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Buhari  Government Rakes in N11.5 Trillion from Firms as Taxes – Report

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Federal  government has raked in N11.5tn from taxes paid by business organisations under the administration of President Muhammadu Buhari, according to findings by The Punch Newspaper.

Buhari  Government Rakes in N11.5 Trillion from Firms as Taxes – Report

Data sourced from Company Income Tax reports published by the National Bureau of Statistics between 2015 and 2022 showed CIT collected by the Federal Inland Revenue Service stood at N1.3tn when the President assumed office in 2015 and dipped by 26 per cent to N1tn in 2016 when the country’s economy went into recession due a significant drop in oil prices.

It maintained an upward trajectory between 2017 and 2020, as the government generated a total of N5.3tn during this period.

Companies Income Tax is a tax on the profits of incorporated entities in Nigeria. It also includes the tax on the profits of non-resident companies carrying on business in Nigeria. The tax is paid by limited liability companies inclusive of the public limited liability companies. It is commonly referred to as a corporate tax.

According to the Punch, the CIT rate is 30 per cent for large companies (i.e. companies with gross turnover greater than NGN 100m), assessed on a preceding year basis (i.e. tax is charged on profits for the accounting year ending in the year preceding assessment).

The Federal Government earned N1.6tn from corporate tax in 2021 and made a record N2tn revenue from CIT in the three quarters of last year.

According to the data, the highest contributors to the CIT were the manufacturing, Information Communication Technology and financial services sectors.

Also a critical evaluation of 2022’s Company Income Tax records showed a significant hike in taxes paid by companies across the board.

For example, tax from firms in the information and communication sector rose by 158.51 per cent from N51.05bn in the third quarter of 2021 to N131.97bn in the corresponding period in 2022.

In the same vein, manufacturers paid the most taxes during the period in review, as the Federal Government increased the number of taxes collectable by the Federal Inland Revenue Services from 39 to 61 items.

Some of the new taxes as contained in the schedule to the taxes and levies (Approved list for collection) Act (Amendment Order), 2015, include “national information technology development levy, economic development levy, environmental (ecological) fee or levy; inter-state road taxes; mining, milling and quarrying fee; infrastructure maintenance charge; social services contribution tax, and wharf landing fee where applicable.

Others are entertainment tax, produce sales tax, property tax (where applicable); fire service charge; slaughter or abattoir fee, where state finance is involved, etc.”

In the same vein, checks by The Punch revealed that CIT paid by manufacturers increased by 52.3 per cent from N91.2bn paid in the third quarter of 2021 to N138.9bn in the corresponding quarter of 2022.

Speaking in an interview with The Punch, Michael Olawale-Cole, president of the Lagos Chamber of Commerce and Industry,, said the productive sector was being overburdened by taxes because of the government’s inability to widen the tax bracket and capture more taxpayers.

Olawale-Cole further advised the government to devise means of protecting its sources of revenue rather than resort to aggressive taxation whenever it encounters a revenue shortfall.

He said, “So, the government needs money, but what we are saying is that the government is just putting pressure on the same people as opposed to developing to bring more people into the tax bracket. That is the major issue. There are a lot of people who are not paying taxes but are making money in this country.

“So, the government should find a way of catching them. They are improving because now government banks are linked with tax authorities. So, if income comes into your account, they have a way of knowing. They should do more of that. “This could be done through electronic means.

“We are saying they should not increase the tax rates all the time for the same people who are paying when there are more people who are not paying because if you tax them to a point, they will not be able to pay.”

Industry experts in the ICT sector, which ranks amongst the highest contributors to the CIT, have also raised concerns that the sector was being overburdened by multiple taxes.

A report titled “Taxing Nigeria’s subnational economies to oblivion” by SBM Intelligence recently revealed that the industry suffered from over-taxation because of its sustained growth in the last 20 years.

It said, “At the federal level, telecommunications companies are expected to pay taxes such as Companies Income Tax, the Capital Gains Tax, Withholding Taxes, Stamp Duty, National Industrial Training Fund, Employees Compensation Scheme, the Tertiary Education Trust Fund, National Housing Fund contributions, Contributory Pension Schemes, and customs duties.

“These taxes are applicable to all incorporated companies in Nigeria. There are also sector-specific taxes and levies such as the Annual Operating Levy paid to the Nigerian Communications Commission by all holders of licences issued by the regulator, the National Cybersecurity Fund, the National Information Technology Development Fund Levy and Right of Way charges.”


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E-Financial

Lagos State Appoints MoneyMaster as Payment Partner for “Ounje Eko” Programme

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“Ounje Eko”, the food price discount initiative of the Lagos State Government, has appointed leading payment service bank, MoneyMaster Payment Service Bank Limited (MMPSB), as its collaborator in the bid to ensure ease of payments at the market.

MoneyMaster is one of the Central Bank of Nigeria-licensed Payment Service Banks (PSBs) to promote financial inclusion across Nigeria.

Under the partnership, MMPSB will apply its cutting-edge payment solution to engender easy payment and reconciliation in order to make   the experiences of Lagosians who will be getting their food supplies from the markets pleasurable. Its payment solution is also all-encompassing and ensures real time value to payment destinations.

The mobile bank was appointed as the collection and payment partner for “Ounje Eko” Food Markets programme which is a government initiative serving the five divisions of Lagos State. Consequent on this, MoneyMaster Payment Service Bank will collect payments in 57 LCDAs in the state.

The partnership gives credence to the quality of payment solutions that MoneyMaster is reputed for in its services to its growing business clientele in private and public sectors.

 


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E-Financial

CBN, EFCC Probe Banks, Firms over Alleged Forex Racketeering

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Central Bank of Nigeria (CBN), is investigating irregular foreign exchange transactions and forward contracts valued at approximately $2.4 billion.

CBN, EFCC Probe Banks, Firms over Alleged Forex Racketeering

The  inquiry follows an extensive audit by Deloitte, which scrutinized $7 billion in dollar debts accumulated under the bank’s previous leadership.

In the aftermath of the 294th Monetary Policy Committee meeting in Abuja, Yemi Cardoso, governor of CBN,  disclosed to journalists that the investigation, supported by the Economic and Financial Crimes Commission, among other security bodies, aims to clarify the legitimacy of these FX allocations identified as problematic by the audit.

“It was determined that a number of these transactions did not qualify…they were outright illegal. The law enforcement agencies are now looking into those transactions that as far as we are concerned, are not valid to be paid,” Cardoso detailed, emphasizing the unlawful nature of these forex deals.

The crux of the investigation lies in the audit findings that a significant portion of the scrutinized transactions lacked proper documentation and, in many instances, were deemed outright illegal.

However, the unfolding investigation has raised concerns within the organized private sector, with some entities contemplating legal action against commercial banks for unresolved forex bids.

Despite these tensions, Governor Cardoso reassures that the foreign exchange market remains open and transparent, inviting stakeholders to address their forex needs through the official channels.

Furthermore, Cardoso clarified the distribution of fertilizers to farmers as a one-off measure and not indicative of a shift back to direct interventions by the CBN, underscoring a commitment to strategic, regulatory governance rather than direct market involvement.

 

 

 

 

 

 

 

 


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CBN Urges Banks to Expedite Action on Recapitalisation

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Central Bank of Nigeria (CBN) has directed deposit money banks in the country to expedite action to increase their capital base from the current ₦25bn.

CBN Urges Banks to Expedite Action on Recapitalisation

Olayemi Cardoso, governor of CBN

Olayemi Cardoso, governor of CBN, stated this during the apex bank’s 294th meeting of the Monetary Policy Committee (MPC) on Tuesday in Abuja, when the MPC hiked the interest rate by 22.75% to 24.75%.

The apex bank chief said the MPC examined developments in the banking sector and expressed satisfaction that the industry remained stable. The committee, however, said to guard against risk, commercial banks in the country should accelerate their recapitalisation efforts.

Cardoso said, “The MPC also reviewed developments in the banking system and noted that the industry remains safe, sound, and stable. The committee thus called on the bank to sustain its surveillance and ensure compliance of banks with existing regulatory and macro-potential guidelines.

“The MPC also enjoined the banks to expedite actions on the recapitalisation of banks to strengthen the system against potential risks in an increasingly globalised world.”

 

 

 

 


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