October 25, 2019

Accolades as David Oyetunji bags ANAN’s Fellowship

The Association of National Accountants of Nigeria (ANAN) has conferred the fellowship of the professional body on Mr. David O. Oyetunji, a director at the National Automotive Design and Development Council (NADDC). This development is coming even as accolades and commendations continue to pour in for the professional, career and academic achievements of the new ANAN Fellow.   Our correspondent gathered that Oyetunji, who is the Director of Finance and Accounts at NADDC, which is a parastatal under the Federal Ministry of Industry, Trade and Investments (FMITI) is a professional accountant of repute with a PhD in view. Oyetunji bagged the Fellowship of the prestigious accounting body on the 26th of September 2019. According to experts and professionals, the Fellowship of the Association of National Accountants is described as the climax of the accounting profession, Oyetunji, it was learnt, was also recently conferred with the Africa’s Patriotic Personality Award 2019. Furthermore, the NADDC Director will in October this year be conferred with the Honorary Doctoral Degree in Leadership from the Commonwealth University and London Graduate School. The new ANAN Fellow, David Oyetunji has worked extensively across sectors, and has held several positions across boards, including as Data Processing Officer, Finance Officer, Loan Recovery Head, Treasury Officer, Investment Officer and an Assistant Branch Manager. He was also a Research Economist, a Consultant and General Manager, a Senior Accountant, Senior Auditor, Principal Auditor, Assistant Chief Auditor, Chief Auditor in both the private and public sectors. Oyetunji was also an Assistant Director (Audit), Deputy Director (Finance), Director Special Duties and currently the Director (Finance and Accounts), at the NADDC. On his way to becoming a recipient of these awards through dint of hard work, focus and dedication to duty and his professional calling, Oyetunji  has worked at Federal Ministry of Transport and Aviation, Meteorological Department Services, the Federal Ministry of Finance and the Federal Ministry of Internal Affairs. Private sector experience for the ANAN Fellow is recognized, with his time at Open Gate Finance Limited, the Chartered Institute of Bankers of Nigeria, and Diamond Foam Limited. In terms of academics and qualifications, Oyetunji is an example that others, particularly top officials in public and private service must emulate. The ANAN Fellow has a B.Sc. (Hons) in Economics from the prestigious Obafemi Awolowo University, Ife, an M. Sc. Economics, University of Lagos,  and currently rounding off his Ph. D in Economics at the Abuja University. He also holds a Post Graduate Diploma in Accounting from the famed College of Accountancy, Jos A consummate professional, Oyetunji is a member of several professional bodies including the Nigeria Institute of Management (MNIM), Certified National Accountant (CNA) Fellow Certified National Accountant (FCNA), Fellow Chartered Institute of Management Auditor (FCIMA) Recognizing these professional, career and academic achievements, the NADDC Director will in November be conferred as a Fellow of the Association of Chartered Systems Accountant, fresh from his conferment as a Fellow of the Association of National Accountants of Nigeria, (ANAN) It can also be recalled that the Association of National Accountants of Nigeria (ANAN) is one of the two professional accountancy associations with regulatory authority in Nigeria, the other being the Institute of Chartered Accountants of Nigeria (ICAN). ANAN was founded on 1 January 1979 and was incorporated on 28 September 1983. The Association was chartered on 25 August 1993 by Decree 76 of 1993.   Source: Blueprint

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NSE bargaining with FG for extension of VAT holiday

The Nigerian Stock Exchange (NSE) is in talks with authorities of the federal government to be considered for a five year extension of value added tax (VAT) over transactions performed on the floor of the Exchange.VAT text on wooden cubes above office calculator suggesting tax time or payment. Oscar Onyema, chief executive of the Exchange,  who disclosed this on the sideline of the 58th Annual General Meeting of the NSE held at the bourse’s office in Lagos on Monday, said the five year waiver initially granted the Exchange by the federal ministry of finance lapsed in July this year.   According to him, while in talks with authorities to get an extension of the VAT holiday on transactions performed on investment at the Exchange, the management of the bourse has reintroduced the tax. He said: “As you know, about five years ago, the Exchange received a waiver from the ministry of finance on VAT payment with regards to payments that are done on the floor of the exchange; and this was applicable not only to the Exchange but the CSCS and brokers that execute transactions at the exchange. “That five year waiver lapsed in July of this year. We started earlier on this year in January to engage with government and stakeholders to see if we can extend the waiver for another five year. Giving the softness in the economy and in the capital market, those conversations continue to go high.” While stating that the NSE is optimistic of a positive response from the government on the matter, Onyema stressed that the VAT waiver programme helps investors, and also puts the Nigerian Stock market in a very competitive footing. “This is because if you look at other markets that are competing for other floors with us across frontier and emerging markets, most of them have those waivers permanently in place. “Just recently, Ghana announced their own programme where there will be no VAT on transactions. So we are looking forward to receiving the same type of consideration from the appropriate authorities,” he said. Speaking on the demutualization of the exchange, Onyema noted that the management had achieved tremendously and remained fervently on course. “With regards to demutualization, we have made significant progress. As you know, in 2018, we got presidential assent to demutualization Act which set in place the appropriate legal framework for us to execute demutualization. We have gone ahead to complete and submit documentation with the Security and Exchange Commission (SEC) for their No Objection. “So, once we get their No Objection, we will come back and have meeting with membership to get their final vote. And if do get that final vote, we will then re-submit a formal application to the SEC to complete the mutualisation process and also to the Corporate Affairs Commission (CAC) to be registered as a demutualised Exchange,” he explained. He added that the management of the exchange had been doing all within its power to bring more issuers on board for the sake growing the valuation and wealth creation, reminding that the market is a multi-asset exchange that is ready to accommodate issuers from various sectors. While Onyema congratulated Nigeria at the occasion of its 59th Independence Anniversary, he charged the country work towards accelerating its growth rate. He said, “We must congratulate this nation for attaining this milestone of 59 years. Our aspiration for the nation is that it continues to be one nation that grows significantly and achieve its potentials which we all are always talking about. “We really need to achieve significant growth rate; and if possible, double digit growth rate. I think that is what will take us to our rightful position.” Meanwhile, analysis of the annual report of the Exchange for the 2018 financial year shows that the Exchange recorded N7.6 billion in revenue with a profit after tax of N2.7 billion in the year. Valuation of the market, as at December 30, 2018, stood at N21.9 trillion and the all share index (ASI) also stood at 45,092.83 bps. The market also witnessed the first ever listing of FGN Sukuk bond of N100 billion and 11.75 per cent in fixed income capitalization from N9.10 trillion in 2017 to N10.17 trillion last year.   Source:  Business AM Live

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FIRS Is Right On Tax Liabilities

The recent action of the Federal Inland Revenue Service whereby corporate organisations and business houses which have refused to pay up their tax liabilities to government are sealed off and prosecuted is most salutary. There is nothing wrong in government’s determination to enforce the payment of taxes in the country. There is an urgent need to go back to the basics: the reason for the evolution of the State, the duties of the citizenry, their obligations and the social contract code must be re-examined. All things being equal, an efficient and effective tax administration is the first duty of the State, for taxation is synonymous with sovereignty. Efficient and effective taxation produced the money used in building the Pyramids of Egypt some five thousand years ago. It is in recognition of the autonomy of taxation that Jesus Christ, as recorded in the Holy Book, was quoted as saying that the people should give to Caesar that which belonged to Caesar and to God, that which was His.  Even in Nigeria, in the First Republic, the late sage, Chief Obafemi Awolowo used efficient and effective taxation to build the Western House in Lagos, the Cocoa House in Ibadan and numerous companies and housing estates in the defunct Western Region. The government of the Eastern Region under Dr. Michael Okpara which was driven by efficient and effective taxation system was declared the fastest growing economy in the Commonwealth of Nations. The modernization of traditional administration in the defunct Northern Region under Sir Ahmadu Bello, employed efficient and effective taxation system for the rapid transformation of the North through agriculture. It is therefore unfortunate that with the discovery of oil in commercial quantity and the abolition of regionalism in the wake of military intervention in our body politic, Nigeria was turned into an indolent State wholly dependent on proceeds derived from crude oil. Be that as it may, there is some good logic in government’s decision to confront the issue of long overdue tax liabilities albeit belatedly. It is apposite that there is so much tax money out there running into trillions of Naira not remitted to the FIRS by many corporate organizations and business houses. It therefore appears that government is not even aware of what the outstanding debt amounts to. The reality is that until the issue of fiscal federalism is resolved the poor state of tax management will continue to be a vicious circle. But, ideally, a democracy is supposed to be sustained by millions of tax payers who in turn demand for free and fair elections and dividends of democracy as reciprocal. Yet, what makes the current drive curious is government’s intention to use the Economic and Financial Crimes Commission (EFCC) for tax recovery even when the Ministry of Finance has relevant powers to enforce tax compliance. Consequently, it is observed that taxes and levies on companies appear to be the rage. The ravaging effects of this phenomenon on the economy and commercial life of the country are painfully obvious for all to see. Productivity and future investments are being undermined and cost-induced inflation by the current, in some cases, reckless, application of taxation policies. Manufacturers are complaining that rather than creating an enabling environment for economic growth, government is promoting a crushing burden of over-taxation as well as the misapplication of the tariff system. The direct result of the atmosphere is not only the paucity of fresh direct foreign investment but also the spate of divestment which has continued unabated. In addition, the unit cost of production has become not only uneconomical for local consumption which has been ravaged by low purchasing power; it also makes the often touted diversification of the nation’s export structure an unfeasible proposition. It is lamentable that due largely to the preponderance of easy oil money, some of the essential tenets of the taxation system are being forgotten. The principle of taxation entails not just the gathering of revenues for today’s purposes; it also includes the fundamental riders: that an enabling environment be provided to attract investments which would lead to the creation of a bigger and qualitatively better revenue generation base tomorrow. While the battle for direct foreign investment is being won in other lands, by creating a conducive atmosphere through measures such as tariff reduction, tax holidays, grants and so forth, here, we have chosen to follow a different route as the myriads of divestment amply testifies. Various forms of taxes and purgative levies are being duplicated among the federal, state and local governments. The country has now taken on the garb of a rental state, a creature which lives on the collection of rents (taxes) and not acting as the facilitator of production. Given the illegality of taxes being levied across the country as a result of the dwindling oil revenue, it behooves the government to come out clearly with a list of approved taxes which can be levied at the various tiers of government. Basically, the authorities must ensure that the country is returned to a formal structure of record keeping whereby people’s sources of income are known and are taxed adequately under a true federal structure. Again, our regulatory agencies and agents must not only do their jobs, they must be seen to be doing their jobs. A situation whereby a company registered in the British Virgin Island, for instance, would have a proliferation of subsidiaries in Nigeria which rake in so much money from the country and export their revenues abroad without paying tax in Nigeria is economic sabotage. This is roundly unacceptable and it is the major reason why the government is constantly in dire straits.   Source:  Independent

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What the increase in VAT should mean to you

Value Added Tax (VAT) is definitely the best-known tax in Nigeria. Apart from the fact that we find VAT on receipts given to us almost everywhere e.g at the mall, the cinemas, etc, the Federal Government has practically made Nigerians memorise everything about the proposed increase in VAT like some form of national anthem. We are thus very certain you know that almost everyone in your family knows, that people at the owambes you’ve been attending know and that all your connections on social media also know that the Federal Executive Council (FEC), has approved an increase in VAT rate from 5% to 7.5%. It is yet to be ratified by the National Assembly, but we should keep our fingers crossed however. Besides, the VAT Act has to be amended for the increase to take effect. Do you know what this increase will mean for you and how it will impact your day to day activities? WHAT IS VAT ALL ABOUT? VAT is an indirect tax that you pay when you purchase goods and services. It is levied when there is Supply. We all know from school that in a basic chain of Supply, there is the manufacturer, the wholesaler, the retailer and the final consumer. As VAT is levied on supply, the actual tax burden is shifted from one party to the next until the final consumer. Thus, when the manufacturer is supplied raw materials, manufacturer pays VAT. When manufacturer supplies finished goods to the wholesaler, wholesaler pays VAT. When the wholesaler supplies the goods to the retailer, retailer pays VAT. When the retailer supplies to the final consumer, the final consumer (aka you) pays VAT. The only issue is that the law allows the manufacturer, wholesaler and the retailer to transfer their VAT burden to the final consumer so that the final consumer actually ends up paying the VAT of everyone in the chain of supply. (To understand how this happens, please see our Tax Video on how value added tax works – and our article on Value Added Tax) RATE OF VAT VAT is currently levied at a flat rate of 5% and is administered by the Federal Inland Revenue Service (FIRS). The FEC has however approved a VAT increase to 7.5% and the proposed rate is not to take effect until the VAT Act is amended.   Source: Taxaide

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THE TAX APPEAL TRIBUNAL ALLOWS ONLINE OBJECTION TO TAX ASSESSMENT

Recently, the Tax Appeal Tribunal (TAT) sitting at Lagos held that a taxpayer can object via online means to FIRS tax assessments. This decision was made in Earth Moving International Limited v FIRS. FIRS assessed Earth Moving International Limited (Earth Moving), to tax of over Twenty-Five Million Naira. Earth Moving objected to this tax assessment and the FIRS issued a revised assessment. This revised assessment was served on Earth Moving on 29 August 2018. Earth Moving again objected to the revised assessment through an email Notice of Objection dated 26th September 2018 which was also physically served on the FIRS on 2nd October, 2018.  FIRS however stated that Earth Moving filed the Notice of Objection out of time making the revised assessment final and conclusive. Earth Moving however maintained that it filed the objection within time by the email and physical objection but since the FIRS was not giving it face, it instituted this action against FIRS at the TAT. The TAT held that Section 69 of Companies Income Tax Act (CITA), gives a taxpayer the opportunity to object to an assessment by the FIRS within 30 days from the date that the notice of assessment was served. FIRS served the revised tax assessment on Earth Moving on 29 August, 2018 and Earth Moving thus had 30 days i.e. till 28 September, 2018 to object. Earth Moving sent the Notice of Objection to the Tax Controller of FIRS Lagos Zone on 27 September, 2018 via email and received a delivery receipt notification. Also, there was a strike on 27 and 28 of September 2018 and the 1st of October 2018 was a public holidaY. Earth Moving then sent the physical notice of objection on 2nd October. TAT held that as CITA did not provide the means by which the Notice of Objection must be served (it just provided that it must be in writing), the email objection was valid. The TAT also stated that as Earth Moving could not have physically served its Notice of Objection on the 28th of September because of the public holiday, the physical service on the 2nd of October sufficed. The TAT thus held that Earth Moving had fulfilled its legal obligations as provided for by CITA. The law allows taxpayers to object to taxes that the tax authorities visits on them. Generally, the period for objection is 30 days from the date you receive a letter from the tax authorities telling you the amount of taxes you are to pay. If you do not object within the timeframe given by law, you lose your right of objection and it is deemed that you have accepted that you will pay the tax. The assessment thus becomes final and conclusive! Earth Moving in this case was being smart, you know. They sharparly sent their Notice of Objection via email to FIRS when they realized that the last date stipulated by law would be a public holiday and that FIRS can like to say that one does not concern them, which is exactly what they did. Now that the TAT has held that any objection to a tax assessment suffices as long as it is written, you now know that the tax authorities ti wa online! Moral lesson however is, don’t joke with tax authorities and deadlines. You can be proactive and gbe bodi, finding creative means to comply with the tax laws and guess what? you may actually stand a chance of the TAT backing you up just like it did for Earth Moving. Be like Earth Moving!    Source: Taxville

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