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Use VAT to Encourage e-Payment-Apochi

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Agada Apochi, managing director, Unified Payments, has urged federal government to consider granting tax relieve to consumers to encourage the use of electronic card for payments at merchant locations.

He stated this against the backdrop of efforts by Central Bank of Nigeria (CBN) to encourage the use of Point of Sale terminals at merchant location for payments which have not yielded the designed result.

Presently, weekly volume of transactions on PoS increased to 200, 000 on some 150,000 deployed terminals, while weekly value of transactions is put at N3.4 billion.

According to Apochi “government can also do a lot by creating the right incentives for adoption of e-payments. If Government offers tax incentives for e-payments, it will be an effective tool to encourage a cashless culture.

That does not mean lower tax collection by government. Rather, Government tax collection will increase. For instance, if Government were to offer 50% incentive on Value Added Tax for payments made electronically, Government tax collection could increase by several multiples. 2.5% VAT on N100 million transactions is higher than 5% VAT on transactions of N10 million. Currently, many transactions are not tracked because of cash payments and that is to the disadvantage of Government.”

He however cited instance of CBN cash threshold which has helped in cashless initiative. “CBN was right when at introduction of the cashless policy, it said those who want to transact in cash should bear the cost rather than the practice where the cost is shared by all Nigerians through high cost of operations for banks and the resultant high cost of banking services. So, CBN had set a lower threshold for free cash service.”

“Unfortunately, the CBN was put under immense pressure by the Nigerian public and it had to raise the threshold, which has resulted in many businesses and individuals continuing with the cash culture at cost to the banking industry and ultimately the Nigerian public.

The public misunderstood the benefits of the cashless policy. People thought it was about banks making more money, which was a wrong perception.

First, it is about reducing the cost of banking services. If a bank charges a customer 25% interest rate and the cost of bank’s cost is 20%, the bank’s margin is 5%.

On the other hand, if the bank can reduce the cost of operations to 10% and charge the customer 15%, the banks will still make 5% margin. For the customer, it means a reduced cost. That will equally result in lower rates of default on the customer’s part.

I think the only duty on the part of the CBN is to continue to educate the public while the duty of the public is to support the CBN.”

Unified Payments® is a card-neutral and option-neutral Payments Service Provider owned by a consortium of leading Nigerian banks. Unified Payments® operates as a shared infrastructure for the banking community in Nigeria and Payments Service Provider within and outside Nigeria, with a mission to be the most preferred e-payment service provider in Africa.

Formerly known as ValuCard Nigeria Limited, the name of the Company was changed in 2012 to reflect its new business, following a successful transformation from a domestic card scheme to a provider of payment services supporting different payment options and schemes.

Unified Payments is a Principal & Plus Member of Visa and has contributed significantly to the growth of electronic payments in Nigeria. These contributions and exceptional value-innovations include but not limited to:

The company pioneered the issuance and acceptance of EMV Chip+PIN cards in Nigeria leading to reduction of ATM fraud in Nigeria by over 90%.

It enabled Nigerian banks to issue payment cards to Naira accountholders to be used for the first time-ever globally and also enabled Nigerian banks for first-ever acceptance of foreign cards at their ATMs.


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E-Financial

FG Sacked IST Members over Fraud- Ahmed

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Mrs Zainab Ahmed, minister of Finance Budget and National Planning, has said the Federal Government sacked some past members of the Investments and Securities Tribunal (IST) as they indulged in corruption.

FG Sacked IST Members over Fraud- Ahmed

Inaugurating the new members, the minister charged the new members to eschew corruption and be forthright.

Bar. Azi Amos Isaac was appointed as Chairman for a five year term and Bar. Nosa Smart Osemwengie, was re-appointed as member for a second term of four years.

“The problem with the tribunal has been infighting amongst members, lack of industrial harmony and series of complaints bordering on maladministration.

“This has been the bane of the tribunal and a source of embarrassment not only for the Ministry of Finance but for the government in general,” Ahmed said.

The new chairman, Azi, assured the finance minister that, “the teething issue of restiveness has been addressed since he assumed duty,” adding that, “The place is calm and the staff have become very supportive.”

Azi said since 2003, the tribunal has “given judgment in the value of assets worth over N844 billion and that from 2017 to date, they have given decisions in monetary value totalling over N28bn.

“It has not failed in its adjudicatory responsibility.

“It has carried out its assignment with candour and integrity and intends to improve on what has been on ground.”

 


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CBN Bans Customer-to-Customer Forex Transfer

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Central Bank of Nigeria (CBN) has banned transfer of foreign exchange (forex) from one customer to another.

CBN Bans Customer-to-Customer Forex Transfer

According to the apex bank, forex cash lodgements into domiciliary accounts can only be done by the account owners henceforth.

An internal memo available in the media space explains that the new guidelines are necessary to review the utilisation of inflows into customers domiciliary accounts.

The circular states: “Forex inflows cannot be credited to customers until the legitimacy of funds is established.

“They can have unfettered access by telegraphic transfers up to a limit of $40,000 monthly for payment of medical bills, school fees, subscription to professional bodies subject to existing CBN guidelines.

“Transfers from one customer to another is prohibited. Transfer within related companies is allowed subject to a limit of $50,000 per month.”

It recommended that proceeds from non-oil exports should be sold to banks, used for repayment of dollar term loans, and self-utilisation for trade transactions for LC, bills and Form A.

Also oil export proceeds from E&P companies are to be used to pay contractors and service providers employed by the oil companies in addition to the recommended uses for non-oil FX proceeds.

Offshore forex inflows from other Nigerian banks and internal account to forex transfers sourced from offshore inflows are to be used for trade transactions subject to eligibility for E-Form M.

“Upon confirmation of the legitimacy of the inflows, customers can have unfettered access, subject to a maximum of $50,000,” the document read.

“Utilisation for trade transactions subject to processing of eligible trade transactions using E-Form M. Payment for services must be backed with demand note from offshore beneficiary and other regulatory documents.

“Related party transfers are allowed to the maximum of the inflow received. The transfer request should be backed by a signed instruction from the account holder.” Payment of government fees and levies are also allowed to the maritime, oil and gas, aviation. government parastatals and export processing zones.

 


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Stanbic IBTC, Standard Bank, Listed Among Top African Corporate Brands

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Stanbic IBTC Holdings PLC and its parent company, Standard Bank, have emerged amongst the top winners of the 2020 Tech Times’ Africa LinkedIn Corporate Brand Awards.

The Stanbic IBTC Group emerged the second position in the category, with total votes of 3,515, out of 24 firms nominated for the award. Standard Bank placed the fourth 2,494 votes.

Nominations for this award opened to the public on July 1, 2020 and closed on July 14.

Shortlisted nominees were announced on August 24 while voting commenced immediately and voting ended on September 8, 2020.

The Corporate Brand Awards was instituted by Tech Times’ Africa, an online platform for leading technology, innovation, and startup stories.

Expressing his delight on the awards, Dr Demola Sogunle, Chief Executive, Stanbic IBTC Holdings PLC, said that both Stanbic IBTC Holdings PLC and Standard Bank had been deliberate and consistent in making a remarkable impact in Africa’s financial sector.

“Our sincere appreciation goes to the organisers of the Africa Corporate Brands Awards and to every member of the public who voted. This is a reflection of the high level of trust and confidence that the public has reposed on us,” he added.

Dr Sogunle further said that Stanbic IBTC Holdings PLC would remain relentless in portraying the organisation as one of the most influential corporate brands in Africa.

He stated: “Stanbic IBTC Holdings PLC and Standard Bank have relentlessly contributed to driving the growth and development of the African financial ecosystem. These awards affirm our efforts, and we are encouraged to raise the bar continually.”

The Africa Corporate Brand Award is designed to identify and recognise outstanding companies. It also projects their achievements and impacts on African society and the world at large.


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