Tax news

G20 policymakers vowed Sunday to “redouble” their bid to reform by the end of next year the international tax system to take account of internet giants such as Facebook and Google. Speaking about international taxation, the G20 finance ministers and central bank governors said in a statement seen by AFP: “We will redouble our efforts for a consensus-based solution with a final report by 2020.” However, here again, the Fukuoka meeting exposed a difference of opinion over what form this reform should take. Frustrated by a lack of global action on the issue, some countries such as Britain and France have already introduced a so-called digital tax, but Mnuchin was blunt in his assessment of these policies. “I would say the US has significant concerns with the two current taxes that are being proposed by France and the UK but let me give them some good credit for proposing them in the sense (that) they have created an urgency to deal with this issue,” US Treasury Secretary Steven Mnuchin said at a public meeting before the formal G20 started. “Although I don’t like them, I do appreciate the impetus for these issues,” added the top US finance official. Appropriately for a meeting held in Japan — which is on track to become the world’s first “super-aged” society in which more than 28 percent of the population is over 65 — the G20 ministers discussed for the first time the “challenges and opportunities” posed by ageing. They suggested getting more women and elderly people into the workforce and “promoting elderly-friendly industries”, as well as reforming the fiscal and banking systems to take into account ageing populations. “You basically have a very large portion of mankind that is ageing and then the workforce is shrinking,” OECD Secretary-General Angel Gurria told AFP in an interview. Solving the issue will require wholesale changes to the way society is organised, added Gurria.   Source: Punch

The Lagos State Internal Revenue Service (LIRS) issued a Public Notice on 4 June 2019 informing taxpayers of its intention to integrate the existing Taxpayers Identification Digit (PID) into the nationwide Tax Identification Number (TIN) system with the Joint Tax Board. The LIRS intends to leverage the existing Bank Verification Number (BVN) operations to achieve this objective. Consequently, access to LIRS electronic platform for all transactions, such as registration and creation of Payer ID for new taxpayers, payment of taxes and validation of taxpayers’ profile will compulsorily require BVN validation. The Public Notice further requires every self-employed individual to provide their BVN to the LIRS for creation of their unique PID, while corporate organisations are to ensure that their employees provide their BVNs for processing of their tax clearance certificates (TCCs). Matters arising  The BVN is a very sensitive confidential information which is personal to individual bank customers. The operation of BVN in Nigeria is regulated by the Central Bank of Nigeria (CBN) through the Regulatory Framework for Bank Verification Number Operations and Watch-list for the Nigerian Financial System (“the Framework”). The CBN recognizes the importance of protecting bank customers’ data and has made access to BVN information by any party subject to a valid court order and its approval. This implies that access to BVN information is restricted and will only be conditionally released on case-by-case basis. While the Personal Income Tax (PIT) Act (as amended) empowers relevant tax authorities to request taxpayers to provide books, documents and information for the purpose of establishing their income or gain earned, the power must be carefully exercised especially where sensitive personal information, such as BVN is involved. This is necessary to avoid security risks to taxpayers. Hence, such power should not be interpreted to grant unfettered access to sensitive taxpayer’s data, such as BVN, except in the event of criminal investigation. While the data integration exercise by the LIRS may be desirable, the question is whether a BVN is necessarily required for the exercise. There is no question that a TIN can be issued without BVN and if personal identification is required at all for TIN to be issued, there are other less invasive means of identification, such as national identity card, driver licence, international passport, etc., that can be used for this purpose. The LIRS should be happy to see new taxpayers register for tax purpose upon presenting any valid identity card rather than introducing another layer of requirement for this purpose. The less the hurdles taxpayers have to cross the better. It is instructive that the Federal Inland Revenue Service has successfully registered several companies for tax purpose and issued TIN to them without requiring the BVNs of their directors. The LIRS should take a cue from this. The LIRS’ requirement for provision of BVN before taxpayers can be issued TCCs, when a TCC is only a confirmation of tax paid by a taxpayer is very concerning, especially after a taxpayer has discharged his civic duty. There is no reason to put another constraint on taxpayers when they should be given the freedom to print the document online as and when required. In the final analysis, as taxpayers may not have a choice but oblige the LIRS, it is important for the LIRS to put foolproof measures in place to ensure data privacy and protection of taxpayers.   Source: Pro share 

The Tax Club, University of Lagos clinched the first (1st) prize at the 2019 National Tax Quiz Competition held at the recently concluded Annual Tax Conference organized by the Chartered Institute of Taxation of Nigeria in Kado, Abuja. The Competition was an integral part of the Conference which was held between April 23 and 26, 2019, About 200 undergraduates from across Nigeria participated in the Competition. Out of these, six finalists were selected through a Four Stage Computer Based Test on different areas of Taxation. The Conference came to a crescendo with Orimijupa Olukunle David of the Faculty of Law, University of Lagos emerging winner of the Quiz Competition. The Vice Chancellor, Professor Oluwatoyin T. Ogundipe, FAS, on behalf of Management, Senate, staff, students and other members of the University community congratulates Orimijupa Olukunle David and members of the Tax Club, University of Lagos on this feat.   Source: Unilag

Top G20 finance officials agreed Saturday there was an urgent need to find a global system to tax internet giants such as Google, Facebook, Amazon and Apple, but clashed on the best way to do it. The G20 has tasked the Organisation for Economic Cooperation and Development to fix an international tax system that has seen some internet heavyweights take advantage of low-tax jurisdictions in places like Ireland and pay next to nothing in other countries where they make huge profits. OECD chief Angel Gurria presented G20 finance ministers and central bank chiefs meeting over the weekend in the western Japanese city of Fukuoka with a “roadmap”, already signed off by 129 countries, in a bid to clinch a long-term solution by 2020. “We have to hurry up,” stressed French Finance Minister Bruno Le Maire during a panel discussion of top policymakers before the G20 meeting officially opened. Le Maire called for a more ambitious timeframe to forge a global consensus, saying: “The right schedule is to find a compromise by the end of this year.” British finance minister Philip Hammond said taxing internet giants fairly was a response to something that is “perceived by our population to be a gross injustice in our tax system.” Ministers are weighing a new tax policy based on the amount of business a company does in a country, not where it is headquartered. But there are rival proposals in the mix, including a wider US-led approach that could affect European and Asian multinationals in other sectors than technology. US Treasury Secretary Steven Mnuchin took a blunt view of policies in Britain and France, which have already introduced their own taxes on digital players, given a lack of global consensus. “I would say the US has significant concerns with the two current taxes that are being proposed by France and the UK but let me give them some good credit for proposing them in the sense (that) they have created an urgency to deal with this issue,” said Mnuchin. “Although I don’t like them, I do appreciate the impetus for these issues,” added the top US finance official.   Source: PM News Nigeria

An Igbosere High Court, Lagos State, on Thursday fixed October 10 for the trial of a Nollywood actress, Monalisa Chinda-Coker, over alleged tax evasion.  The News Agency of Nigeria reports that trial was earlier fixed for June 5, but could not hold due to the Eid-el-Fitr holiday. At the resumed hearing on Thursday, the court fixed October 10 as the new date for trial. Chinda-Coker is facing two charges of failure to file annual tax returns and failure to pay income tax in respect of her company, Monalisa Code Productions. The alleged offences contravened Section 94(1) of the Personal Income Tax Act 2004 (as amended) and Section 56 of the Lagos State Revenue Administrative Law of 2006.   Source: Punch

The Lagos Chamber of Commerce and Industry has faulted the renewed tax drive in the Nigerian economy, saying that it was focused more on investors than consumers. The chamber stated this in a document setting economic diversification agenda for the Federal Government on Sunday. In the document signed by the Director General, LCCI, Mr MudaYusuf, the chamber stated, “The Federal Inland Revenue Service has scant regard for due process in its drive for revenue.   It is, therefore, inherently a disincentive to investment and economic diversification. “The three tiers of government target investors more than consumers.  This is not in consonance with best practice principles in taxation.” In an economy which is almost 50 per cent informal, the taxation structure is not investment-friendly, the chamber maintained, recommending that the tax structure should be reversed to aid economic diversification. Yusuf faulted the use of banks as collection agents for the FIRS, noting that it was very disruptive, distracting, arbitrary, oppressive and unfair to investors. The LCCI insisted that such practice was a serious disincentive to investment and the promotion of financial inclusion. “This approach should be discontinued. Taxation should not be seen only as an instrument of revenue generation; it is also a potent instrument for stimulation of investment,” he said. The chamber stressed that for there to be a sustainable economic diversification, the government needed to get the policies, institutions and infrastructure right and ensure they were properly aligned. It added that the policy mix must be right for the desired outcomes to be achieved. He advised the Central Bank of Nigeria to moderate its monetary tightening stance adding that this would moderate interest rate and also drive domestic investment. He said, “It is difficult to drive domestic investment at current levels of interest rate which is well over 25 per cent for most economic players.  The economy needs investment, especially domestic direct investment to drive diversification.” He advised against a foreign exchange regime that  ‘perpetuates a rent economy’, saying that it created opportunities for arbitrage, corruption, resource misallocation, impeded the inflow of investment, and created transparency issues in the allocation of forex. “The current multiplicity of rates is inimical to sustainable economic diversification,” he pointed out. The chamber advised that trade policies that determine exports and imports should be guided by sect oral competitive and comparative advantage. “Institutional capacity to enforce the policies should also be considered in trade policy formulation. The Nigeria Customs Service needs to demonstrate better sensitivity to the plight of investors. “One of the biggest headaches of the business community is the Nigeria Customs Service.  Policies should be focused on incentivizing resource-based industries which typically have a competitive advantage and good impact on the economy because of the high multiplier effect.  The relativity of tariffs between Nigeria and the neighboring countries should also be considered in the formulation of trade policy.” Yusuf advised that procurement policy should be structured to favor sectors that had the potential to be diversification champions as well as leading backward integration firms. He advised government agencies to facilitate investment growth rather than see themselves as revenue generating organs.   Source: Punch