Tobi Aminu – Page 71 – Sunmola David & CO

FG secures N1bn EFCC traced to Patience Jonathan

Accountancy Services, Uncategorized / Tobi Aminu

The court ordered that the forfeited sum be deposited in the Treasury Single Account of the Federal Government. A Kano division of the Federal High Court has ordered an interim forfeiture of the sum of N1,000,494,000, suspected to belong to former First Lady, Patience Jonathan, to the Federal Government. According to an investigation conducted by the Economic and Financial Crimes Commission (EFCC), the sum in question was lodged in three deposits with Fidelity Bank Plc on May 20 and May 25, 2015. The bank account allegedly belongs to Magel Resort Limited, a company linked to Mrs Jonathan, according to a statement signed by the EFCC’s spokesperson, Tony Orilade, on Friday, February 1, 2019. The commission had received information that the money was not being utilised and had commenced an investigation that allegedly revealed that Mrs Jonathan and some relatives of former president, Goodluck Jonathan, were directors of the company. Others listed as directors of the company are Oba Oba Tamunotonye, Goodluck Jonathan Aruera, Goodluck Jonathan Ariwabai and Esther Fynface. Investigations revealed that the sum of N500,000 was deposited on May 20, 2015 by one Fynface, who is alleged to be in charge of the company, while N1 billion was transferred in two tranches on May 25, 2015 from PAGMAT OIL AND GAS NIGERIA LIMITED, a company that was not incorporated with the Corporate Affairs Commission. Acting on an ex parte motion filed by the EFCC to forfeit the money to the government, Justice A. Lewis-Allagoa ordered that the forfeited sum be deposited in the Treasury Single Account of the Federal Government. Source: Punch

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CAC applauds NASS on passage of Companies and Allied Matters bill

CAC SERVICES / Tobi Aminu

The Corporate Affairs Commission (CAC), yesterday, described the passage of the Companies and Allied Matters Bill by National Assembly as a feat, monumental and demonstrative of the harmonious relationship existing between the two chambers of the Eighth Assembly. Reacting to the passage of the bill by the House of Representatives after Third Reading on Tuesday, January 22, 2019, the Acting Registrar-General of the commission, Lady Azuka Azinge noted that the bill, which seeks to repeal the extant statute (the Companies and Allied Matters Act, Cap C20, Laws of the Federation of Nigeria 2004) and enact another statute in its place, represented one of the biggest pieces of legislative review in the history of the National Assembly. She noted further that, since the extant statute was enacted almost 30 years ago, it had not witnessed any significant review. Lady Azinge stated that the main thrust of the bill was to ensure the ease of starting and growing business in Nigeria; ensure more appropriate regulation for MSMEs; enhance transparency and shareholder engagement; align regulatory framework with international best practice for competitiveness and, in the context of a global economy, make Nigeria an investment destination of choice. Describing the bill as testimonial of a partnership that worked, she acknowledged the collaboration between the commission, government and private sector stakeholders. She said in particular the support of the Presidential Enabling Business Environment Council (PEBEC), through its secretariat, the Enabling Business Environment Secretariat (EBES); the National Assembly Business Environment Roundtable (NASSBER); the Technical Advisory Committee of the Senate; the Federal Ministry of Industry, Trade and Investment (FMITI); the Federal Ministry of Justice (FMJ); the Securities and Exchange Commission (SEC); the Nigerian Bar Association through its Section on Business Law (SBL-NBA); the Institute of Chartered Accountants of Nigeria (ICAN); the National Association of Chambers of Commerce, Industries, Mines and Agriculture (NACCIMA); and the Manufacturers Association of Nigeria (MAN). Others were the Nigerian Investment Promotion Commission (NIPC); the Federal Inland Revenue Service (FIRS); the Institute of Chartered Secretaries and Administrators of Nigeria (ICSAN); the Association of National Accountants of Nigeria (ANAN); the Nigerian Stock Exchange (NSE); the Business Recovery and Insolvency Practitioners Association of Nigeria (BRIPAN); the Nigerian Association of Small and Medium Enterprises (NASME); Lagos Chamber of Commerce and Industry (LCCI) and several professional firms. Azinge expressed optimism that the b would receive the assent of the President very soon, stressing the commitment of the commission to double its efforts of registering more businesses from now on compared to the three million figure recorded since inception. It would be recalled that the bill originated from and was passed by the Senate on Tuesday, May 15, 2018. Source: The sun

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Lagos, taxation and economic development

TAX SERVICES / Tobi Aminu

SEVERAL years ago, fourth President of the United States of America, James Madison said that the power of taxing people and their property is essential to the very existence of government. Similarly, Franklin D. Roosevelt, the only US President to serve three terms also underscored the importance of tax when he asserted that: “Taxes, after all, are dues that we pay for the privileges of membership in an organised society.” Roosevelt relied on taxes, particularly from rich taxpayers, to fund programmes designed to pull the country out of the Great Depression. The various New Deal revenue acts in the mid-1930s substantially boosted the tax burden on the wealthy, raising the effective income tax rate on the top one per cent from 6.8 per cent in 1932 to 15.7 per cent in 1937. Scholars of development economics have written a lot on the issue of taxation and its import to economic development. Amidst the penumbrae of arguments, the central tendency is that taxation is the price people pay for government services. Most often, because of the inherent tendency of people to resist payment of tax for essential services, taxes are compulsory payments individuals make to government. Tax The element of coercion is justifiable in that legitimate government activities can hardly be carried out without fiscal resources. These activities include defense, protection of life, property and individual liberty – which are fundamental rights enshrined in the Nigerian Constitution. Irrespective of the school of thought one belongs, one is doubtless bound to contribute a certain portion of his income to government for the provision of essential social services. Similarly, it is the duty of government to apply such monies in the most efficient way to improve the living standards of the people. Since the return of democratic dispensation in 1999, successive administrations in Lagos State have had to contend with the knotty issue of attempting to boost the State Internally Generated Revenue, IGR, through the implementation of a viable and sustainable tax system. With about N600 million in 1999, when Asiwaju Bola Tinubu took over, the IGR rose to between N10 billion and N11 billion by 2007 when he left office. With continuing reforms in the internal revenue system, aggressive tax drive, capacity building and professionalism of the Lagos Internal Revenue Service, LIRS, the IGR of the state had by 2015 when Mr. Babatunde Fashola, SAN, left office, risen to about N23 billion monthly. What has been the secret of Lagos’s economic growth under the current administration is a revenue enhancement reform which has achieved higher IGR and providing a sustainable financial base for bridging the huge infrastructure deficit estimated at over US$50bn. Implementation of financial policy such as widening of the State tax net, expansion of tax base, updating/upgrading of databases, improvement of administrative processes and operational efficiencies, among others has so far achieved an average monthly IGR of N34 billion in 2018 compared to monthly averages of the last three years. It could be recalled that in just two and half years, the Lagos Government constructed Abule-Egba and Ajah bridges among several other capital projects. There is vast empirical evidence that taxation correlates highly with economic growth in addition to some spill-over effect on effective service delivery. Lagos is a good example for research work in this direction. At the global level, no economy in history has ever achieved high per capital growth without a sustainable tax system. In fact the advanced capitalist economies depend heavily on taxation in running their economies. In Europe, U.S.A and Latin America, tax evasion is a punishable offence without the option of fine. The global economic power of Japan is Personal Income Tax. Taxes available to state governments to collect from the citizens across the country include: Personal Income Tax in form of Pay-As-You-Earn, PAYE, or Direct Taxation (Self-Assessment), withholding Tax (Individuals Only), Capital Gains Tax (Individuals Only), Stamp Duties on instrument executed by individuals, Pools Betting, Lotteries Gaming and Casino Taxes, Road Taxes, Business premises registration fee in respect of urban and rural areas which includes registration fees and per annum for the renewals as fixed by each state, Development Levy (individuals only) not more than 100 per annum on all taxable individuals and Naming of street registration fees in the State Capital. Other classification of taxes are: Right of Occupancy fees on lands owned by the State Government in urban areas of the State, Market Taxes and Levies where State finance is involved, Land Use Charge, where applicable, Entertainment Tax, where applicable, Environmental (Ecological) fee or levy, Hotel, Restaurant or Event Centre Consumption Tax, where applicable, Signage and Mobile Advertisement, jointly collected by the State and Local Government among others. It is, thus, surprising that today many states and local governments still give the impression that their entire operations depend on the statutory Federal allocation. It is an aberration that even the Federal Government still depends heavily on oil. In Lagos, the impacts of enhanced revenue base in development strides in the state are quite visible to all. For instance, in 2016 alone, the state government commissioned 114 roads across the state while another 181 roads were built in 2017. In the health sector, 14 additional LASAMBUS operational points were created while 26 new ambulances for General Hospitals and LASUTH as well as 20 new Mobile Intensive Care Units were inaugurated. With a view to bridging the housing deficit gap in the state, between February and April 2017, 500 lucky beneficiaries of the Rent-To-Own Housing Scheme were presented with keys to their home. Similarly, numerous giant strides have been made in education, sports, transportation, food security, tourism among others. Governments across the country need to borrow a leaf from Lagos State and be committed to expanding their tax net, updating/upgrading of databases, improvement of administrative processes and operational efficiencies of their tax agencies. Source: Guardian

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LIRS Extends The Deadline For Filing 2018 PAYE Returns

Tax news, TAX SERVICES / Tobi Aminu

The Lagos State Internal Revenue Service (LIRS) has extended the statutory deadline for employers to file their annual Pay-As-You-Earn (PAYE) tax returns by six working days from 31 January 2019 to Friday 8 February 2019. The extension became necessary to accommodate the significantly high number of taxpayers who are yet to file their PAYE tax returns through the designated online channel due to glitches on the platform. The LIRS also announced that, with effect from Monday 4 February 2019, it will establish an alternative platform for taxpayers who have high volume of tax returns to file. Employers who are yet to file their PAYE tax returns to the LIRS should, therefore, take advantage of the extended window to comply, and promptly escalate any further teething problem with the e-filing platform to the LIRS. Source: Proshare

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FIRS urges SMEs to pay taxes

Tax news / Tobi Aminu

The Federal Inland Revenue Service (FIRS) on Saturday urged Small and Medium Enterprises (SMEs) to pay taxes to attract investors. FIRS Deputy Director, Mrs Angel Fadahunsi, made the appeal at the Techpoint Build expo held in Lagos. The News Agency of Nigeria (NAN) reports that Techpoint Build is a conference and exhibition that connects startups and SME community with industries, bringing together people from across Nigeria and neighbouring countries. According to her, taxes are collected from business owners to sustain the nation and to provide amenities that will enhance both lives and businesses. “SMEs need to pay taxes, firstly because it is the law, needed for the development of the nation, provision of social amenities like road, hospital, taxes are needed to sustain these things. “Lots of SMEs are looking for investors that will invest in their business but an investor will only invest in businesses that pays tax to avoid being shut down,” she said. Fadahunsi also adviced the SMEs that in planning for their business, they needed to factor paying of bills like taxes into it. She said that complaining that taxes paid were too much was not the case as tax payment whether with the federal, state or local government was essential to avoid business closure. She listed some basic steps that would guide the SMEs as to first register the business immediately to get the Tax Identification Number (TIN) which she added was free. She urged them to keep proper records of their business expenses as much as possible , so that when they start making profit, they would be able to make the right tax payment. She pointed out that the Value Added Tax goes with goods and services and grace period was not attached to it, adding that once profit was made, tax was required. “Tax is laid on profit between 20 to 30 per cent and that is why proper business records is required. “If the business did not make any profit in a year, it behoves the owner to file the returns so that the FIRS will know,” she said. Also Mrs Kemi Balogun, Team Lead, Tech and Service Partnership, AXA Mansard Insurance PLC., said that insuring businesses was to protect it from unforseen events. According to her, an SME is not expected to have so much money to put, so when one sets up their business, the first insurance policy to do has to do with the persons and employees health. “Insurance is affordable for an SME and is key to making the business stand against all odds. “Having good health is paramount and you cannot run your business well if you are sick, so the need to insure against accident and others. “The next is insuring the equipment and structure, the assets that so much money was put in to start the business against theft, flood, fire and others,” she said. Source: Guardian

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Reps approve N30,000 new minimum wage

Uncategorized / Tobi Aminu

The House of Representatives has approved the sum of N30,000 as the new national minimum wage. The approval followed the adoption of the report by the ad hoc committee set up on the New Minimum Wage Bill presented to the National Assembly by President Muhammadu Buhari on Thursday. Passing the bill for the third reading on Tuesday, the lawmakers unanimously approved the N30,000 recommendation by the committee in consonance with the resolution by the tripartite committee set up by the President. Buhari had in the executive bill sought the approval of N27,000 as against the N30,000 agreed by the stakeholders. Dogara said, “Today, we passed the new national minimum wage Bill 2019 in keeping with our commitment to improve the welfare of the Nigerian workers. “The Bill was given speedy and accelerated passage in just two legislative days as a House of the Nigerian people.” The ad hoc committee had recommended and adopted N30,000 minimum wage. According to the bill, any employer who fails to comply shall be liable to a fine not exceeding five per cent of the offenders’ monthly wage. The House resolved in the Committee of the Whole to consider the report. It resumed with the synopsis of the bill. According to the chairman of the Committee, Mr. Yussuff Lasun, the bill did not cover employers whose staff strength is below 25. Raising a point of order, the House Majority Leader, Mr. Femi Gbajabiamila, was of the opinion that the bill should take effect from six months after assent. On the contrary, the lawmakers moved that the bill should take immediate effect as soon as the President signs it into law. But the Speaker held a different opinion, noting that with the absence of appropriation, the bill could not be implemented. To save the House from further debate, the Chairman House Committee on Rules and Business, Edward Pwajok, moved for an amendment to include that the bill becomes effective from the date it is assented to. The bill, therefore, passed third reading on the floor of the House. The House is to harmonise with its counterparts in the Senate for onward transmission to the President for his assent. Source: Punch

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Federal High Court Rules Against Income Tax Assessment Based on the Value of a Property

Tax news / Tobi Aminu

The Federal High Court (FHC) sitting in Abuja recently gave a judgement in favour of Theodak Nigeria Limited (TNL or “the Company” or “the plaintiff”) in its lawsuit against the Federal Inland Revenue Service (FIRS or “the defendant”). The issue for determination was whether the FIRS had statutory power to deem the value of the Company’s property to be its turnover for any year of assessment (and impose income tax thereon) based on the provision of Section 30 of the Companies Income Tax (CIT) Act, Cap. C21, Laws of the Federation of Nigeria (LFN), 2004. Background The Federal High Court (FHC) sitting in Abuja recently gave a judgement in favour of Theodak Nigeria Limited (TNL or “the Company” or “the plaintiff”) in its lawsuit against the Federal Inland Revenue Service (FIRS or “the defendant”). The issue for determination was whether the FIRS had statutory power to deem the value of the Company’s property to be its turnover for any year of assessment (and impose income tax thereon) based on the provision of Section 30 of the Companies Income Tax (CIT) Act, Cap. C21, Laws of the Federation of Nigeria (LFN), 2004. Background Generally, CIT is payable on the profits of a company “accruing in, derived from, brought into or received in Nigeria1” in respect of any trade or business that may have been carried on. The CIT Act requires every company to file its tax returns for every year on a self-assessment basis, containing the amounts of profits from every source, with the FIRS. Section 30 of CIT Act empowers the FIRS to assess a company on a fair and reasonable percentage of the turnover from its trade or business where either the business produces no assessable profits; where the assessable profits are less than might be expected to be, or where the true assessable profits cannot be ascertained. Facts of the case and issues for determination The FIRS alleged that the Company did not file its income tax returns for 2015 and thereby failed to pay its income tax liability for that year. Hence, the FIRS invoked the provisions of Section 30(1)(a) of the CIT Act by deeming 20% of the ascertained value of a property admitted to be owned by the Company to be the CIT payable, and issued its assessment notice for the amount. Dissatisfied with the FIRS’ action, TNL filed an appeal at the FHC arguing that: Section 30(1)(a) of the CIT Act does not empower the FIRS to assess the value of its property to CIT the foregoing CIT Act provision provides for assessments to be based on a fair percentage of the turnover of a trade or business and the value of a company’s property is not listed as taxable income in Section 9 of the CIT Act. Thus, the Company urged the FHC to declare that the value of its building was not the same as its turnover, and that the FIRS’ action was ultra vires its statutory powers under the CIT Act. Thus, the Company urged the FHC to declare that the value of its building was not the same as its turnover, and that the FIRS’ action was ultra vires its statutory powers under the CIT Act. The plaintiff also prayed the FHC to set aside the FIRS’ assessment and restrain the defendant from enforcing the recovery of the alleged tax liability. The FIRS, on its part, argued that Section 30(1)(a) of the CIT Act gave it a wide range of power to assess delinquent taxpayers to tax, and therefore had the statutory power to impose its best of judgment assessment on TNL based on the value of the Company’s property. This was on the ground that TNL had failed to file its tax returns despite several notices issued by the FIRS. The defendant also argued that the assessment was final and conclusive because the plaintiff failed to object within 30 days as provided by the CIT Act. The plaintiff also prayed the FHC to set aside the FIRS’ assessment and restrain the defendant from enforcing the recovery of the alleged tax liability. The FIRS, on its part, argued that Section 30(1)(a) of the CIT Act gave it a wide range of power to assess delinquent taxpayers to tax, and therefore had the statutory power to impose its best of judgment assessment on TNL based on the value of the Company’s property. This was on the ground that TNL had failed to file its tax returns despite several notices issued by the FIRS. The defendant also argued that the assessment was final and conclusive because the plaintiff failed to object within 30 days as provided by the CIT Act. Decision After considering the arguments of both parties, the FHC held that: The FIRS did not act within the boundaries of Section 30(1) of the CITA in assessing the Company to tax on the basis of the value of its property. Section 30 only empowers the FIRS to assess a company to tax on a fair and reasonable percentage of its turnover, and that turnover refers to the aggregate income that a business receives from its normal business activities for a given period, usually from the sale of goods and services. Hence, the value of the Company’s property is not the same as its turnover or income. It would be unfair to deem the value of the Company’s property as its turnover for the year of assessment, and the FIRS’ act of unilaterally assessing the value of the Company’s property was oppressive and ultra vires. The Company was not under any obligation to object to the FIRS before it could challenge the assessment in court. The use of the word “may” in Section 69(1) of the CIT Act makes it discretionary for the plaintiff to object to the FIRS’ assessment, and failing which the Company could not be denied the right of access to court as conferred by the 1999 Constitution of the Federal Republic of

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NGO Sues Federal Internal Revenue Service Over Sponsorship of Entertainment Concerts

Leave a Comment / CAC SERVICES / Tobi Aminu

The Laws and Rights Awareness Initiative has, through its trustees, brought an action against the Federal Inland Revenue Service (FIRS) at the Abuja Division of the Federal High Court. In the suit, the Laws and Rights Awareness Initiative is challenging the power of the FIRS to provide commercial sponsorship or support to entertainment concerts and shows. In the originating summons filed by their counsel, Olumide Babalola and Mofesomo Tayo-Oyetibo. The Initiative alleges that the FIRS has been sponsoring and supporting entertainment events and concerts such as the Festival of Lights, Davido Live in Concert and King Coal in Concert when it has no power to do so under the Federal Inland Revenue Service Act, as a result of which it has acted beyond the scope of its powers under the Act. The reliefs sought in the Originating Summons include a declaration of the Federal High Court that it is ultra vires the FIRS and unlawful for it to defray any money towards the sponsorship or any other form of support howsoever called, of concerts, entertainment shows or any other event howsoever called, which are not stipulated as part of the statutory expenditure of the FIRS under section 16 of the Federal Inland Revenue Service Act. The Initiative also seeks an Order of injunction restraining the FIRS from defraying any amount towards any event not mentioned in section 16 of the Act or any other Act of the National Assembly. The FIRS is yet to file a defence to the action. Source: Guardian

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CAC Approves Name for Edubox International Foundation

Leave a Comment / CAC SERVICES / Tobi Aminu

The Corporate Affairs Commission (CAC) has approved the name for non-governmental organisation called Edubox International Foundation. Founder of the foundation, Tosin Sanusi said the aim of the NGO is to help position Nigerian students and youths to become relevant to the country and the entire world by supporting their academics and empowering them with the requisite skills needed for national growth. “We hope the NGO will ensure students further their education without financial constraints and also serve as a centre for skills acquisition for youth,” Sanusi said. Sanusi further noted that the foundation would provide a platform of sponsorship for destitute students who are intelligent and can’t afford education. According to him, the proposed trustees for the foundation shall be Mr. Kelvin David; Mr. Sanusi Tosin Moses; Igwe Hephzibah Adaeze; Nwaigwe Marilyn Chinwe; Joshua Christian Amuzie and Mr. Hassan Ahmed Adekunle. Meanwhile, the CAC said technology has played a pivotal role in streamlining the inter agency partnerships between them and other government agencies. The Acting Registrar-General of the commission, Azuka Azinge, told stakeholders in Abuja at the Technology As A Catalyst: Ease of Doing Business 2018 Conference. Azuka Azinge, Acting Registrar General, Corporate Affairs Commission (CAC), extol the benefits of using technology in running the commission. According to her, technology has made it possible for applicants to do their company registration online without coming to CAC office. “Technology has made it possible for the commission to run 24 hours registration, which they were not doing before and online payment is now available at the commission because of technology. Technology has changed the face of how we do business now,” Azinge noted. Source: Pulse

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