Tax news

Investors and dealers are now required to pay Value-Added Tax (VAT) for transactions carried out on the Nigerian Stock Exchange (NSE), following the expiration of a five-year exemption. The previous order on exemption of the tax was enforced by former Finance Minister, Ngozi Okonjo-Iweala. During her tenure, the minister exempted VAT deductions from commissions earned on the traded value of shares, commissions payable to the Securities and Exchange Commission (SEC), and commissions payable to the Central Securities Clearing System (CSCS).  The move to exempt VAT at that time was aimed at reducing the cost of transactions for investors and to encourage investments in the Nigerian capital market. The five-year exemption became effective on Friday, July 25, 2014, and thus ceased on Wednesday, July 24, 2019. In a circular issued by the Nigerian Stock Exchange (NSE), Head of Broker-Dealer Regulation, Olufemi Shobanjo, stated that barring any further extensions from the federal government, VAT was to be charged on all commissions applicable to capital market transactions effective July 25, 2019. Thus, dealing members are required to resume the deduction of VAT on commissions earned.  Specifically, the commissions on which the tax is applicable include those earned by dealers on traded values of shares as well as those payable to the NSE and CSCS. Also, the exchange revealed that CSCS would automate the deduction of VAT charged. Consequently, dealing members are to engage their software vendors for the automation of VAT deductions. Furthermore, the NSE directed all dealing members to ensure that the VAT charged on the commissions earned are remitted to the Federal Inland Revenue Service (FIRS) as and at when due; and that the corresponding evidence of remittance is retained for future reference. A Value-Added Tax is an indirect tax which is borne by the final consumer. In relation to capital market transactions, any VAT charged on commissions is passed on to issuers and investors, as the case may be.  With the expiry of the exemption, it is expected that capital market transaction costs for retail investors, stockbrokers and institutions will rise. The development also means an increase in compliance costs for operators such as stockbrokers and the regulators in accounting and remitting VAT to the FIRS.   Source: Ventures Africa

The acting Chairman of the Manufacturers Association of Nigeria, Nasarawa State chapter, Mr Alfred Alogana, has expressed the body’s displeasure over the unfavourable tax regime in the state. He made special reference to the Gaseous Emission Tax, which manufacturers and producers of goods are subjected to by various agencies of the state government. Alogana stated these in an interview with Northern City News in Lafia on Thursday. According to him, the tax in question is outrageous and is adversely affecting the capacity of local manufacturers in the state. He said, “We asked what the Gaseous Emission Tax was all about and they said the generators we use for our business emit gas, which is poisonous, and so we were to pay for it. “We then asked if they were going to clean the gas from the atmosphere, but they could not explain anything, and they still went ahead to enforce the payment. “I don’t really know what they are after; they brought notices to us that we have to pay for gaseous emission. They force us to pay huge amounts. In their letter, it is N24,000 per producer per year.” “I don’t see legality of this. I don’t see anything good in it because it is the government that is supposed to supply electricity, but it is not doing it. So for somebody to get a generator to help himself to do what he is doing and contribute his quota to the state and be charged for it is unfair.” According to him, the Nasarawa State Government, through the state Ministry of Environment and Solid Minerals, has been compelling local manufacturers and producers in the state to pay this tax since 2018. He appealed to the state government to take another look at the tax, because manufacturers in the state were already overburdened by the problems of poor infrastructure, multiple taxation and a harsh business environment. When contacted, the Permanent Secretary, Ministry of Environment and Solid Minerals, Mallam Usman Abu, confirmed the introduction of the Gas Emission Tax, which he said was backed by legal notice No. 6 enacted in 2018.   Source: Punch

The re-introduction of Value Added Tax charges on transactions in the Nigerian capital market takes effect from today, July 25, 2019. The VAT charges on transactions in the capital market were suspended in 2014 by the then Minister of Finance, Dr Ngozi Okonjo-Iweala, to encourage increased trading activities in the market. Okonjo-Iweala had set up a committee to revive activities on the Nigerian Stock Exchange, following the financial crisis and extended periods of negative market sentiments recorded on the bourse in previous years. The committee reached a decision to waive the 0.075 per cent stamp duties payable on stock exchange transaction fees and exempt from VAT commissions earned on traded values of shares, commissions payable to the Securities and Exchange Commission and commissions payable to the Nigerian Stock Exchange, the Central Securities Clearing System and the NASD OTC Securities Exchange. While stakeholders in the capital market have called for an extension of the waiver period, the NSE and the NASD are set to resume deduction of VAT on commissions applicable to capital market transactions referred, while awaiting further directives emanating from ongoing engagements with the Federal Government on the issue. The NASD said, “We shall notify the market of any new developments, but in the absence of none, kindly take this as a notice to resume deduction of VAT on commissions applicable as this will ensure a smoother and more transparent OTC market.”   Source: Investor king

Oxfam in Nigeria has called on the federal government to fast-track action on the approved new National Tax Policy in order to tackle corporate crimes. Oxfam Country Director, Constant Tchona, made the call in Abuja at the public unveiling of the ‘Fair Tax Index report and the Commitment to Reducing Inequality Index (CRII)’ report, with the theme ‘West Africa Inequality Crisis: The Fight Against Inequality through Progressive Taxation’ in Abuja. He said Oxfam had developed policy recommendations and strategies, saying it would be used to advocate for a fairer tax system that helps to redistribute prosperity from the richest in the society to the very poorest. Tchona, explained that a 2015 Oxfam’s report highlighted the inefficiency of Nigeria’s tax incentives where it submitted that the country loses N580 billion annually through tax incentives to multinational corporations. To put this in perspective, he noted that the health budget was only one third of this amount in 2015. The country director added that Nigeria needs to rework its strategies and sets its economic priorities right by investing in agriculture, manufacturing and infrastructure rather than waste its hard-earned resources on unproductive and redundant tax incentives. Tchona explained further that the official Federal Inland Revenue Services (FIRS) numbers suggest that the entire tax system was fraught with crippling challenges of weak enforcement, corruption and outright evasion. According to him, “The records show that about 30 per cent of companies in Nigeria are involved in tax evasion and also 25 per cent of registered companies in the country are not paying tax. “Taxpayers often opt to negotiate with corruption tax administration staff in return for gratifications and reduced sums to the coffers of the government.” Tchona said the fiscal incentives granted with the hope of stimulating investments into the country’s economy were eroded with poor governance and lack of transparency, especially when the central bank had confirmed that there was no cost benefit analysis to justify the exemptions and when there was no check in discretionary powers residing with the Executive in granting exemptions. He stressed that the Voluntary Assets and Income Declaration Scheme (VAIDS) was designed to increase tax revenue by encouraging voluntary disclosure of any previously undisclosed income liable for tax and to bring as many people as possible into the tax net. This, he said resulted in $5 million extra revenue which was about N1.8 billion, but this was only 10 per cent of the expected amount. Tchona, however, called on the federal government to opt for aggressive taxation of the informal sector in order to meet the revenue target. “There is need for the Nigerian government to fast-forward action on the New National Tax Policy approved and clamp down on corporate crimes. “New legislation and rules to cope with current realities should be enacted along with introduction of cutting edge technology. “The National Assembly should enact a law to punish enablers of tax evasion such as lawyers, accountants and bankers and should be made to face fines of up to 100 per cent of tax evaded. “The National Assembly should enact law that will criminalise totally the actions of middlemen- banks, auditors and lawyers that facilitate illicit financial flows. When such professionals act contrary to existing regulations, they should be held accountable in Nigeria. “This can be enforced through strengthened professional association bodies.” While presenting his paper on, ‘Understanding the Impact of Inequality in Nigeria and Policy Recommendations,’ the Country Director of Plan International Nigeria, Dr. Husseini Abdul, said tax was not only about income for government, but one of the best way to tackle inequality According to him, “We can’t have conversation about the development of this country without talking about inequality. The trajectory of development is a problem and economic policies are needed to deal with them.”   Source; Investor king

Chairman of the Joint Tax Board (JTB), Mr. Babatunde Fowler, has stated that the Tax Identification Number (TIN) Registration System and Consolidated National Taxpayers Database introduced by the JTB will improve the efficiency and output of the entire tax administration process and provide convenience to taxpayers and tax authorities. (From Left): Mr. Tunde Fowler, Chairman, Joint Tax Board (JTB) and Federal Inland Revenue Service; Lagos State governor, Mr. Babajide Sanwo-olu; Sir Oseni Elamah, Executive Secretary, Joint Tax Board; and Mr. Amidele Zubair; Executive Chairman, Lagos State Inland Revenue Service at the South-west Flag-off ceremony of the new JTB Tax Identification Number Registration System in Lagos on Thursday. Fowler, who is also the Chairman of the Federal Inland Revenue Service (FIRS) stated this in Lagos on Thursday during the South-west Flag-off ceremony of the new system, which was launched in Abuja on 1 July. According to the JTB Chairman, the new system will ensure that taxpayers’ information are available whenever and wherever they need them. The system, said Fowler, possesses the capability to integrate with relevant agencies and leverage on already captured data, deploy analytics to discover underlying and correlating trends and patterns that could lead to increased Internally Generated Revenue (IGR) for all tiers of government. These agencies, he added, include the Corporate Affairs Commission (CAC), Nigeria Customs Service (NCS), Nigeria Immigration Service (NIS), Federal Road Safety Commission (FRSC), Central Bank of Nigeria (CBN) and the Nigeria Inter-Bank Settlement System (NIBSS), Nigeria Identity Management Commission (NIMC) and Nigerian Communications Commission (NCC), “This would significantly reduce the burden of manual taxpayer information management and by extension grossly crash the cost of collection”. “The system is designed in such a manner that each taxpayer is assigned a unique and universal Taxpayer Identification Number (TIN) and it is now possible for any taxpayer to view, retrieve or update his/her tax profile from anywhere 24/7,” said the JTB boss. The new TIN Registration System and its consolidated database of individual and corporate taxpayers’ have been designed to form the foundation upon which the nation’s automated tax administration system is built. In his opening remarks at the event, Executive Secretary, JTB, Sir Oseni Elamah, said the new system is a web-based solution that offers access to authorized users to initiate TIN request from the comfort of their homes/offices real-time online, verify their tax status and print their TIN certificate. “It is a transparent system that assures timely and accurate collection and recording of basic identification data. “It also permits the tax administrator to understand its taxpayer base for effective revenue projections and other planning activities. “By leveraging on existing data from relevant identity management agencies, the new System reduces the burden of multiple registration of taxpayers as well as promoting the ease of doing business and paying taxes. “It also ensures seamless integration and exchange of information amongst the various tax authorities within and outside Nigeria, as well as with other authorized stakeholders via web service,” he explained. Chief host of the ceremony, Mr. Babajide Sanwo-olu, Governor of Lagos State, commended the JTB for initiating the new system, which he said will take tax administration to the next level. Also in attendance was Mr. Dapo Okubadejo, Chief Economic Adviser to the Ogun State government, who represented Governor Dapo Abiodun of Ogun State.   Source: ameh news

Fowler made this known on Thursday during a speech at the south-west flag-off ceremony of the new Tax Identification Number (TIN) Registration System and Consolidated National Taxpayers Database. The website, which was first launched in Abuja on July 1, allows users to register and get their tax identification numbers (TIN) online. According to the JTB Chairman, the new system will ensure that taxpayers’ information is available whenever and wherever they need them. The system, said Fowler, will integrate data already captured by other relevant agencies, deploy analytics to discover underlying and correlating trends and patterns that could lead to increased internally generated revenue (IGR) for all tiers of government. He listed the agencies to include the Corporate Affairs Commission (CAC), Nigeria Customs Service (NCS), Nigeria Immigration Service (NIS), Federal Road Safety Commission (FRSC), Central Bank of Nigeria (CBN) and the Nigeria Inter-Bank Settlement System (NIBSS), Nigeria Identity Management Commission (NIMC) and Nigerian Communications Commission (NCC). “This would significantly reduce the burden of manual taxpayer information management and by extension grossly crash the cost of collection,” he said. “The system is designed in such a manner that each taxpayer is assigned a unique and universal Taxpayer Identification Number (TIN) and it is now possible for any taxpayer to view, retrieve or update his/her tax profile from anywhere 24/7. In his opening remarks, Oseni Elamah, executive secretary of the JTB, said the new system is a web-based solution that offers access to authorized users to initiate TIN request from the comfort of their homes/offices real-time online, verify their tax status and print their TIN certificate. “It is a transparent system that assures timely and accurate collection and recording of basic identification data,” he said. “It also permits the tax administrator to understand its taxpayer base for effective revenue projections and other planning activities. “By leveraging on existing data from relevant identity management agencies, the new system reduces the burden of multiple registrations of taxpayers as well as promoting the ease of doing business and paying taxes.”   Source: Seriousmata

An aggressive tax drive through tech-driven process will wean federating States from overdependence on federal allocations, Lagos State Governor, Mr. Babajide Sanwo-Olu, has said. Lagos, Sanwo-Olu said, understood the challenges associated with overdependence on federal handouts early enough, prompting the State to pursue an inclusive revenue generation push to achieve financial autonomy and reduce its reliance on crude oil earnings.  The Governor spoke on Thursday when he officially flagged off the new National Taxpayers Identification Number (TIN) Registration System and Consolidated National Taxpayers Database in the Southwest region. The new TIN was introduced by Joint Tax Board (JTB) – a body headed by the Executive Chairman of Federal Inland Revenue Service (FIRS), Mr. Babatunde Fowler. Sanwo-Olu said the sustenance of Lagos’ tax collection drive in the last 20 years had helped to insulate the state from the effects of decline in revenue derived from Federal Account Allocation Committee (FAAC), arising from the 2014 crash of global crude oil prices.  He said: “With improved tax revenues, governments of the federating states can begin to wean themselves from an overdependence on crude oil earnings. In Lagos, we very much understood the importance of this early enough. “The overwhelming success of our tax collection drive over the last 20 years has helped, in no small measure, to insulate Lagos from the worst effects of the decline in FAAC allocations resulting from the 2014 crash of global crude oil prices. Many other states in the federation were not as fortunate.”  To achieve improved revenue generation, the Governor said there was need to pursue efficient tax compliance among the citizens, pointing out that an improved tax collection and tax compliance drive would be a win-win policy for the government and the people. He said: “We know that as the level of tax compliance rises, citizens are more inclined to hold their governments accountable and demand a higher quality of governance and service.  “Citizens everywhere in the world are constantly seeking easier ways of engaging with their governments and fulfilling their civic responsibilities. It is the duty of governments to respond to this need by removing barriers that inhibit compliance.” How would the government achieve higher tax compliance? “It is through technology,” Sanwo-Olu declared, adding that a tech-driven process remained the vital tool that should be leveraged by the government to actualise the purpose.  He said: “This new Taxpayer Identification Number Registration System demonstrates the transformative power of technology as a significant contributor to the ease of doing business reforms, both at the national and sub-national levels. More critically, this also aligns with our agenda of leveraging technology to drive change across various economic sectors. “I believe there is still a lot of room for improvement on the progress made but this laudable initiative we are flagging off today will go a long way in bridging tax deficit by capturing eligible tax payers within the tax net.” The Governor praised the JTB and FIRS for the introduction of “a smart, innovative and technology-driven solution” in achieving higher tax compliance. Sanwo-Olu urged the media to play its role in educating the public on the importance and benefits of the new tax collection approach. Fowler, in his remark, said it was instructive Lagos was picked as suitable location for the flag-off of the new TIN Registration System in the Southwest, noting that first-ever tax transformation effort started in the state in 1999. The FIRS boss said the Southwest was the largest contributor to the tax generated in 2018 among sub-national zones. This, he said, was as a result of vibrancy in economic activities in the zone.   He said the new TIN Registration System would not only improve the efficiency of tax administration system, but would also reduce the cost and challenges associated with tax collection process. JTB Executive Secretary, Mr. Oseni Elamah, said the new registration system had addressed the challenges of multiple registrations previously experienced, adding that it had also strengthened transparency in collection process.   Source: Ecomium

Dame Gladys Simplice, Isaac Adedayo, Samuel Agbeluyi and Innocent Ohagwa have emerged in the new leadership team of the Chartered Institute of Taxation of Nigeria (CITN) with the mandate to pilot its affairs for the next two years. In a statement made available to Next Level in Lagos, the institute said while Simplice would be the leader of the team as the president and chairman of council, Adedayo would serve as vice president, with Agbeluyi and Ohagwa would function as Deputy Vice President and Honourary Treasurer, respectively. Simplice holds BSc Economics from Ahmadu Bello University, Zaria. She started her training in accountancy with A. B. Alabi & Co/Alabi Bakoh Ekundare & Co. (Chartered Accountants and Secretaries). She was thereafter employed as an assistant accountant at a private Fisheries Company, Transcontinental Fisheries Ltd in Lagos. In August 1982, she began 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. She was later given a contract appointment as Head, Channels Management of the Corporate Communication Department of FIRS in 2009. Adedayo on the other hand, acquired his professional experience from the Office of the Auditor General for the Federation (1984-1993) and the firms of Adetona Isichei & Co (Chartered Accountants) 1993–1999 and Akintola Williams Deloitte (Chartered Accountants) from 1999-2002. He is currently the Head of Practice, Adesina Adedayo & Co. (Chartered Accountants and Tax Practitioners) and the Chief Executive Officer of AIA Professional Services Limited (Business Restructuring & Organisation Development). He holds a Special Executive Masters in Leadership & Strategy from the Metropolitan School of Business and Management (UK). Also, Agbeluyi has a Higher National Diploma in Accountancy from Yaba College of Technology, Master of Science (Finance) from the Lagos State University and MBA (Marketing) from ESUT Business School, Enugu. He was in the University of Bradford, United Kingdom, where he bagged LLB in Law and graduated with BL from the Nigerian Law School in the 2012. He has worked with Jagal Group of Companies, Reals Group of Companies, Harmony Securities Ltd., among others. He is currently engaged in private practice in the areas of Tax Consultancy, Financial Consulting and Legal Advisory. Agbeluyi is the Principal Consultant, SOA Global Consulting Services. On his part, Ohagwa holds a BSc in Accounting from the University of Lagos and a Master in Business Administration from Bayero University, Kano. He was trained and qualified as a Chartered Accountant. He worked with then firm of Akintola Williams & Co Chartered Accountants, Lagos, with Century Merchant Bank Limited and Muktari Dangana & Co. Chartered Accountants, Kano before joining the Federal Inland Revenue Service. He is currently the Director, Special Tax Audit, Federal Inland Revenue Service for Lagos State.   Source: Daily trust