E-Financial
FG Plans Aggressive VAT, Other Tax Regime
Amidst on-going controversy over its rights to collection of Value Added Tax, VAT, across the country, the Federal Government is set to implement an aggressive VAT revenue drive which it expects to yield about N316 billion next year.
This forms part of the 2022 fiscal policy plan which is also reflected in the Appropriation Act presented previous week to the National Assembly by the executive arm of the government.
Under the aggressive tax revenue drive, the FG is also expecting to rake in N29.3 billion as charges from electronic money transfers, a new revenue line it hopes to implement in 2022.
The targeted VAT revenue for 2022 is 99.2 percent higher than N158.95 billion budgeted in 2021 and represents 3.12 percent contribution to the total targeted N10.13 trillion government’s revenue for the year.
Recall that the FG had in 2020 introduced various consumption taxes and increased the VAT rate to 7.5 percent from five percent in a bid to raise its revenue in the face of falling oil prices.
The revenue drive comes at a time the federal government is enmeshed in legal tussle with some states over collection and control of VAT revenue.
Presently, the FG is locked in a legal battle with the Rivers and Lagos state governments as some other states threaten to join the battle to take over VAT collection in their respective states from the FG.
However, five northern states, including Adamawa, Plateau, Kaduna, Kogi and Zamfara are set to take side with the FG in the battle against Rivers and Lagos state governments over VAT.
Besides raising the expected VAT revenue for 2022, the government also raised its target from other tax heads under the non-oil revenue tax, which include the Company Income Tax (CIT), customs revenue and the federation account levies, leading to 59.3 percent increase in the 2022 non-oil revenue (N2.132trn) budget when compared to N992.63 trillion budgeted this year.
Specifically, the government expects to raise N909.30 billion from CIT, which is a 100.07 percent increase over N454.48 billion budgeted in 2021.
Customs revenue was increased by 146.2 percent to N834.12 billion from N338.85 billion, while the federation account levies was increased by 78.41 percent to N71.97 billion from N40.34 billion budgeted in 2021.
Vanguard’s analysis of the 2021 budget shows that the government has so far surpassed its non-oil revenue as at the end of August 31, 2021 following the aggressive revenue drive.
While the FGN share of oil revenues was N754.2 billion, representing 56.3 percent performance of the prorated sum of N1.34 trillion in the 2021 budget, non-oil tax revenues totalled N1.15 trillion, 15.7 percent higher than the targeted sum.
CIT and VAT collections at N547.54 billion and N235.77 billion, were 20.5 percent and 48.3 percent increase respectively over their respective targets for the period.
However, custom revenue and federation account levies are so far 0.1 percent and 34.6 percent lower than N338.85 billion and N40.34 billion in the 2021 budget respectively as at the end of August.
E-Financial
NDIC Gets Court Order, to Wind Down 96 Microfinance, Mortgage Banks
Nigeria Deposit Insurance Corporation (NDIC) has said that it has obtained Winding up Orders for 96 out of 183 microfinance and primary mortgage banks whose licenses were revoked by the Central Bank of Nigeria (CBN) in May 2023.
Bello Hassa, managing director, NDIC, stated this at a sensitisation seminar for Judges of the Federal High Court in Lagos organised by the NDIC, to enlighten the judiciary on the intricacies of the banking industry.
Hassan said, “As at date, the Corporation had obtained Winding up Orders for 96 out of 183 Micro Finance and Primary Mortgage Banks whose licenses were revoked by the CBN in May 2023, in less than one Year of revocation.”
He added that the NDIC was committed to fulfilling its mandate of protecting depositors through bank supervision, failure resolution and liquidation so as to boost confidence in the financial system.
Speaking on the role that the judiciary plays in the fulfillment of the mandate, Hassan said, “We recognise the judiciary as one of our critical stakeholders. With this, when cases are brought before them, they can receive accelerated hearing and proclamation of Justice.”
Citing some of the achievements from previous editions of the seminar, Hassan said that instances where liquidation-related litigations experienced delays were reduced.
E-Financial
CBN Finally Makes U-turn, Withdraws Circular on Cybersecurity Levy
Central Bank of Nigeria (CBN) has withdrawn its earlier circular directing financial institutions to implement the national 0.5 per cent cyber security levy after the policy was largely resisted.
The withdrawal of the circular was announced via a statement signed by Haruna Mustafa, director, Financial Policy and Regulation, Department and Chibuzo Efobi, director, Payment System Management Department.
The apex bank confirmed the suspension in a circular issued on May 17, 2024 with reference number PSMD/DIR/PUB/LAB/017/005 addressed to commercial banks, mobile money operators, and other financial institutions.
In an earlier circular issued on May 6, 2024 with reference PSMD/DIR/PUB/LAB/017/004, the bank mandated financial institutions to charge a 0.5 per cent levy on all electronic transactions.
President Bola Tinubu last week ordered the suspension of the National Cybersecurity levy.
E-Financial
ABCON, SEC Partner on Digital Currency P2P FX Sector Harmonization
The Association of Bureau De Change Operators of Nigeria (ABCON) has called for the Securities and Exchange Commission (SEC) guidance and collaboration in harmonising the peer-to-peer forex sector in the country.
At an official courtesy visit to the newly appointed SEC Director-General, Dr. Timi Agama, the President of Association of Bureau de Change Operators of Nigeria (ABCON), Aminu Gwadabe, who congratulated the SEC D-G on his appointment, observed that SEC regulates the sector that continues to threaten the existence of BDCs in Nigeria through online virtual transactions platforms which give access to millions of Nigerians to trade in foreign exchange without trace and accountability.
He also explained that ABCON has invested in requisite technology to ensure the continued existence of the business and the preservation of the integrity of the sub-sector, stressing that the future of BDC’s business was digital currency. The ABCON boss said that the meeting with the SEC DG and his executive board was a follow up to an earlier online virtual consultation.
Gwadabe explained that ABCON, the umbrella body for all licensed retail foreign exchange dealers, was established in 1991 to liaise with regulators, relevant stakeholders and security agencies for a transparent retail end forex market.
Gwadabe said: “As at today, there are over 34 million Nigerians dealing in digital currency and the number is rising by about nine percent with a huge market of $9 billion annually. There are thousands of multichannel virtual currency FX platforms and none is indigenous to Nigeria, adding that P2P represents individual-to-individual transaction.
“To automate the entire foreign exchange retail market, ABCON has partnered with the Commodities Exchange Board in building the platform knowing that they have sources of foreign exchange. ABCON is willing to work with SEC towards achieving full automation of the retail end of the foreign exchange market in Nigeria.
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