Tobi Aminu – Page 38 – Sunmola David & CO

Dame Simplice elected 14th President of CITN

The Chartered Institute of Taxation of Nigeria has elected new officers to steer the affairs of the th Institute for the next two years. Following the successful conduct of the 27 Annual General Meeting of the Institute, the leadership baton of the Institute was officially passed on to Dame. Gladys Olajumoke Moyosoreoluwa Ayinke Simplice, by Chief (Dr.) Cyril Ikemefuna Ede, FCTI, who has immediately taken over the position of the Immediate Past President. Dame Simplice was unanimously elected the 14th President of the Institute at an Extra-Ordinary Council Meeting held at the Secretariat of the Institute. Other elected officers of Council included: Mr. Adesina Adedayo, FCTI – Vice President, Barr. Samuel Olushola Agbeluyi, FCTI – Deputy Vice President and Mr. Innocent Ohagwa, FCTI was elected as the Honorary Treasurer. Dame Gladys Olajumoke Simplice started her academic career at Araromi Baptist School, Moloney, Lagos while her secondary education was at the Methodist Girls High School, Yaba, Lagos and Premier Grammar School, Lafenwa, Abeokuta. She commenced her Higher School Certificate (HSC) with Adeola Odutola College, Ijebu-ode and finished at the Saint Gregory’s College, Obalende, Lagos. Thereafter, she proceeded to Ahmadu Bello University, Samaru, Zaria where she graduated with a B.Sc in Economics. Dame Simplice commenced her tax career with the Federal Inland Revenue Department, (now Federal Inland Revenue Service) and retired after 27 years of a fulfilling and meritorious service. Due to her diligence during her service years, she was given a contract appointment as Head, Channels Management of the Corporate Communication Department of FIRS in 2009. She made a lot of improvement in the Department and initiated the idea of a Revenue Museum which is still a work in progress at FIRS. Source: Sun News

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MAN Urges FG to Halt 50% Increase in VAT

Tax news / Tobi Aminu

The Manufacturers Association of Nigeria has called on the Federal Government to jettison the idea of increasing the Value Added Tax by 50 per cent. MAN President, Mansur Ahmed, made this call on Wednesday, during the 35th Annual General Meeting of the Rivers/Bayelsa Branch of the association, held in Port Harcourt. Ahmed explained that the insistence on upward review of VAT would be counterproductive, especially in the light of the non-implementation of the long-awaited minimum wage. He also said that MAN had discussed with the Federal Inland Revenue Service with a view to addressing the numerous challenges in the tax system, adding that the result of such engagement was currently being felt in the nation’s business environment. ‘’We have advised the government to jettison the idea of increasing VAT by 50 percent as recommended by the Federal Ministry of Finance. We have clearly stated that such move will be counterproductive especially in the light of the still awaited minimum wage,’’ he stressed. The MAN president lauded President Muhammadu Buhari for consulting widely before signing the African Continental Free Trade Area Agreement in Niamey, Niger Republic. Ahmed assured MAN members that the Federal Government was committed to enhancing the capacity of Nigeria’s manufacturing sector to take advantage of the opportunities inherent in the continental free trade area and to mitigate the numerous risks. Earlier in his remarks, the MAN Chairman, Rivers/Bayelsa Branch, Senator Adawari Pepple, observed that the manufacturing sector was going through many challenges, including poor electricity supply and double taxation. Pepple explained that the theme of the AGM; ‘Redeeming our Economic Potential through Manufacturing’, was necessitated by the fact that manufacturing had continued to be the key driver of rapid economic growth and the creation of employment. He expressed the need for the country to revamp its critical industries, saying, “If we ignore the role of manufacturing in Nigeria as a tool for redeeming our economic potential, such act will be at our own peril. “However, the role of manufacturing in stimulating employment, directly or indirectly, is complex and requires careful analysis. Manufacturing plays an irreplaceable role in driving growth and economic development.’’ Explaining that the solution to unemployment lies in manufacturing, Pepple urged government at all levels to always reach out to MAN when policies with direct bearing on the manufacturing sector and the economy were being designed. Source: Investor King

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Countdown Begins to Expiration of VAT Exemption on Stock Exchange Transactions

Tax news / Tobi Aminu

It is now one month to the expiration of the Value Added Tax (Exemption of Commissions on Stock Exchange Transactions) Order, 2014 (“the Order”). The Order was made in 2014 by the then. Co-ordinating Minister for the Economy and Minister of Finance in exercise of her powers under section 38 of the Value Added Tax (VAT) Act, Cap. V1, Laws of the Federation of Nigeria, 2004 and confers exemption from VAT on commissions: Earned on traded value of shares; Payable to Securities and Exchange Commission; Payable to the Nigerian Stock Exchange; and Payable to the Central Securities Clearing System. The Order, which became effective on 25 July 2014, was to operate for 5 years as part of the Federal Government’s policy measures to encourage investments in the Nigerian capital market. Subject to any extension of the Order by the Minister of Finance, VAT would become applicable to commissions earned or payable on transactions conducted on stock exchanges in Nigeria effective 25 July 2019. Affected taxpayers should therefore take note and be guided accordingly. Source: Proshare

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NECA rejects FG’s call on states to increase VAT

TAX SERVICES / Tobi Aminu

The Nigeria Employers’ Consultative Association (NECA) has rejected calls by President Muhammadu Buhari to state governments to increase Value Added Tax (VAT) in order to increase their Internally Generated Revenue (IGR). The group said, yesterday, that such move would do more harm to the already burdened private sector. Speaking in Geneva, capital of Switzerland, where the International Labour Organisation (ILO) conference is holding, NECA Director-General, Mr. Timothy Olawale, stated that though the president meant well by urging state governments to increase their Internally Generated Revenue (IGR), considering the reported over N2 trillion in bailout funds to many of the states, increase in VAT or any other form of tax as a way to increase IGR at this time is not only misplaced, but will do more harm to the already burdened private sector and further impoverish the citizens that the president promised to take out of poverty. Olawale e said that state governments cannot unilaterally increase VAT without amendment to the Value Added Tax Act by the National Assembly. The NECA boss averred that “the common man will definitely be at the receiving end of any increase in VAT. Even if businesses are taxed more through likely illegal levies and rates outside the provisions of the law, they will naturally pass the cost to the customers whose purchasing power is already at the lowest ebb.” While proposing a way out for the state governments, he noted that “what needed to be done by the governments and indeed the Federal Government in an aggressive taxpayer enlightenment and expansion of the tax net to capture more citizens as has been posited, arguably as less than 40% of Nigerians are tax compliant.” “Secondly the states should put mechanisms in place to eliminate leakages as a large chunk of the IGR realised does not find its way into government coffers.” “Finally as reiterated over and over again they should drastically cut the cost of governance. Several unnecessary retinues of aides kept by them at prohibitive cost to the state are needless. Besides, ingenious idea of corrupt practices in the name of security votes and frivolous foreign travels by state government functionaries are veritable examples of cuttings in avoidable expenses draining state government purses,” Olawale said. Source: Daily trust

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Gombe gets new Accountant General

Accountancy Services / Tobi Aminu

Governor Muhammad Inuwa Yahaya of Gombe state has approved the appointment of Umar Babagoro Bello as the new Accountant-General of the state with immediate effect. The appointment was contained in a statement issued to newsmen on Monday by Yakubu Mamman, on behalf of the Head of State Civil Service, Alhaji Bappayo Yahaya. Babagoro, who was a Director for several years at the Treasury House, the office of the Accountant General of the state, was recently promoted to Permanent Secretary by Governor Yahaya. A graduate of Accounting from Kaduna Polytechnic; he previously worked at the National Orthopaedic Hospital, Dala in Kano state and the Federal Medical Centre, Gombe. Babagoro later transferred his services to the state government and joined the treasury department. Meanwhile, the head of service has reshuffled twelve permanent secretaries in the civil service. The affected permanent secretaries are: Barrister Obel Yaji from Ministry of Metropolitan Development to Agriculture; Usman Sambo Abubakar, Deputy Governor’s office to Land and Survey; Mohammed Salisu Waziri, office of the Head of Service to Metropolitan and Urban Development; Adamu Musa Kumo from Special Duties to Information; Laraba Ahmed Kawu from Health to State Pension Bureau and Zainab I. Haruna from State Pension Bureau to Health. Others are: Ibrahim Sulaiman from Ministry for Local Government to Animal Husbandry and Nomadic Affairs; Mohammed Manu Malala from Trade and Industry to Local Government; Sule Bappaji from Rural Development to Education; Musa Umar Sani from Local Government Service Commission to Deputy Governor’s office; Benjamin Wabida from Housing and Transport to Rural Development and Muhammad A Umar from office of the Head of Service to Government House. Source: Daily trust

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RMAFC explains involvement in tax monitoring, verification

TAX SERVICES / Tobi Aminu

The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), says on-going monitoring and verification exercise on tax collections by Deposit Money Banks appointed by FIRS and Customs is within its mandate. It said this in a statement issued by Mr Ibrahim Mohammed, Head, Public Relations, on Sunday in Abuja, adding that the exercise was in order. Mohammed said as contained in Section 6(1) of the RMAFC Act, 2004, the mandate provided that the commission should have powers to among others, monitor accruals to and disbursement of revenue from the Federation Account. NYSC Ogun tasks 2438 Corps members on skills acquisition(Opens in a new browser tab). He said the organisation was not a tax authority but a revenue watchdog that monitored revenue collections by revenue generating entities like the Federal Inland Revenue Service (FIRS) and the Nigeria Customs Service (NCS). Other entities it monitored revenue collections from were the Department of Petroleum Resources (DPR), Nigeria National Petroleum Corporation (NNPC) and others that remited directly into the federation account. Envoy assures diaspora commission of safety of Nigerians in Ghana(Opens in a new browser tab). Mohammed said the revenue streams that accrued into federation account under the watch of RMAFC included tax (Withholding Tax and Value Added Tax) royalties, signature bonuses, customs duties and tariffs among others. According to him, the has clarification is imperative following reports that challenges the legality of the exercise by vested interests. “It is worth clarifying that RMAFC do not deal with individual tax payers directly but monitors collections by collaborating with sister agencies like Central Bank of Nigeria (CBN),NNPC, DPR, Customs and FIRS. “This is to ascertain how much was actually collected and remitted into the federation account to minimise revenue leakages,” he said. He recalled that in an earlier exercise covering January 2008 to June 2012, RMAFC had announced the recovery of N4.2 billion from banks, promising that more recoveries would be made. “Buoyed by the huge success recorded, the commission following the approval of the National Economic Council (NEC) launched the second phase of the exercise covering the period of July 2012 to December 2015 which so far establishes N57.7 billion. “Thus far, N48.7 billion has already been recovered and remitted into federation account while the remaining balance of N9.07 billion which relates to withholding tax on dividend only has been duly released to benefitting states Boards of Internal Revenue (SBIR),” he said. Mohammed, however, said the commission was working to ensure transparency and accountability in revenue generation and remittance with a view to reducing revenue leakages. He added that to achieve that, the commission sought further collaboration and cooperation of revenue generating and regulatory agencies, anti-corruption agencies, Civil Society Organisations (CSOs) and the media. RMAFC was established to monitor accruals into and disbursement of revenue from the federation account, review from time to time, the allocation formula and principles in operation to ensure conformity with changing realities. Source: Vanguard

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COA Upholds FHC’s Decision On The Applicability Of VAT To Services Provided Outside Nigeria

Tax news / Tobi Aminu

The Court of Appeal (COA) in its judgement delivered today Monday, 24 June 2019 upheld the decision of the Federal High Court (FHC) in Vodacom Business Nigeria Limited (“Vodacom”) and Federal Inland Revenue Service (FIRS) on the applicability of value added tax (VAT) to satellite-network bandwidth capacities provided to Vodacom outside Nigeria by New Skies Satellites, a Netherlands-based non-resident company. The FHC’s judgement which adopted the “destination principle” for imported services to determine what was liable to VAT in Nigeria, was a significant departure from conventional practice where VAT was based on the “origin principle”. The destination principle holds that VAT is applicable in the territory where goods and services are consumed while under the origin principle, VAT is applicable in the territory where they are produced. The implication of the COA judgement is that Nigerian companies carrying on business with other companies outside Nigeria would be required to self-account for VAT on their transactions notwithstanding that the services were provided outside Nigeria, and regardless of whether the service providers charged VAT in their invoices. Source: Proshare

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Tax Tribunal Resolves 42 Cases Worth N288bn

Tax news / Tobi Aminu

A total of 42 tax-related disputes worth N288.1bn have been resolved by the Tax Appeal Tribunal within a period of eight months. The Coordinating Secretary of TAT, Mr Mohammed Abubakar, gave the figure in Abuja at the opening session of a two-day retreat on effective and efficient tax dispute resolution in Nigeria. Apart from the N288.1bn, he said disputes worth $5.41bn had also been resolved by the Tribunal. The Tribunal is one of the windows provided in Nigeria’s tax administration system, which offers an aggrieved party the opportunity to explore other dispute resolution mechanisms before gaining access to the law courts. Among other things, it helps to reduce the caseload of the over-laden regular courts by providing less formal fora for quicker, cheaper and expert resolution of tax disputes in the public interest. The Tax Appeal Tribunal was established pursuant to Section 59 (I) and the Fifth Schedule of the Federal Inland Revenue Service (Establishment) Act, 2007. Giving a summary of its activities from inauguration in November last year till date, Abubakar said the tribunal inherited 215 pending appeals with a disputed tax value of N607.53bn, $13.52bn and €1.48m. He said new appeals filed between November 2018 and June this year stood at 62 with disputed tax value of N71.7bn and $19.5m. He said, “Appeals resolved mutually or through judgement are 42 with a disputed tax value of N288.1bn, $5.41bn. However, it is pertinent to note that some of the resolved cases are at various stages of settlement or recovery while some might probably go on appeal at the Federal High Court. “Appeals struck out for other reasons such as lack of diligent prosecution or discontinuance by parties are 66 with disputed tax value of N22.03bn and $1.06bn. “Total number of appeals pending at the various zones and at various stages of hearing and determination are 165 with disputed tax value of N309.8bn, $10.21bn, €1.407m.” Out of the pending cases, he said 31 were either reserved for judgement or awaiting the filing of terms of the settlement. “We are hopeful that the 31 appeals would be concluded this month,” the TAT coordinating secretary explained. With regards to its key achievements, Abubakar said the TAT had engendered smooth commencement and sustained sittings across the zones. He added that there had been improved public enlightenment and stakeholder engagement, which had resulted in the gradual acceptance of the Tribunal by taxpayers. “We will keep working on improving the infrastructure to support speedy resolution of disputes brought before the Tribunal” he added. The Permanent Secretary, Ministry of Finance, Mahmoud Isa-Dutse, said the Federal Government, through the Tribunal, had been able to restore taxpayers’ confidence in the nation’s tax system. He called on the tax commissioners to put in more efforts in the area of speedy resolution of tax-related disputes in order to ensure that tax revenue due to the government were paid on time. Represented at the event by the Permanent Secretary, Special Duties in the ministry, Mohammed Dikwa, he urged participants to use the workshop to identify the enablers that would assist in reforming the TAT for effective and efficient tax dispute resolution in Nigeria. Source: Investor King

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FG Defaults on VAT waiver for Domestic Airlines

Tax news / Tobi Aminu

More than one year after the pronouncement for Value Added Tax to be removed from air transport, the Federal Government has failed to implement the order. Findings by our correspondent showed that domestic airlines still pay VAT, charged as five per cent on every flight ticket sold and remitted to the Federal Government. The Media and Communications Manager, Dana Air, Mr Kingsley Ezenwa, said nothing had been said after the pronouncement made by President Muhammadu Buhari last year. President Buhari recently stated that the decision to remove VAT from domestic air transport was in line with global best practices and would make air travel more affordable and subsequently lead to the creation of jobs by the air transport service value chain as well as increase revenue for the government. But airline sources said they had only heard about the order but had yet to see it implemented. The Chairman and Chief Executive Officer, Air Peace, Mr Allen Onyema, said there had been the implementation of zero duty on spare parts but not on VAT. “We have been having back and forth with the Federal Inland Revenue Service. The Federal Government has pronounced it but the FIRS insists there is no gazzete. But they are implementing the zero duty on parts,” he said. According to him, aviation is a tough business and domestic carriers need support from the government. The Airline Operators of Nigeria, the umbrella body for airlines in the country, had estimated that its members were paying over N10bn as taxes annually. The Chairman of AON, Capt. Nogie Meggison, had recently stated that the situation was threatening airline operations. Shortly before the Executive Order, the AON had threatened that its members would no longer pay VAT with effect from June 14, 2018, saying that VAT remittance was unfair, as only domestic airlines were made to pay, while foreign airlines were exempted. The AON had lamented that air travel was also the only mode of transportation that was subjected to the payment of VAT, which had resulted in airlines not being able to optimally utilise their aircraft assets. The FIRS had been mute on the development, describing the order as a policy issue. The Director of Air Transport Regulations, Nigerian Civil Aviation Authority and member of the Presidential Committee on Airlines’ Taxes and Charges, Group Capt. Edem Oyo-Ita (retd.), said no reason had been given for the delay. Source: Investor King

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New Tax ID: FG Directs CBN, Others to Synergise With Joint Tax Board

Tax news / Tobi Aminu

The Federal Government has directed the Central Bank of Nigeria, Nigeria Interbank Settlement System, the National Identity Management Commission to cooperate with the Joint Tax Board in the release of relevant individual records. Vice President Yemi Osinbajo stated this while inaugurating the new National Tax Identification Number Registration System on Monday in Abuja. The News Agency of Nigeria reports that new tax administration was built around data, adding that without credible and comprehensive data, an efficient tax system would be impossible. Osinbajo said that TIN gave the managers of the national tax administration systems the capacity to conveniently and efficiently access and connect information from multiple sources. He said, “(What) we seek to achieve is really to attract business and more importantly, local business; and it is local business investment that develops the economy the most. “If it is easy for the local person to do business, it becomes more attractive to the international business to come into the country. “All of these reforms attract the levels of investment and inflows the Nigerian economy requires for sustainable economic growth. “In the light of the foregoing, all agencies critical to the optimal success of this initiative, the CBN and NIBBS, National Identity Management Commission are hereby directed by the President to provide the fullest co-operation to the JTB especially in the release of the relevant individual records. “The JTB, led by its chairman, Mr Babatunde Fowler, all the partners and stakeholders who have made this possible, deserve our commendation for this giant leap. “The Nigerian business and economic environment are the better for your hard work and continuous innovation,” Osinbajo said. Source: Investor King

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