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FG Defies Court as Banks Continue Stamp Duty Collection

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  • FG Defies Court as Banks Continue Stamp Duty Collection

The Federal Government and its agencies have continued to defy the ruling of the Court of Appeal that the deduction of stamp duty on bank deposits is illegal.

Investigation by our correspondent showed that the Technical Committee on Stamp Duty had advised the Central Bank of Nigeria to issue a circular to the banks to stop collecting stamp duty of N50 on deposits into current accounts with value of N1,000 and above.

Although the court ruling was given on April 21, investigation showed that the apex bank had yet to issue the circular. The duty is projected to yield N2.5tn to the Federal Government per annum.

Some bankers, who spoke to our correspondents on the condition of anonymity, said they had yet to get any circular from the CBN to stop the collection.

The spokesperson for the CBN, Mr. Isaac Okoroafor, told our correspondent on the telephone on Thursday that the apex bank had nothing to do with the stamp duty.

He asked our correspondent to refer every question on the subject to the Nigerian Postal Service.

The spokesperson for NIPOST, Hajiya Simbiat Lawal, was indisposed when our correspondent called her on Thursday, but she had earlier said if there was a court ruling, the organisation, as a law abiding entity, would abide by the decision of the court.

The CBN had in a January circular issued to the Deposit Money Banks in the country directed them to deduct N50 for stamp duty on every deposit in a current account amounting to N1,000 and above beginning from January 1, 2016.

The circular, which has since been implemented by the banks, was in spite of the fact that there was a subsisting issue in court on the subject.

Ruling on an appeal filed by Standard Chartered Bank against Kasmal International Services Limited and 22 others, Justice Ibrahim Saulawa and four others justices of the Court of Appeal, Lagos Judicial Division, held that the Stamp Duty Act, 2004 did not impose a duty on the banks to deduct N50 on deposits.

Kasmal International Services Limited, which belongs to Senator Buruji Kashamu, had on February 17, 2014 obtained the judgement of a Lagos High Court against the banks to the effect that that they should remit more than N6bn they were supposed to have collected on deposits since the Stamp Duty became an Act of Parliament in 2004 through it to NIPOST.

According to Kasmal, NIPOST had appointed it as an agent to collect the stamp duty on its behalf from banks and, therefore, the banks should remit the money accruing as stamp duty through it to the postal organisation.

However, in a lead judgment, Justice Saulawa held that the Stamp Duty Act imposed no such duty on the banks. In concurring rulings delivered by a panel of the Appeal Court, Justices Ejembi Eko, Adamu Jauro, Moore Adumein and Nonyerem Okoronkwo agreed in totality with the ruling delivered by Saulawa.

The appeal court set aside the ruling of the lower court delivered by justice C. J. Aneke on five grounds.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Crude Oil

Oil Prices Continue to Slide: Drops Over 1% Amid Surging U.S. Stockpiles

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Crude Oil

Amidst growing concerns over surging U.S. stockpiles and indications of static output policies from major oil-producing nations, oil prices declined for a second consecutive day by 1% on Wednesday.

Brent crude oil, against which the Nigerian oil price is measured, shed 97 cents or 1.12% to $85.28 per barrel.

Similarly, U.S. West Texas Intermediate (WTI) crude slumped by 93 cents or a 1.14% fall to close at $80.69.

The recent downtrend in oil prices comes after they reached their highest level since October last week.

However, ongoing concerns regarding burgeoning U.S. crude inventories and uncertainties surrounding potential inaction by the OPEC+ group in their forthcoming technical meeting have exacerbated the downward momentum.

Market analysts attribute the decline to expectations of minimal adjustments to oil output policies by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known collectively as OPEC+, until a full ministerial meeting scheduled for June.

In addition to concerns about excess supply, the market’s attention is also focused on the impending release of official government data on U.S. crude inventories, scheduled for Wednesday at 10:30 a.m. EDT (1430 GMT).

Analysts are keenly observing OPEC members for any signals of deviation from their production quotas, suggesting further volatility may lie ahead in the oil market.

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Energy

Nigeria Targets $5bn Investments in Oil and Gas Sector, Says Government

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Crude Oil - Investors King

Nigeria is setting its sights on attracting $5 billion worth of investments in its oil and gas sector, according to statements made by government officials during an oil and gas sector retreat in Abuja.

During the retreat organized by the Federal Ministry of Petroleum Resources, Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, explained the importance of ramping up crude oil production and creating an environment conducive to attracting investments.

He highlighted the need to work closely with agencies like the Nigerian National Petroleum Company Limited (NNPCL) to achieve these goals.

Lokpobiri acknowledged the challenges posed by issues such as insecurity and pipeline vandalism but expressed confidence in the government’s ability to tackle them effectively.

He stressed the necessity of a globally competitive regulatory framework to encourage investment in the sector.

The minister’s remarks were echoed by Mele Kyari, the Group Chief Executive Officer of NNPCL, who spoke at the 2024 Strategic Women in Energy, Oil, and Gas Leadership Summit.

Kyari stressed the critical role of energy in driving economic growth and development and explained that Nigeria still faces challenges in providing stable electricity to its citizens.

Kyari outlined NNPCL’s vision for the future, which includes increasing crude oil production, expanding refining capacity, and growing the company’s retail network.

He highlighted the importance of leveraging Nigeria’s vast gas resources and optimizing dividend payouts to shareholders.

Overall, the government’s commitment to attracting $5 billion in investments reflects its determination to revitalize the oil and gas sector and drive economic growth in Nigeria.

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Commodities

Palm Oil Rebounds on Upbeat Malaysian Exports Amid Indonesian Supply Concerns

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Palm Oil - Investors King

Palm oil prices rebounded from a two-day decline on reports that Malaysian exports will be robust this month despite concerns over potential supply disruptions from Indonesia, the world’s largest palm oil exporter.

The market saw a significant surge as Malaysian export figures for the current month painted a promising picture.

Senior trader David Ng from IcebergX Sdn. in Kuala Lumpur attributed the morning’s gains to Malaysia’s strong export performance, with shipments climbing by a notable 14% during March 1-25 compared to the previous month.

Increased demand from key regions like Africa, India, and the Middle East contributed to this impressive growth, as reported by Intertek Testing Services.

However, amidst this positivity, investors are closely monitoring developments in Indonesia. The Indonesian government’s contemplation of revising its domestic market obligation policy, potentially linking it to production rather than exports, has stirred market concerns.

Edy Priyono, a deputy at the presidential staff office in Jakarta, indicated that this proposed shift aims to mitigate vulnerability to fluctuations in export demand.

Yet, it could potentially constrain supply availability from Indonesia in the future to stabilize domestic prices.

This uncertainty surrounding Indonesian policies has added a layer of complexity to palm oil market dynamics, prompting investors to react cautiously despite Malaysia’s promising export performance.

The prospect of Indonesian supply disruptions underscores the delicacy of global palm oil supply chains and their susceptibility to geopolitical and regulatory factors.

As the market navigates these developments, stakeholders remain attentive to both export data from Malaysia and policy shifts in Indonesia, recognizing their significant impact on palm oil prices and market stability.

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