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Tobi Aminu

‘Economy not in good shape to increase VAT rate’

TAX SERVICES /

Okwudili Ijezie is the Managing Partner/CEO, Okwudili Ijezie &Co. In this interview with Kehinde Olatunji, he urged the Federal Government to drop the idea of increasing the VAT rate until the economy of the country is in good shape. He lamented that many businesses are merely struggling to remain afloat and the increase if effected, could lead to their sudden deaths. He also spoke on the ongoing seminar to train individuals and government agencies on Internal Generated Revenue (IGR), tagged: “Strategies for improving IGR for States in Nigeria.” The government has always collected taxes. Is there anything it has not been doing well that you think this seminar will correct? May I first thank The Guardian crew for its initiative and resilience on matters that concern the nation. I’m grateful for your persistence in seeking relevant information that will better the lots of the country. Now, to your question, the current happenings in the political and economic environments of the nation demand that all hands must be on deck to take the country to the next level. The major objective of the seminar is to expose participants to alternative strategies and initiatives that will improve transparency, efficiency, and effectiveness of IGR Systems. Participants would equally be equipped with the basic skills for evaluation and appraisal of the existing Revenue Collection Framework and what is happening in other jurisdictions. Also, a fresh awareness will be created for participants on legal and institutional frameworks that are essential in effective revenue collection. The government encourages people to be self-employed yet does not create a conducive atmosphere for them to thrive. Over time, these businesses have been taxed so high that they are being threatened. How can this be addressed? I do not entirely agree with your assertion that the government does not create a conducive atmosphere for self-employed businesses to thrive. The seminar will focus on the current tax policies and there will be suggestions on topical issues. For instance, it will address issues of whether to increase the Value Added Tax rate, which currently is 5 per cent. All aspects of the tax laws will be touched at the seminar, with a view of equipping participants with the current legal and institutional framework for revenue collection. Do we have laws that govern taxation in Nigeria and how can we ensure that the government works within them? Yes, we have Laws that govern taxation in Nigeria. These include: Personal Income Tax Act, Cap P8, LFN 2004 (as amended), Value Added Tax Act, Cap VI, LFN 2004 (as amended), Petroleum Profits Tax Act, Cap P13, LFN 2004 (as amended), Companies Income Tax Act, Cap C21, LFN 2004 (as amended), Tertiary Education Trust Fund (Establishment, Etc) Act 2011, Stamp Duties Act, Cap S8, LFN 2004 (as amended) among others. In order to ensure that government works within the ambit of tax laws, I will advise individuals and corporate organisations to engage the services of tax consultants, with a view to utilizing all the tax incentives embedded in the various tax laws in order to reduce their tax liabilities to the legally acceptable minimum. These tax consultants, who are versed in the tax laws, would ensure that taxpayer’s rights are applied.  These rights include: Object to a tax assessment that is not in agreement with business activities as provided by the tax laws, Appeal against a notice of refusal to amend an assessment as specified by the relevant laws Be issued a tax clearance Certificate (TCC) upon settlement of tax liabilities or be given a notice of denial within two weeks of application, TCC itself is free, and be granted refund on excess tax paid after proper auditing with the option of using it to offset future tax liability. Do you think the government is overtaxing people? If not why the outcry about heavy taxes? To be honest, I do not think that the government is overtaxing people. In the same vein, I am not aware of any outcry about heavy taxes. The tax rates, to the best of my knowledge, have not been increased for over two decades.  However, I am aware of the outcry by several people and organisations against the proposed increase of Value Added Tax (VAT) rate, from the present rate of 5 per cent to 7.5 per cent.  My opinion is that the time is not ripe to effect this increase. I appeal to the Federal Government to drop this idea of increasing the VAT rate until the economy is in finer shape. Many businesses are merely struggling to remain afloat. The increase, if effected, could lead to their sudden deaths. What I will advocate is for the government to strategise and bring more people into the tax net. This is part of the raison d’être of our IGR SEMINAR. May I appeal to the various state governments and the federal government, and even the local governments to utilise this seminar to up their internally generated revenues.   Source: Punch

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CAC Extends 50% Reduction

CAC SERVICES /

The Corporate Affairs Commission, CAC, has announced on Monday that it has extended the 50 percent reduction in registration fee for business names in Nigeria. The programme launched under CAC’s Business Incentive Strategy allows intending business owners to pay N5, 000 less of the original fee. However, the discount window will end on Friday, August 16, after which payment for registration of business names will revert to the original fee. The commission, in a statement released in Abuja through its Head of Public Affairs, Moses Adagusuu, said that the commission has successfully registered 220,773 Micro, Small and Medium Enterprises, MSMEs, in the space of ten months. The CAC said that the MSMEs were registered between October 2018 and July 31, this year. Adaguusu said, “From when the BIS started in October 2018 to July 31, the commission gathered at least 220,773 MSMEs under the BIS window. The list is growing day by day.” It also reminded Micro, Small and Medium Enterprises about the benefits of registering their business names with the commission. Adaguusu revealed that “Registration of their businesses will enable them own corporate accounts with banks, have access to loans, grants and other government interventions.” The commission clarified that the three-day extension of the cut in registration fee was to allow MSMEs that could not register due to the Id-el-Kabir Islamic celebration to take advantage of the opportunity at the reduced cost of N5, 000. It also revealed that MSMEs could register their business names through the online registration porter ( services.cac.gov.ng or cac.gov.ng ) or offline at the Commission’s offices, nationwide.   Source: Investor King

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FIRS: VAT, withholding tax must be remitted on the 21st of every month

Tax news /

The Federal Inland Revenue Service (FIRS) says all companies must remit value-added tax and withholding tax by the 21st day of every month. According to a statement signed by Babatunde Fowler, the FIRS chairman, some companies have been found not to deduct these taxes at source. VAT is a consumption tax placed on a product whenever value is added at each stage of the supply chain – from production to the point of sale. Withholding tax, however, is deducted at source by organisations or bodies making payments to suppliers of goods and services. They are required to remit the deducted sum to the tax authority as payments are being made to suppliers/vendors. “It has come to the notice of the service that some companies do not deduct WHT/VAT from the compensation paid to their distributors contrary to provisions of the ‘Companies Income Tax (Rates, Etc. Deduction at Source (Withholding Tax) Regulations and Paragraph 3.8 of Federal Inland Revenue Service Information Circular No. 2006/02 of February 2006, which states that commission earned by distributors/dealers will be subjected to WHT and VAT,” he said. “Following this discovery, the Service hereby puts all companies, particularly those in the fast-moving consumer goods sector on notice that compensation due to their distributors and customers in the form of commission, rebates etc and by whatever means of payments, whether by cash, credit note or even goods-in-trade must be subjected to WHT/VAT at the appropriate rates as applicable and remit same to the FIRS accordingly on or before the 21st of every month.”   Source: The Cable

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FMC Keffi Generates Over N300 Million As Tax Annually Yet No Any Presence Of Nasarawa State

Tax news /

The Benue state Board of Internal Revenue Service (BIRS) Sunday said it will clamp down on illegal tax collectors. BIRS also stated that it has arrested one Aga Peter for impersonating as a staff of the revenue Board. Chairman of the board, Andrew Ayaban in a statement issued Sunday said the suspect, Mr  Peter was arrested with the assistance of the Police at an illegal check point at Tor Mkar in Konshisha local government area of Benue state, collecting illegal taxes from unsuspecting members of the public.   He said the impersonator at the time of arrest was found in possession of a fake BIRS identity card and illegal receipts with which he defrauded unsuspecting victims. He said the board under his leadership was committed to end the regime of illegal tax activities adding that the gesture has already started yielding results. Ayabam said, in order to reposition the revenue board, he abolished all revenue check points and terminated the contracts by underperforming tax consultants.    Source:  Blueprint

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More African countries are looking to tax mobile money transactions

TAX SERVICES /

Much has been written about the need for African countries to collect more tax revenue from citizens and businesses. The IMF has been imploring sub-Saharan countries, particularly over the last decade, to focus on expanding and diversifying their tax bases. Some countries have taken heed of the advice. Yet most haven’t moved beyond lip service. When it comes to new taxes, we often see African governments (especially those led by new administrations) setting their sights on commodity players like mining companies and oil multinationals. Now there’s also a growing trend of governments looking to their fastest-growing sector of the past two decades: the mobile phone industry. In most countries, phone companies and mobile operators already pay taxes. The more recent trend is to initiate or raise specific mobile consumer taxes—particularly for devices and transactions. Just over a year ago, Uganda’s regulators introduced a so-called social media tax and a levy on mobile money transactions. Uganda is not alone: Industry research from 2017 shows up to 26% of the taxes paid in the mobile industry in 12 Sub-Saharan countries were industry-specific. Kenya, often highlighted as the leading light of mobile money sector, has also been increasing taxes on transactions and on airtime use, which can result in double taxation—you can’t have a mobile money transaction without already having paid for airtime.   Source: QZ

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TFC urges FG to increase tobacco tax by 70%

Tax news /

Tobacco-Free Club (TFC), University of Abuja chapter,  has called on the Federal Government to increase tobacco tax to 70 per cent of the commodity’s retail price. Mr Izang Lawrence, former President of the Club, made the call on Monday at a campaign to enlighten Nigerians on the national tobacco control act of 2015, in Abuja. “The government must significantly increase tobacco tax to be at par with the World Health Organisation (WHO) recommended level of 70 per cent of the retail price over the next five years,” he said. He recalled that in October 2005, Nigeria ratified the World Health Organisation Framework Convention on Tobacco Control (FCTC). “The framework recommended many effective ways of controlling tobacco in its various stages and protecting public health. “Till date, a lot of the recommendations of the FCTC, which Nigeria is a signatory to are yet to be implemented by government,” Izang said. According to him, one of the recommendations of the FCTC is about 70 per cent tax increase. But in Nigeria, it is currently around 20 per cent. Izang also called for stiffer laws to prohibit the sale of tobacco to minors and smoking in public places. “We want the prohibition of sale of tobacco products to and by anyone below age 18 and ban on sale of cigarettes in single sticks. “Our tobacco control group will never be tired of asking the government to significantly increase tobacco tax. “The present tax regime is insignificant and insufficient to lead to price increases and will definitely not reduce consumption. “We want prohibition of smoking anywhere on the premises of a child care facility, educational facility and health facility; and other prohibited areas for smoking include playground, amusement parks and other public spaces. “We also want prohibition of tobacco advertising, promotion and sponsorship of any kind,” he said. He urged the Federal Government to begin the process of earmarking a significant fraction of tobacco tax and levies for tobacco control and to educate smokers of the dangers of smoking. Izang described earmarking a fraction of the revenue accruable from tobacco taxes and levies as one of the best practices effective for the promotion of public health. He added that the National Tobacco Control Act 2015 provided for the setting up of the Tobacco Control Fund to implement the National Tobacco Control Regulations. “Nigeria has approved the tobacco control regulations, which will make it possible for the Federal Ministry of Health to implement and enforce the Nigeria Tobacco Control Act of 2015. “We ask that the Federal Government to start the process of earmarking a significant fraction of tobacco taxes and levies for tobacco control and national health coverage,” he said. According to him, the National Tobacco Control Act 2015 provides for the setting up of the tobacco control fund and up till now it has not been implemented. Kenneth Amah, President, TFC, University of Abuja, stressed the need to create more awareness on the dangers of tobacco smoking. Amah said that government had reviewed the standard for cigarettes to include the complete ban on cigarettes with characterizing favour, including menthol.   Source: Sun News

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Federal institutions in Yaba not paying taxes, council boss laments

TAX SERVICES /

The chairman of in the council include University of Lagos (UNILAG), Yaba College of Technology (YABATECH), West African Examination Council (WAEC), Federal College of Education (Technical), Psychiatric Hospital, Queen’s College, three military barracks, State CID, among others. According to the council boss, none of the institutions occupying half of the council’s land is paying a dime into its purse. “We spend a lot of money to provide infrastructure, maintain them and make workers of these institutions comfortable.” Omiyale spoke during a business summit organised by the council to provide a forum for interpersonal relationship between the council and the business community. He said: “Very few of the businesses operating within Yaba LCDA pay our rates; some of those paying are doing it after being compelled. We have shown them what the resources we get is spent on, and we are very prudent in our spending.” The chairman further urged business owners to prioritise youths in Yaba for employment as part of their Corporate Social Responsibility (CSR). Facilitator of the summit, Prof. Abiola Sanni, a tax consultant, advised the councils to embrace e-payment and reduce physical contact and cash payment. This, he said, would ensure prompt issuance of receipt. A call was made for heads of the institutions to pay the required rates for the businesses operating within their institutions.   Source: Guardian

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CAC extends 50% cut for biz registration fee by 3 days

CAC SERVICES /

The Corporate Affairs Commission (CAC) has extended by three days the 50 per cent reduction in the registration fee for Business Names with effect from 13th August, 2019. A statement signed by the Commission’s Head of Public Affairs, Moses Adaguusu, revealed that the fee cut would now end on Friday, 16th August, 2019. “The three day extension is to enable Micro, Small and Medium Enterprises (MSMEs) that could not register their businesses during the promo because of the Sallah holidays to do so,” the statement stated. CAC said registration of their businesses will enable them own corporate accounts with Banks, have access to loans, grants and other government interventions. “Members of the public are enjoined to take advantage of the three Day extension to register their Business Names at the reduced cost of N5,000. Registration can be done online or at any of the Commission’s Offices nationwide,” the statement added.   Source: Daily trust

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CAC registers 220,773 MSMEs in 10 months

CAC SERVICES /

The Corporate Affairs Commission on Monday announced that it registered 220,773 Micro, Small and Medium Enterprises in the last 10 months. The CAC said in a statement issued by the commission’s Head of Public Affairs, Moses Adaguusu, in Abuja. It said that the MSMEs were registered between October 2018 and July 31, adding that it had also extended by three days, the 50 per cent reduction in the registration fee for business names window, under its Business Incentive Strategy. The commission said with the extension, the promotional reduction fee would now end on Friday, August 16. It explained that the three-day extension was to enable micro, small and medium enterprises that could not register their businesses during the promo because of the Sallah holidays to do so. Adaguusu said, “From when the BIS started in October 2018 to July 31, the commission registered at least 220,773 MSMEs under the BIS window. The list is growing day by day. “Registration of their businesses will enable them own corporate accounts with banks, have access to loans, grants and other government interventions.” The commission urged members of the public to take advantage of the three-day extension to register their business names at the reduced cost of N5, 000. It said registration could be done online or at any of the commission’s offices nationwide.   Source: Punch

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