We Won’t Increase Taxes, FIRS Assures Companies

Acting chairman of the Federal Inland Revenue Service (FIRS), Zacch Adedeji, has allayed fears being expressed by corporate organisations that the resolve of FIRS to increase the country’s tax-to-GDP ratio to 18 per cent from 10.86 will lead to a hike in taxes. According to a statement by Special Adviser on Media and Communication to the Ag Executive Chairman, FIRS, Dare Adekanmbi, Adedeji said such resolve would not necessarily lead to increase in taxes or introduction of new taxes as the President Bola Tinubu-led administration is determined to create a wholesome environment for businesses to flourish. The FIRS chairman had said the agency under his leadership would in the next three years achieve an eight per cent raise in tax-to-GDP ratio to surpass Africa’s average of 16.5% without stifling investment or economic growth. The plan had triggered muffled apprehensions among entities corporate that the decision could cause an increase in tax rates or introduction of new ones. Addressing representatives of top large tax-paying companies during a get-together at Four Points by Sheraton in Lagos on Wednesday, Adedeji said, “Our belief, understanding and vision as a revenue-generating agency is not to introduce any new tax as we only want to use data to improve compliance.” A statement by his Special Adviser on Media and Communication, Dare Adekanmbi, quoted the FIRS chairman as saying that the invited companies and those willing to voluntarily carry out their tax obligations have nothing to be afraid of. “Our plan is simple. We want to grow tax revenue and we only want to tax prosperity and not poverty. Therefore, it is not in our interest to kill the trees that bear the fruits. My first ‘love letter’ to you is to appreciate what you have done. So, you don’t have anything to be afraid of. “We will not collect what is not due to us. But we don’t want anyone not to pay what is due to us. Fair engagement is our plan. Rest assured that the 18% tax-to-GDP target will not translate to increase in taxes. “If you have been listening to Mr Taiwo Oyedele who is the chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, you will have known that part of the mandate of the committee is to reduce the number of taxes,” he said. According to him, the purpose of the engagement with the companies is to factor their inputs into the strategic action plan being mapped out in order to address challenges hampering tax revenue collection. He lauded the invited companies for their high sense of responsibility, urging them to continue to discharge their tax obligation diligently.   “I must also commend your commitment to upholding high tax compliance standards and responsible corporate citizenship, which sets you apart as the top taxpayers in Nigeria. “This aligns perfectly with our vision of making taxation the pivot of national development through voluntary compliance. Your respective industries play a pivotal role in generating substantial tax revenue for government and in shaping economic and fiscal stability of the nation. “We are not unmindful of the challenges facing businesses in Nigeria with the ongoing reforms to improve economic performance. These are painful but necessary choices we must make as a nation to attain our full potential,” he said. The chairman, while responding to some of the concerns raised by representatives of the companies such as multiplicity of taxes, duplication of tax oversight on corporate entities, promised to address the issues raised. Some of the companies at the event included Nestlé Nigeria Plc, ExxonMobil, Shell, Guinness, Nigerian Breweries Plc, Flour Mills, Dangote Group, MTN, British American Tobacco company, First Bank, Access Bank, Guaranty Trust Bank, Zenith Bank Plc, KC Gaming Limited (Bet9ja), Airtel, Seplat, BUA Cement, Nigeria Liquified Natural Gas, NNPC Limited and others.

NDIC Boss Urges ICAN To Integrate Deposit Insurance System Courses

The Managing Director/Chief Executive of the Nigeria Deposit Insurance Corporation (NDIC), Mr. Bello Hassan, has called upon the Institute of Chartered Accountants of Nigeria (ICAN) to incorporate courses on the Deposit Insurance System (DIS) into its educational programs and modules. Mr. Hassan made the call during a courtesy visit by the Governing Council Members of ICAN, led by the President of the Institute, Mr. Innocent Iweka Okwosa, to the Corporation’s Management in Abuja. Director, Communication & Public Affairs Department, Bashir A. Nuhu, in a statement Thursday in Abuja, quoted Mr. Hassan saying that including DIS courses within ICAN’s training programmes would enhance the understanding of DIS not only within the banking sector but also among professional accountants. He described it as critical to bridging the knowledge gap on the mandate and achievements of DIS, its critical role in protecting depositors and its contribution to financial system stability. He added that it would also address misconceptions of the benefits and limitations of the deposit insurance system. Mr. Hassan further stressed the significance of public awareness in maximizing the impact and reach of the deposit insurance system throughout the general public and the financial sector as a whole. He stated that given the novel nature of the scheme in Nigeria and globally, collaboration with ICAN and other stakeholders had become imperative to strengthen the effectiveness of the Corporation’s operations to fully implement its mandate. Mr. Bello Hassan congratulated Mr. Okwosa on his assumption of office as the 59th ICAN President. He encouraged him to ensure that chartered accountants uphold the Institute’s values of accuracy and integrity in all aspects of their work. He also reassured the Institute of the Corporation’s unwavering support and partnership in furthering the practice of accounting in the country. He also extended condolences to the Institute on the recent passing of the first chartered accountant in Nigeria, Mr. Akintola Williams who left a legacy of excellence and professionalism that has paved the way for the growth of the profession in Nigeria. Mr. Hassan commended ICAN’s commitment to maintaining zero tolerance for professional misconduct, asserting that this stance would continue to provide confidence to the Corporation and other stakeholders in relying on the work of accountants in fulfilling their mandates. In response, Mr. Innocent Iweka Okwosa praised the NDIC MD for his exemplary leadership and the professionalism he has instilled in the Corporation’s operations. He noted that under Mr. Hassan’s leadership, the Corporation has made substantial contributions to ensuring the safety and stability of the Nation’s financial system, a crucial element for the growth and prosperity of the Nigerian economy. The collaboration between NDIC and ICAN holds the promise of strengthening the knowledge base among accountants and financial professionals while fostering the growth and stability of Nigeria’s financial sector.

Liquidated MFBs/PMBs: NDIC Pays N1.08bn To 29,573 Depositors

The Nigeria Deposit Insurance Corporation (NDIC) has paid a cumulative insured sum of N1.084 billion to 29573 depositors of the closed Microfinance Banks/ Primary Mortgages Banks. The Managing Director, Bello Hassan who disclosed this in his speech at the NDIC Special Day at the ongoing 18th Abuja International Trade Fair 2023, said the payments are still ongoing and depositors with funds exceeding the insured limit will receive liquidation dividends after recovery of debts and sale of physical assets of the closed banks. He said following the revocation of licenses for 179 Microfinance Banks and 4 Primary Mortgage Banks by the Central Bank of Nigeria (CBN), the NDIC immediately commenced liquidation of the banks and began disbursing insured sums to depositors within just 7 days of the   closure   of   these   banks. He said currently, the Corporation is in the process of verifying and paying liquidation   dividends   to   depositors   and   stakeholders   of   20   closed banks. The banks are Allied Bank, Peak Merchant Bank, Commerce Bank, Continental Merchant Bank, Financial Merchant Bank, Fortune Bank, Gulf Bank, Hallmark Bank, Icon Merchant Bank, Liberty Bank, Liberty Bank, Nigeria Merchant Bank, North South Bank, Premier Commercial Bank, Prime Merchant Bank, Progress Bank and Merchant Bank. Urging  eligible parties to visit NDIC for more information and download verification forms   at,  www.ndic.gov.ng , he said this   year’s   theme, “Sustainable   Financing   and   Taxation   as   Drivers   for   the   New Economy,”  is   especially   relevant   given   the   determination   of government’s   efforts   towards   achieving   sustainable   growth  by strengthening the financial environment to boost economic growth. This, according to him, falls in line with the Corporation’s contributions of ensuring the stability of the financial system by effectively complimenting the CBN in supervising the banking sector and safeguarding depositors’ funds from the adverse effects of bank failures when it occurs. Speaking further he said “indeed, Nigerian depositors are our priority and our foundation is built on ensuring the safety and security of their deposits. This ideal is encapsulated in our strap line; “Protecting your bank deposits!”. This is crucial for financial inclusion because it gives Nigerians the assurance that   their   money is   safe   and   accessible when   need banks,  continuous   monitoring   and   oversight   serves   as   consumer protection for depositors which enhances confidence in the financial system.   This   acts   as   an   incentive   for   the   unbanked   to   access financial services of licensed banks. “ He cautioned members of the public of illegal activities of fund managers often referred to as “wonder Banks or Ponzi Schemes. He said these entities offer high-interest rates and profits that are too good to be true, leading to devastating losses for many, noting that these “wonder banks” are neither licensed by the Central Bank of Nigeria   nor   covered   by   the   NDIC   deposit   insurance   scheme. He encouraged members   of   the   public   to   patronize   only banking institutions with a display of the NDIC Stickers carrying the words: “Insured by the NDIC” in their   banking halls or entrances   and various branches across the country.

LCs’ Rejection Pushes Nigerian Businesses To Black Market

Hope for cheaper goods are further from sight as local businessmen now have to source foreign exchange (forex) from the parallel market, otherwise known as black market to meet with their business transaction abroad, after the rejection of their Letter of Credits (LCs). The implication is that resorting to the black market will naturally push up the cost of doing business which will naturally be passed on to consumers, thus further pushing up already high prices of goods. Over two weeks after the Central Bank of Nigeria (CBN) promised to clear over $10 billion foreign exchange debts owed to the Deposit Money Bank, the apex bank has yet to do so according to findings. unconfirmed reports say foreign counterparts of Nigerian businessmen are now rejecting their Letter of Credit (LC), thereby refusing to make business transactions effective.A letter of credit is a letter from a bank guaranteeing that a buyer’s payment to a seller will be received on time and for the correct amount. If the buyer is unable to make a payment on the purchase, the bank will be required to cover the full or remaining amount of the purchase. It may be offered as a facility (financial assistance that is essentially a loan). But following the forex crisis that has bedeviled the country’s financial system; foreign suppliers are now demanding cash transfers in place of LCs as faith in the Nigerian banking system wanes owing to the dollar shortage.It will be recalled that, the Central Bank of Nigeria (CBN) has been unable to reduce the backlog of forex owed airlines and other partners due to shortage of forex. The Central Bank of Nigeria (CBN) sold what is called forward contracts to several Nigerian businesses with the promise of dollars at an agreed price in future. The banks opened LCs on the back of the forward contracts, which were then used to buy goods from the foreign suppliers.Apparently scared by the growing backlog and with no assurance of when it will be cleared, correspondent banks are pulling the plugs on local Nigerian banks.A correspondent bank acts as an intermediary or agent, facilitating wire transfers, conducting business transactions, accepting deposits, and gathering documents on behalf of another bank.Correspondent banks are most likely to be used by domestic banks to execute transactions that either originate or are completed in other countries. Domestic banks generally use correspondent banks to gain access to foreign financial markets and to serve international clients without having to open branches abroad.Bankers say the CBN’s failure to clear the dollar backlog has put them in a very tight FX liquidity position and has forced them to suspend several transactions including school fees and Personal Travel Allowance applications.