Tobi Aminu

France has approved a digital services tax despite threats of retaliation by the U.S., which targets American tech giants. The 3 percent levy will apply to revenue from digital services earned in France by firms with over $845 million worldwide. U.S. President Donald Trump ordered an investigation into the tax, a step that could lead to the United States imposing new tariffs or other trade restrictions. France pushed ahead with the tax after EU countries failed to agree a levy valid across the bloc in the face of opposition from Ireland, Denmark, Sweden and Finland. Other EU countries including Austria, Britain, Spain and Italy have also announced plans for their own digital taxes.   Source: The Nigerian

The Ekiti State House of Assembly on Tuesday, passed a new bill that would guide tax policy and revenue generation. The Speaker, Funminiyi Afuye, who passed the bill through a voice vote, commended the House Committee on Finance and Appropriation for a “good job.” He said,   “Ekiti needs to look inwards at this challenging time and generate more money in view of the dwindling revenues of the Federal Government. The passage of the tax bill was sequel to that of the Board of Internal Revenue Service Bill 2019 to law by the legislative body. The Assembly, had during its previous plenary, adopted as a working document, the report of the committee on Finance and Appropriation  in respect of the operation of the State Revenue Board. The Chairman of the committee, Olubunmi Adelugba (Emure Constituency), had, while submitting the report on Tuesday, said   “the new law would engender collaborative efforts among stakeholders through effective tax control system. and formation of better policy for revenue generation in the state.” Adelugba, who is the Chief Whip of the Assembly, had said the new law as contained in the committee’s report would engender collaborative efforts among stakeholders through efective tax payment for more revenue that will be in the overall interest of the residents. Adelugba called attention of the House to the flooding being experienced in some towns, especially in Emure community since the beginning of the raining season and urged government to find urgent and lasting solution to the threats.   Source: punch

Capital market stakeholders have condemned the federal government directive to return Valued Added Tax (VAT), on all stock market transactions, saying the action is disincentive to investment. Already, dealing member firms of the Nigerian Stock Exchange (NSE), have been directed to charge VAT on all commissions applicable to market transactions effective July 25.A notice to dealing member (stockbroking) firms by Olufemi Shobanjo, Head, Broker-Dealer Regulation at the NSE, recalled its circular dated October 27, 2014, referenced BDR/CIR/GOI/10/14, on VAT exemption on commissions on stock transactions order. This was granted by then Coordinating Minister for the Economy and Minister of Finance, in 2014, as published in the Government’s Official Gazette No. 95, Vol. 101 issued on July 30, 2014. Shobanjo said the order became effective on July 25, 2014, and valid for a five-year period, and will expire on 24 July 2019, following which dealing members, in the absence of a further extension, are to charge VAT effective July 25, on all commissions applicable to capital market transactions. But stakeholders, who spoke in an interview with The Guardian, argued that the market had suffered unprecedented lull with low patronage in the past five years even with the removal of VAT. According to them, the return of VAT would further dampen investors’ appetite on stocks, trigger migration of investment to money market instruments, and deter foreign participation in stock market. They maintained that transaction cost in the Nigerian capital market is one of the highest in the world, noting that this has made it difficult to attract global investors to the equalities market, thus reducing its capacity to contribute meaningfully to capital formation in Nigeria. Recall that the former Finance Minister and Coordinator of the Economy, Dr. Ngozi Okonjo-Iweala, in approving the elimination of stamp duties and VAT on market transactions, said these were a panacea to reviving the Nigerian bourse, which then struggled to bounce back since its crash during the global recession in 2009. Okonjo-Iweala had noted that a vibrant capital market is, essential to the government’s Economic Transformation Agenda, especially in terms of raising the much-needed long-term financing for critical infrastructure and the housing sector. She had said: “Research (by the IMF and the World Bank) has shown that solid economic growth in any country is closely linked to the joint development of the banking sector and the capital markets. While the banking sector has already been cleaned-up, the capital market needs some intervention. “Taxes on stock exchange transactions fees are as high as 12 percent (five per cent in VAT and up to seven per cent in stamp duties) – much higher than in other jurisdictions, and these constitute a major disincentive to invest in the Nigerian capital market. I will like to announce that the Federal Government has consented to: Waive the 0.075 per cent stamp duties payable on stock exchange transaction fees; and,“Exempt from VAT, commissions: (a) earned on traded values of shares, (b) payable to the Securities and Exchange Commission (SEC), and (c) payable to the Nigerian Stock Exchange (NSE), and the Central Securities Clearing System (CSCS); by including these commissions in the list of VAT-exempt goods and services.” Against this backdrop, stakeholders urged the Federal Government to, as a matter of urgency, abolish the withholding tax, VAT, and contract stamp from the market to enable it contribute meaningfully to capital formation.   Source: Guardian

The Federal Inland Revenue Service (FIRS), has taken the Midwestern Oil and Gas Company  Limited to a Federal High Court, Lagos over failure to pay  the outstanding tax liability due to the Federal government  in the sum of $97,086,985. In an affidavit sworn to by a legal practitioner from the law firm of DAC legal practitioners, Mr Ayodeji Jolaoso, and filed before the court by Dapo Akinosun, the deponent averred that, as normal obligatory routine, Mid Midwestern Oil and Gas company  filed its self-assessment notice for the year 2012-2013 which was delivered to the plaintiffs showing that it made a profit of $271,857,000 and $173,613,950 in the two years. But FIRS verified the claim by the company in its self-assessment and discovered that the defendant did not pay any amount as its petroleum tax and Educational tax for the year 2012 and 2013 respectively.FIRS thereafter assessed the company based on its declared profit for the year 2012 and 2013, issued and served a notice of assessment dated January 29, 2015 and  demanded notice 11th April, 2018, indicating the outstanding tax liability of the company covering Petroleum ta and educational tax. The break down of the outstanding tax liability of the company are as follows: Petroleum profit tax liability for the year 2012 is $65,065,644.00; petroleum profit tax liability for year 2013 is $28,024,364; Education tax liability for the year 2012 is $2,436,340 and Education tax liability for year 2013 is $1,565,638.00. The total amount of the outstanding tax liability of the company due to the Federal Government from the taxes stated above Is $97.086,985.00.The company did not raise any formal objection to the assessment and has since refused to pay the outstanding debt.The plaintiff instructed its solicitor who wrote a letter further reminding the company of the demand for remittance of the outstanding tax  liability. In an attempt to settle this matter amicably, the plaintiff’s solicitor also invited the defendant to a meeting to discuss the payment of the outstanding tax liabilities highlighted above and other issues arising therefrom by a letter September 19 ,2018.The defendant has refused and neglected to pay its outstanding tax liabilities as assessed by the plaintiff despite all attempts made by the FIRS to ensure the remittance of the company’s Petroleum Profit Tax and Education Tax for the years for the years 2012 and 2013. Consequently, the FIRS, is urging the court to direct Midwestern Oil to pay its outstanding tax liability arising from the Petroleum profit tax and Education tax assessed in the sum of $97,086,985.00. FIRS is also  praying the court to direct the company to pay a penalty of N10,000.00 daily as consequence of late payment of the tax due from 1st February, 2015 till the date its tax liabilities are remitted as prescribed by section 51(1) of the Petroleum Profit Tax Act (PPTA)  cap P13,Law of the Federation 2004 and Education Tax Act. CapE4, Law of the Federation of Nigeria 2004.Midwestern Oil and Gas Company has not filed any defence. Meanwhile the case has been adjourned till after court vacation for hearing.   Source: Guardian