subair, Chairman, Lagos Internal Revenue Services, Members of the council of CITN and the Auditor General of the Federation, Mr. Anthony Ayine.

  • Trump tax showdown: U.S. Democrats set April 23 deadline for IRS

    U.S. congressional Democrats on Saturday headed for a showdown with the Internal Revenue Service over President Donald Trump’s tax returns, setting a new hard deadline of April 23 for the federal tax agency to hand the documents over to lawmakers.

    In an April 13 letter that appeared to move Democrats closer to a federal court battle against the Trump administration, House Ways and Means Committee Chairman Richard Neal warned the IRS that failure to comply with his request for six years of Trump’s individual and business returns by April 23 would be interpreted as a denial.

    The Trump administration has already missed an initial April 10 deadline for providing the tax records, which Neal first set when he made his request on April 3. Democrats based their request on the panel’s jurisdiction over IRS enforcement of the tax laws regarding U.S. presidents.

    But Treasury Secretary Steven Mnuchin said on Saturday that Neal was “just picking arbitrary dates” in setting deadlines and said it was more important to get the decision “right” to ensure the IRS would not be “weaponized” in a political dispute.

    “I do intend to follow the law. But I think these raise very, very complicated legal issues. I don’t think these are simple issues. There are constitutional issues,” he told reporters on the sidelines of the International Monetary Fund and World Bank spring meetings in Washington.

    He could not say whether the Treasury, which oversees the IRS, would complete its review of Neal’s request by April 23.

    Mnuchin, who has consulted with the White House and Department of Justice about Trump’s tax returns, said earlier this week that Neal’s request raised concerns about the scope of the committee’s authority, privacy protections for U.S. taxpayers and the legislative purpose of lawmakers in seeking the documents. He said he has not spoken personally to Attorney General William Barr about the request.

    “Those concerns lack merit. Moreover, judicial precedent commands that none of the concerns raised can legitimately be used to deny the committee’s request,” Neal told IRS Commissioner Charles Rettig in his letter.

    “It is not the proper function of the IRS, Treasury or Justice to question or second guess the motivations of the committee or its reasonable determinations regarding its need for the requested tax returns and return information.

    “Please know that, if you fail to comply, your failure will be interpreted as a denial of my request,” Neal wrote.

    As Ways and Means chairman, Neal is the only lawmaker in the House of Representatives authorised to request individual tax information under a federal law that says that the Treasury secretary “shall furnish” the data.

    Despite the law’s clarity, Democrats have long acknowledged that the request, if denied, would mean a federal court battle that could ultimately be settled by the U.S. Supreme Court.

    Legal experts say lawmakers could vote to hold administration officials in contempt of Congress, which would provide a basis for the House to ask a federal judge to order the Treasury Department to comply.

    Congressional Republicans have condemned Neal’s request as a political fishing expedition by Democrats, while the White House has said the documents will “never” be turned over.

    But Congress would likely win a court fight, though it could take months or even years to unfold, experts say. Neal’s request for the returns of a sitting president is unprecedented, and legal experts say its success or failure may depend on a court ruling about the committee’s legislative purpose for seeking the documents.

    Neal said in his letter that the request is needed to further “legislative proposals and oversight related to our Federal tax laws, including but not limited to, the extent to which the IRS audits and enforces the Federal tax laws against a President.”

    Democrats want Trump’s tax returns as part of their investigations of possible conflicts of interest posed by his continued ownership of extensive business interests, even as he serves the public as president.

    Trump broke with a decades-old precedent by refusing to release his returns as a presidential candidate in 2016 and continues to do so as president, saying his tax returns are under IRS.

  • Tax paying culture will change Nigeria’s economy – Buhari

    Tax paying culture will change Nigeria’s economy – Buhari

    President Muhammadu Buhari says the Federal Government will continue to sensitize and encourage Nigerians to cultivate the culture of paying taxes by ensuring fair implementation policy 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 (CITN) 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.

    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 mobilisation 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.’’

  • ATAF sets agenda on how Africa can benefit maximally from taxing digital economy

    ATAF sets agenda on how Africa can benefit maximally from taxing digital economy

    …as experts gather to brainstorm, propose solutions to digital tax evasion, illicit financial flows, other tax challenges in Africa

    Reputed as the world’s second largest and second most-populous continent, being behind Asia in both categories with over 1.216 billion population (2016 estimate) and covering six per cent of earth’s total surface area and 20 percent of its land area, Africa’s space and place in the development of a safe, affordable and adorable world cannot be overemphasized.

    With countless human, mechanical and natural resources, indeed Africa can pass for one of, if not the most blessed continent.

    However, despite her genuine contributions to a brighter world, Africa has for long dwelt in the dungeons of ‘a developing continent’ tag. Hence, the need for an urgent approach to alleviate her present pitiable condition.

    The atmosphere was crisp, serene and intellectual. This uncommon gathering in far away East Africa could not have been for any other purpose other than brainstorming and proposing workable solutions to some of the challenges responsible for the continent’s severe loss of revenue that could have hitherto been used for her development.

    To cut the suspense loose, it was the second edition of the Media Engagement and Training organised by the African Tax Administration Forum (ATAF) in Kigali, Rwanda from 6-8 March, 2019. TheNewsGuru (TNG) reports that the first edition held in South Africa in 2018.

    This year’s edition being commemorative of ATAF’s 10 years anniversary was themed “Journeying with ATAF on the Next 10 Years: The Journey Towards Increased Domestic Resource Revolution in Africa,” and had over 70 participants and resource personnel drawn across 38 African nations including Olaotan Falade of TNG.

    Under the professional, charming and unparalleled oratory prowess of Ms Fiona Marwa, participants freely journeyed through a rich, yet adventurous three-day taxing moment in the beautiful city of Kigali, Rwanda.

    As expected financial and tax experts, revenue authorities from different African countries including tax/business editors and reporters all did justice to dissecting the problems at hand and recommending immediate workable solutions for the actualisation of a more prosperous and independent African continent.

    Preamble

    The digitalization of the world’s economy is considered to be a major stimulant to growth, development and innovation. Online and cross-border transactions requiring little or no physical presence have transformed world trade, as we knew it.

    However, this increased digitalization of the economy has created a big challenge for taxation as most local laws are not robust enough to address the complexities created by the digital economy.

    Getting started

    In his opening remarks, the Commissioner General, Rwanda Revenue Authority (RRA), Mr. Pascal Bizimana Ruganintwali said while the continent is gradually making progress in its tax compliance and accountability role, however a lot still has to be done to measure to international standards particularly as regards efficiently taxing digital businesses which have successfully penetrated the nooks and crannies of the African continent.

    According to him, the tax policy in Africa is still behind compared to what is obtained in developed economies. In his words: “I believe ATAF has done wonderfully well by initiating this annual training and engagement of both media and tax revenue authorities. I have no doubt in my mind that this engagement will inform you about the progress we are making (as well as) challenges and intervention required to close the gap in implementing tax policy.”

    Charging media practitioners particularly the tax reporters on their statutory role, the top Rwandan tax official said “The media has a critical role to play in helping us tackle some of these challenges bedevilling effective taxation in Africa. The media is bequeath with power to change public perception and to increase voluntary compliance, reduce tax envision and help us handle challenges attached to the digital economy.”

    In a similar vein, the Director of Tax Programmes at ATAF, Ms Mary Baine in her opening remarks charged the continent to embrace the positives and work out the challenges associated with digitilisation. She noted that Africa has more to gain than lose in the 21st century.

    “The era of globalization is upon us, and we can no longer ignore the fact that Africa’s much-needed tax base is being eroded simply through unrecorded revenue. Our continent, now more than ever, needs all the resources if it is to promote its social-economic growth and the wellbeing of its populations. We see the media as partners in our journey to advance the discourse on tax and development” Baine emphasised.

    How ready is Africa to tax digital economy?

    One of the focal points of the just concluded second media engagement and training convened by ATAF was a brave attempt at determining if the continent is ready to tax the digital economy or not.

    Participants agree that there was no clear and singular consensus on the most effective way of taxing digital transactions. Traditionally, the major principle considered in determining the taxability of income earned by foreign entities is physical presence or permanent establishment.

    A major challenge is therefore, determining at what point such non-resident company will be seen to have conducted business in Africa, since it does not require a physical presence to conduct its business transactions in any of the 54 countries. This is particularly so as even the customers that complete transactions on online platforms may not be aware of the exact location of the digital goods and services they are consuming. In some instances, the jurisdiction with the taxing right may be in dispute as the location of the seller can be different from the location of the goods being sold.

    In his submission during a session on the readiness of Africa in taxing the digital economy, the Manager; Resource Mobilisation for ATAF, Thulani Shongwe said: “The digital economy should be legislated and supervised if Africa is to benefit from it through collection of taxes. We should leverage on advent growth of various technologies to collect tax revenues for our nations as well as for supervision purposes which will combat non-compliance from the digital economy.”

    Other panelists and participants also posited that the rise of digital platforms and e-commerce will reshape the retail sector and in turn have deep implications for developing countries’ industrialization processes, which have been at the heart of all successful cases of development across the globe.

    Moreover, African countries more than at any other time need to develop policy responses that will help her in harnessing potential benefits and ameliorate negative consequences.

    Panelists and participants however advocated for a genuine overhaul of the weak tax system and laws to accommodate emerging/digital economy in African countries. The following was further recommended to address challenges arising from the digital economy in Africa.

    To tax digital economy, African countries should first of all:

    • Secure the policy space in multilateral, regional and bi-lateral fora and processes to develop responses to digitization that are tailored to domestic conditions and policy considerations.

    • As data becomes the “primary resource” of an increasingly digitalised economy, countries need to secure a degree of national sovereignty with respect to issues of data ownership, privacy, cybersecurity, structural transformation and economic inclusion objectives.

    • National taxation systems need to adapt to the rise of e-commerce and digital platforms. This requires ensuring an appropriate taxation regime in relation to e-commerce and other digital and their suppliers and to address issues of transfer pricing and profit shifting to low taxation jurisdictions.

    • Policy must address issues of market dominance, competition and market access. The EU has for instance begun to put in place competition policy responses to the impact of network effects that attract users to the largest and fastest growing platforms which result in “winner-takes-most” outcomes.

    • Developing countries need to develop digital industrial capabilities including ensuring high speed and cheap broadband, building linkages between digital platforms and domestically produced goods and services, the provision of industrial financing instruments to do so and the adaptation of technology and skills curricula and institutions to new digital realities.

    Birth of ATMeN

    Going forward, participants at this year’s media engagement and training reiterated the need to not only talk but walk and work the talk. Hence the inauguration of a network to keep the Africa tax conversation alive long after the training had been completed.

    The Africa Tax Media Network (ATMeN) brings together over 150 participants from the first and second media engagement and training sessions. Through the newly formed network, participants would have common but rare platform to share experiences, develop story ideas, promote access to information at multiple levels and identify opportunities for capacity development.

    It is expected that the birth of ATMeN would further push for a strong collaboration between tax reporters and revenue administrations with support from ATAF to enhance tax education and awareness in supporting domestic resource mobilization in the various African countries.

  • NOVA Merchant Bank declares N1.15bn in profit after tax, continues to focus on scaling its business

    NOVA Merchant Bank declares N1.15bn in profit after tax, continues to focus on scaling its business

    NOVA Merchant Bank Limited has declared a profit after tax of N1.15 billion for the year ended 31st of December 2018, a significant increase from N510.6 million achieved in 2017, marking a 125% increase. The result is achieved as it begins to reap the benefits of its investments in its operations, technology and people.

     

    The impressive result demonstrates the Bank’s growth trajectory which is expected to accelerate as it scales its business and grows its client base.

     

    NOVA achieved strong growth across all parameters. The Bank recorded a 54.10% growth in gross earnings from N1.22bn in 2017 to N1.88bn. The bank further grew the total assets by 38.89% from N18bn to N25bn between 2017 and 2018.

     

    This impressive performance marks a very successful year for the newly licensed merchant bank which recently deployed a state of the art and fully digital core banking application. The Bank also recorded remarkable growth in customer acquisition and in line with its objective to be the employer of choice, promoted about a third of its workforce.

     

    Anya Duroha, the MD/CEO, commented “Our stellar results are a culmination of the hardwork, commitment, resilience, discipline and resourcefulness of all our employees. We have been able to drive strong customer acquisition and deploy leading edge technology whilst optimising our costs. We will continue to focus on growing our business, providing solutions tailored to our clients’ needs, building a high performance culture, motivating our employees and creating sustainable value for our shareholders”.

     

    Remarking on the results, Phillips Oduoza, Chairman of NOVA Merchant Bank said “We have been able to build a strong foundation for the success of the Bank and approach the future with confidence and optimism in our business model, value proposition, clients and employees. We remain committed to the implementation of our over-arching philosophy of ‘New Thinking, New Opportunities’ to create value for all our stakeholders.”

     

    The Bank will continue to strive to deliver profitable, responsible and sustainable growth. It remains dedicated to its core values of Uniqueness, Passion, Leadership, Integrity, Fairness and Teamwork (UPLIFT) as it believes these ethos will enable it to surpass the expectations of its clients and stakeholders.

  • FIRS generates N23bn unpaid taxes from corporate firms

    The Federal Inland Revenue Service (FIRS) has generated over N23 billion in unpaid taxes from the recently suspended substitution exercise on corporate bank accounts, which was marked by the imposition of restriction on the accounts of tax-defaulting organisations.

    This was disclosed in Lagos on Thursday by Mr. Babatunde Fowler, the FIRS Chairman.

    The FIRS boss made the disclosure at the Manufacturers Association of Nigeria (MAN) Interactive Forum on Tax Matters.

    Fowler, who was guest speaker at the event, which held at the MAN House in Ikeja, explained that the focus of exercise were 3,000 companies deducting Value Added Tax (VAT) and Withholding Tax (WHT) on behalf of the Federal Government without remitting such.

    The companies, he said, had no tax identification and therefore could not remit the deducted taxes to government, making them treat such deductions as part of their cash flow.

    Fowler stated that the suspension of the exercise for 30 days, announced last weekend, was occasioned by the deluge of corporate taxpayers visiting FIRS offices to regularize their tax affairs and make payments, a situation that stretched the Service administratively, as it could not lift the lien on their accounts as quickly as it wished.

    Thus, the FIRS directed banks to lift restrictions on such accounts to allow affected tax companies regularize their tax status within 30 days and begin to make arrangements for the liquidation of their tax liabilities.

    According to the FIRS Chairman, the Service’s decision to place lien on accounts of businesses, corporate organisations and partnerships with an annual banking turnover in excess of N1billion, but without tax identification, was announced at a stakeholders’ meeting last September.

    “Our position was that if you charge VAT, which is not your money; or deduct Withholding Tax from vendors and you have no tax identification, you cannot even pay tax to the FIRS because you can’t pay without tax identification. So these operators were defrauding the society and the nation by charging consumers VAT, by deducting Withholding Tax and not remitting on behalf of other taxpayers.

    ”We had over 3,000 of such and we said if they do not come forward, we’d follow the law and do what they call substitution. Now, what the Act actually says is that the banks should deduct the amount of taxes from accounts. We, however, told the banks not to deduct the amounts, but put a lien on those accounts and let the taxpayers come forward. And till date, over N23billion has been paid on those accounts,” he said.

    Fowler added that the FIRS also noticed that operators that had banking turnover of between N100 million and N1 billion were equally guilty.

    The FIRS, he disclosed, received information from banks that there are 59,000 of such operators, who are without tax identification and have not been making payments to the Federation Account.

    Fowler stated that the decision to place restrictions on accounts was taken to protect taxpayers, who had Withholding Tax deducted from their contracts, and consumers, who paid unremitted VAT.

    He stated that 85 per cent of VAT goes to the states, which need them for salaries and other obligations.

    He equally stated that during the implementation of the Voluntary Assets and Income Declaration Scheme (VAIDS), it was discovered that 50 per cent of the N96 billion tax debt was related to VAT.

    Responding to MAN President, Engr. Mansur Ahmed’s plea that the FIRS should expand the tax net and not the tax burden, Fowler said the restrictions placed on corporate accounts have helped achieve the former.

    In addition, he disclosed that in the last 18 months, the FIRS has added over 1.2 million business accounts to the tax net and under the Joint Tax Board, which he chairs, over 1 million individual accounts have been added.

    The FIRS Chairman, however, admitted that the Service made some administrative errors, which made banks place restrictions on accounts of a few companies with tax identification.

    This, he explained, arose from wrong information from the banks. But restrictions on such, he added, were lifted within 24 hours in addition to the tendering of formal apology to those impacted.

  • Transcorp Sets Record Performance with Profit After Tax of N20.6bn

    Transcorp Sets Record Performance with Profit After Tax of N20.6bn

    Transnational Corporation of Nigeria Plc (Transcorp), Nigeria’s leading diversified listed conglomerate, has announced its audited results for the year ended 31st December 2018, with a 94% growth in Profit After Tax (PAT) of ₦20.6bn in 2018 compared to ₦10.6bn in the prior year.

    The Group recorded an unparalleled improvement within the year as turnover grew by 30% to ₦104.2bn. Profit Before Tax (PBT) increased to ₦22.4bn from ₦12.3bn in 2017, depicting an 82% year on year growth.

    “We’re proud to have ended the year on a high-note while sustaining a strong performance, which is a reflection of our sound business strategy,” said Valentine Ozigbo, Transcorp’s President and Chief Executive Officer, who took over at Transcorp in January 2019. “We will continuously strive to deliver significant value to our stakeholders while achieving our long-term goals,” he said.

    He further stressed that “This result was achieved due to the increased revenue from the power and hospitality segments of the group. In addition, we were able to cut down on our loss from Forex arising from financing activities by 30% year-on-year as we experienced a relatively stable exchange rate during the fiscal year-ended 2018, this no doubt impacted our Profit before tax as it soared 82% year-on-year.”

    Mr. Ozigbo added ”Transcorp Power Ltd has continued to explore opportunities created by the eligible customer framework initiated by the Federal Government. We are at an advanced stage of negotiations with a number of eligible customers, which will translate into transactions in the months ahead. Our hospitality subsidiary, Transcorp Hotels Plc, also maintained its history of profitability in 2018, displaying the impact of our recent US$100m upgrade at the Transcorp Hilton Abuja and the immense value placed on the hotel’s best-in-class hospitality services.”

    Reflecting on the results, the Chairman of Transcorp, Mr. Tony O. Elumelu, CON, stated, “We remain committed to our purpose of improving lives and transforming Nigeria by powering our industries and businesses while providing our local and international guests with unrivalled hospitality services. This is our way of creating sustainable value for all our stakeholders.”