E-Financial
FIRS Probes of Big Firms over Tax Returns
Federal Inland Revenue Service (FIRS) has launched a new assessment regime to determine the tax ranges companies before they file returns.
The agency has been authorised to plug into big companies’ databases to assess performance.
The tech-driven onsite assessment involves the attachment of FIRS software to the companies’ databases.
This allows FIRS to ascertain the right value of taxes to collect from such institutions before tax fillings.
Section 25 of the Federal Inland Revenue Service (Establishment) Act-as amended under the Finance Act, 2021-gives powers to the Service to deploy proprietary or third party technology for tax administration. This includes tax assessment and information gathering from taxpayers.-
Consequently, where the Service desires for the purpose of assessment access to any taxpayer’s database, it would give a 30 day’s notice to the taxpayer requesting that such access be granted.
Failure to grant access is considered an offence under the law and subject to an administrative penalty of N25,000 for each day the failure continues.
The new assessment regime is a major highlight of an aggressive push for efficient tax assessment and collection as Nigeria races to rev up its tax income.
The 2022 budget indicates a deficit of 37 per cent; with projected non-oil revenue of N2.1 trillion and non-oil taxes such as company income tax and value-added tax (VAT) of N1.22 trillion.
Olufemi Babem, partner, Tax, Regulatory and People Services, KPMG Nigeria, at the weekend confirmed the new FIRS initiative.
He spoke at the weekend on ‘Economic Impact of Government’s Tax Revenue Drive’ at the virtual Nairametrics 2022 Economic Outlook in Lagos.
The law requires companies to register for tax and file their audited accounts and tax computations with the FIRS within six months of their financial year-end on a self-assessment basis or 18 months after incorporation.
Babem said the implementation of the new tax plan is already taking place in key sectors – banking, insurance, manufacturing, housing and oil and gas sectors among others as the government pushes hard to raise its revenues and tax to Gross Domestic Product (GDP) ratio to new heights.
He added that the implementation of the Finance Act, 2021 has made the new policy plan actionable by giving more powers to FIRS to collect taxes for the nation.
He explained that having access to companies tax data will ensure accurate taxing of such institutions.
Babem said: “It will be an onsite attachment of tax software to targeted companies’ database. The government is also looking at big digital companies.
“Uber is complying in tax remittance. Netflix has notified companies to add Value Added Tax (VAT) to its payments.”
He advised businesses to restructure their operations for efficiency given the new tax drive.
He said the government has consistently taken steps to expand the tax base adding that Twitter, Google, Netflix and other tech giants’ taxes will be better captured based on new tax reforms.
He said the government has also increased in effective rate of tax on corporate profits by about 0.6 per cent; broadened the corporate income tax base for for-profit educational institutions; and foreign companies providing services to Nigerian beneficiaries.
The introduction of a deemed tax for foreign providers of digital goods and services is also being enforced.
He said the government has introduced a “sugar tax”, broadened the VAT base and captured digital providers of goods and services.
Andrew Nevin, partner & chief economist, PwC Nigeria, called on the Central Bank of Nigeria (CBN) to unify the multiple exchange rates to stimulate business confidence and economic growth.
He said although Nigeria’s GDP was growing, such growth does not reflect on the wellbeing of the people.
He said: “Nigeria’s economy is bigger than what statistics say. There is a need to bring the informal sector into the economy and ensure that the growth in the economy impacts positively on the people’s wellbeing.”
Renaissance Capital Africa (Rencap) has named Zenith Bank Plc its top conviction pick among Nigerian banks, ahead of GTCO and AccessCorp, in a fresh research report highlighting the lender’s robust balance sheet and dividend potential despite sector headwinds.
Zenith Bank
The comprehensive review of the Nigerian banking industry notes that Zenith’s current market valuation lags its improving fundamentals, even as the NGX Banking Index posts strong gains recently.
Rencap upgraded Zenith from HOLD to BUY, lifting its target price by 96 per cent based on a lower risk-free rate from falling government bond yields, refined beta estimates, and expectations of cleaner assets post-forybearance resolutions.
Balance Sheet Strength Drives Outlook
Analysts project challenges to earnings growth from anticipated Central Bank of Nigeria (CBN) rate cuts but foresee higher dividend payouts from resolved forbearance and single obligor loan (SOL) exposures alongside rising cash profits.
“Although we expect banks to face challenges in growing earnings… the balance sheet clean-up… will support higher dividend payouts relative to prior years,” the report states, ranking Zenith first, followed by GTCO and AccessCorp.
Key positives include loan write-offs that bolstered asset quality, enabling sustainable growth amid financial system reforms.
Dividend Recovery in Focus
Sector profitability from 2023-2024 was inflated by unrealised foreign exchange gains, which regulations barred from cash dividends, capping payouts despite headline profits.
Zenith historically led payout ratios in 2021-2022 via strong cash generation and capital discipline; Rencap expects a rebound as pressures ease, attracting income-focused investors.
Tier-1 Leadership Reinforced
Zenith Bank recently topped Nigeria’s tier-1 capital rankings for the 16th straight year, per The Banker magazine (Financial Times), affirming its resilience and positioning for long-term value creation.
CBN
- Access Bank Plc
- Fidelity Bank Plc
- First Bank of Nigeria Ltd
- Guaranty Trust Bank (GTBank)
- United Bank for Africa (UBA)
- Zenith Bank Plc
- FCMB (First City Monument Bank) – currently pushing to raise additional capital to secure its international licence.
- Wema Bank
- Standard Chartered Bank (Nigeria)
- Citibank Nigeria
- Stanbic IBTC Bank
- Sterling Bank
- Globus Bank
- Premium Trust Bank
The Securities and Exchange Commission (SEC) has revised the minimum capital applicable to all categories of regulated capital market entities after 10 years.
The minimum capital review, according to the SEC, is informed by the need to strengthen market resilience, enhance investor protection, align capital adequacy with the evolving risk profile of market activities, and ensure that regulated entities possess sufficient financial capacity to discharge their obligations in a sustainable manner.
“The revised Minimum Capital framework seeks to: enhance the financial soundness and operational resilience of market operators; align capital requirements with the scope, complexity, and risk exposure of regulated activities; promote market stability and systemic risk mitigation; and support innovation and orderly development of new market segments, including digital assets and commodities markets,” SEC said in a January 16 circular to market operators.
The SEC circular was sent to all entities regulated by the Commission, including but not limited to core and non-core capital market operators; market infrastructure institutions; capital market consultants; financial technology (FinTech) operators; Virtual Asset Service Providers (VASPs); and Commodity market intermediaries.
All affected entities are required to comply with the revised Minimum Capital Requirements on or before June 30, 2027, the circular said.
“Entities that fail to meet the prescribed requirements within the stipulated timeline shall be subject to appropriate regulatory sanctions, including suspension or withdrawal of registration, as may be determined by the Commission,” SEC said.
Tier-1 Portfolio Managers (Full Scope) involved in the management of Collective Investment Schemes (CIS) and Alternative Investment Funds (Private Equity, Venture Capital, Infrastructure Funds etc) above N20 billion Net Asset Value (NAV), or discretionary and Non-Discretionary Private Portfolio Management Services above N20 billion Assets under Management (AuM), or exposure to foreign instruments up to 40 percent of the NAV are now required to have a minimum capital of N5 billion as against N150 million.
“Any Fund and Portfolio Manager with NAV/AuM of more than N100billion should have a minimum of 10 percent of the NAV/AuM as capital,” SEC added.
For the Tier-2 fund/portfolio managers (Limited Scope) who are in the business of management of Collective Investment Schemes with limited pooled fund creation of not more than 10 times the required capital (N20 billion) on Net Asset Value (NAV), or discretionary and non-discretionary private portfolio management services of not more than N20 billion, or those exposure to foreign instruments of not more than 20 percent of the NAV, now require N2 billion as minimum capital as against low of N150 million.
Likewise, broker-dealers whose services include: client execution, proprietary trading, margin/securities lending and advisory services no longer require N300 million minimum capital to operate but N2 billion.
The SEC said the minimum capital review from 2015 low is in line with its mandate under the Investments and Securities Act 2025 to regulate and develop the Nigerian capital market.
Also, Tier 1 issuing houses who do non-interest finance services, advisory & arrangement services but no underwriting now require N2 billion as against N200 million; while Tier 2 –issuing houses with underwriting and offers a ‘one-stop-shop’ for issuers, provides underwriting services, and renders advisory and product development services require N7 billion minimum capital for this business as against N200 million.
Also, the minimum capital requirement for brokers (client execution only) has been jacked up from N200 million to N600 million, while that of dealers (proprietary trading only) has been moved from N100 million to N1 billion.
Broker-Dealers’ (client execution, proprietary trading, margin/securities lending and advisory services) has been raised from N300 million to N2 billion, while Sub-Brokers’ (Digital) from N10million to N100million; Sub-Broker (Corporate) has been increased from N10million to N50 million. Also, sub-brokers’ (Individual) now need N10 million minimum capital for the business as against N2 million while inter-dealer brokers require N2 billion as against N50 million.
Zenith Bank Top Nigerian Bank Pick Ahead of GTCO, AccessCorp
Here Are Nigerian Banks That Have Secured Their Licences
ICPC Charges Ozekhome with Forgery, Corruption Over London Property
MTN CEO Toriola Hails Nigeria’s Telecom Transformation at MIPAD
SEC Hikes Minimum Capital Requirements for Market Operators After a Decade
Banks quietly move to enforce new ₦50 transfer levy from Jan. 1
FIRS says NIN, CAC Numbers to Serve as Tax IDs from 2026
FIRS Declares NIN, CAC Numbers as Tax IDs from 2026
US Begins Partial Visa Ban on Nigerians January 1
Galaxy Backbone Tops FG’s Website Performance Ranking
E-Financial2 days agoSEC Hikes Minimum Capital Requirements for Market Operators After a Decade
Telecom2 days agoVodacom Crowned Africa’s Top Employer 3rd Year Running on Innovation, Ethical AI
Telecom2 days agoStudy Shows Blocks in Telegram are Pushing the Underground Out
News2 days agoNigeria Off EU High-Risk Money Laundering List in Major Financial Win
News2 days agoNGX Unveils Net-Zero Plan for Greener Capital Market
Telecom2 days agoGalaxy Backbone Marks Two Decades of Powering Nigeria’s Digital Evolution
Telecom2 days agoGalaxy Backbone Marks 20 Years, Tops FG Website Scorecard
News4 hours agoICPC Charges Ozekhome with Forgery, Corruption Over London Property