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VAT Amendments: NBA, SANs Fights for Equality, Warns National Assembly and FIRS Against Any Illegality

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Internal revenue

The Nigerian Bar Association and prominent senior lawyers, on Thursday, warned the Federal Inland Revenue Service and the National Assembly against any illegality in their bid to amend the Value Added Tax law in the country.

The Publicity Secretary of the NBA, Rapulu Nduka, and Senior Advocates of Nigeria, Chief Mike Ozekhome, Ebun-Olu Adegboruwa and Afam Osigwe, gave the warning in separate interviews with our correspondents in response to the judgment of the Federal High Court sitting in Port Harcourt, which held that the Rivers State Government had the powers to collect VAT within its territory.

While the NBA urged the lawmakers representing the various states to be on the lookout for the request by the FIRS to include VAT on the Exclusive Legislative List, the SANs supported moves by the Lagos and Rivers state governments to take over the collection of the tax.

Following the court’s rejection of the FIRS’ application for stay of execution, the Rivers State Government ordered companies based in the state to start paying VAT to its revenue board.

On Thursday, The PUNCH reported that the FIRS had written to the National Assembly to seek the inclusion of VAT on the exclusive legislative list.

Nduka, in an interview with one of our correspondents, supported the judgment of the Federal High Court, saying it was valid.

He also said the FIRS could appeal the judgment, but stated that the National Assembly should be cautious with the request of the agency for the amendment of the VAT law.

He stated, “Firstly, the judgment of the Federal High Court regarding VAT, to the best of my knowledge, is a valid judgment. If the FIRS feels aggrieved, it can appeal to the Court of Appeal.

“On the issue of the FIRS requesting the National Assembly to amend the Constitution to put VAT collection on the exclusive legislative list, Nigeria is a country governed by laws and the NBA advocates the promotion of the rule of law.

“There are procedures for the amendment of aspects of the Constitution, which must be followed. We hope that our lawmakers do the right thing. Thankfully, we have representatives from all states of the federation.

“I will be surprised if the FIRS pushes for a distinct Federal Revenue Court, especially at this time.

“It really speaks volumes. We must recall that the Federal High Court used to be a revenue court. One would wonder if the proper response to an unfavourable judgment is to ask for new courts.”

Also, a legal practitioner, Kudos Okor, stated that VAT should not be collected by the FIRS.

He stated, “If you look at constitutional provisions, you will find out that a lot of the taxes paid to the Federal Government are actually supposed to be paid to the states.

“I believe the demand of the FIRS is inappropriate; it is only trying to extort Nigerians. I advise every state governor to kick against this demand. No state governor should allow the Federal Government to take what rightfully belongs to the state.”

Adegboruwa backs Rivers, Lagos on VAT laws

Adegboruwa also threw his weight behind the state laws on VAT in a statement on Thursday, saying, “State VAT law is a form of restructuring. It is restructuring and I support it 100 percent. We have been shouting and crying for this lopsided federalism to be made equitable.

“Those who make peaceful change impossible make violent change inevitable.”

Adegboruwa commended the Rivers State Governor, Nyesom Wike, for starting the revolution.

He also commended the Lagos State Governor, Babajide Sanwo-Olu; the Attorney-General of Lagos State, Moyosore Onigbanjo (SAN); and the Lagos State House of Assembly for their stance on VAT collection by the state government.

Meanwhile, members of the business community and the Rivers State Civil Society Organisation have backed Wike’s decision on VAT collection.

The President, Rivers Entrepreneurs and Investors’ Forum, Ibifuro Bobmanuel; and Chairman, Rivers State Civil Society Organisation, Enefaa Georgewill, gave the governor the backing in separate interviews with one of our correspondents in Port Harcourt on Thursday.

Bobmanuel, a financial expert, said when state governors realize that VAT would be paid directly to the states, they would begin to treat businesses with a lot of respect.

On his part, Georgewill lauded Wike for the courage to fight a cause, which he said was in order, adding that the present situation meant more revenue for the state.

Ozekhome, on his part, said states, by reason of the legislature, should not lose consumption taxes to the Federal Government.

Ozekhome made his position known in an interview with The PUNCH.

He said, “VAT is ideally a matter within the residual legislative list of states. It is a consumption tax collected by producers and manufacturers of goods and is then passed on to the ultimate consumers.

“Why, in a federal system of government such as we operate, should a state that harbours industries and companies lose the consumption tax to the Federal Government, which is a central government? It makes no sense at all.

“If the National Assembly makes the mistake of legislating on and including VAT as a matter on the Exclusive Legislative List, it can be lawfully challenged in a court of law. All the state attorneys-general should join hands together and sue on behalf of their various states.”

On his part, Osigwe said the call for the establishment of a special court was unnecessary, adding that it would further strain the nation’s economy.

He stated, “In Nigeria, we have this attitude of thinking that a court must be created for everything. We want courts created for economic and financial crimes, electoral offences and now revenue collection.

“The Federal High Court started as a revenue court and today, it has become a court of all jurisdictions.

“On VAT, for the FIRS to write to the National Assembly shows that it is too agreed that there is a need for clarification on VAT.

“The states had largely yielded power to the Federal Government until recently. I think the ongoing judicial process is a welcome development. We need to have some certainty on the matter.”

But the National Assembly said the FIRS, just like any other institution, group, or individual, had the right to seek an amendment to the country’s Constitution.

The Chairman, Senate Committee on Media and Public Affairs, Senator Ajibola Basiru, when asked to comment on the legality of the request of the tax agency, said the FIRS had not done anything illegal.

He, however, said the approval of such an amendment was not automatic because the request would pass through normal processes.

Basiru stated, “Every stakeholder has the right to make requests for the amendment of the constitution. However, whether the amendment will pass or not will depend on it passing through the requisite processes stipulated by Section 9 of the Constitution.

“I can’t express any personal opinion on the FIRS letter, because I’m a member of the Constitution Review Committee and the matter has not come before us.

Lagos hails Assembly over VAT bill passage

The Lagos State Government has hailed the passage of the Value Added Tax Bill by the state House of Assembly, saying it followed due process.

The state Commissioner for Information and Strategy, Mr Gbenga Omotoso, in an interview with one of our correspondents on Thursday, said the passage of the bill would benefit residents of the state.

He said, “The House has just passed the bill; it has not been returned to the executive. We are waiting for them to bring the bill for the governor to sign.

“I think the due process was followed; the bill went through various reading stages and there was a public hearing, where residents of the state made their views known on the bill.

“This is not the first bill that has been passed by the Lagos State House of Assembly. The executive has sent in about 40 bills since Governor Babajide Sanwo-Olu assumed office. This is just one of the bills. It is all about Lagosians, rule of law and true federalism. It is a matter of law, not emotions.”

The state House of Assembly had on Thursday passed the Lagos State Value Added Tax Bill.

According to a statement, the bill was passed during the plenary in which the lawmakers unanimously adopted the recommendations in the reports of the Committee on Finance as the resolutions of the House, leading to its third reading.

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Finance

Oil-producing States Receive N35bn Allocation as FG, States, LGs Share N699bn in December

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U

The sum of N699.824 billion was allocated to the three tiers of government in December, 2021, the Federation Accounts Allocation Committee (FAAC) says.

It further disclosed that the oil-producing states in the country received N35.297 billion as 13 percent derivation revenue.

A communiqué issued at a virtual meeting of FAAC for January 2022 revealed the above.

In its breakdown, the federal government got the sum of N279.457 billion, the state governments received N221.190 billion, and the local government councils were given N163.879 billion which amounted to N699.824 billion.

The North-east Development Commission (NEDC) also got an allocation of N5.796 billion.

According to the communique, the total distributable revenue of N699.824 billion is made up of distributable statutory revenue of N507.267 billion, distributable value-added tax (VAT) revenue of N187.409 billion, and exchange gain of N5.148 billion.

The FAAC recorded an increase of N5.080 billion in December as its gross revenue obtained from the value-added tax was N201.255 billion compared to the N196.175 recorded in November.

“The sum of N5.796 billion allocation to the North-east Development Commission (NEDC) and N8.050 billion cost of the collection were deducted from the N201.255 billion gross VAT revenue, resulting in the distributable VAT revenue of N187.409 billion.

“From the N187.409 billion VAT revenue available for distribution, the federal government received N28.111 billion, states got N93.705 billion, while the local government councils received N65.593 billion,” it stated.

The statement further showed records of an increase in companies’ income tax (CIT) and value-added tax (VAT), while petroleum profit tax (PPT) and oil and gas royalties clearly decreased. Also, it was recorded that import and excise duties decreased marginally.

It explained that the Federal government got N2.461 billion from the total exchange gain revenue of N5.148 billion; states received N1.248 billion; local government councils received N0.962 billion while N0.477 billion was shared to oil-producing states as 13 percent derivation revenue.

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Banking Sector

Fidelity Bank Enriches Customers, Holds Second Draw of GAIM 5 Promo

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Fidelity Bank

Leading African financial institution, Fidelity Bank PLC, has announced the second set of millionaires in its Get Alert in Millions Season 5 promo (GAIM 5) which held recently in Victoria Island, Lagos.  

The event was witnessed by representatives of regulatory organisations which include: Ms Oyinkan Kusamotu, Senior Legal Officer, Lagos State Lotteries & Gaming Authority; Mr Tanko Mohammed, Head, Monitoring & Enforcement, Lagos State Lotteries and Gaming Authority; Mrs Susie Onwuka, Head, Lagos Office, Federal Competition & Consumer Protection Commission (FCCPC) and Ms Chioma Amanoh, Lagos Office, National Lottery Regulatory Commission (NLRC).

Since the commencement of the fifth season of the promo in November 2021, the bank has enriched over 460 customers with various cash prizes. So far, 10 lucky customers have been rewarded with a million naira each. This month, Fidelity Bank has continued its tradition of rewarding loyal customers which has seen Ajoma Rachel, Stanley Sunday, Musbahu Kabiru, Usman Abdulkadir, John Uchechukwu, Oluwatayo Oladipupo, Esther Eloho, Sophia Sefera, Amarachi Sarah Anyacho, and Obi Chinelo emerge as the next set of millionaires in the promo.

Commenting on the event, Dr. Ken Okpara, Executive Director overseeing the Bank’s Lagos and Southwest Directorate, stated that, “As a bank that places our customers at the centre of everything we do, we are always looking for opportunities to help our customers grow. Two months ago, we kicked off the GAIM 5 promo to reward our customers and demonstrate our commitment to improving their lives and wellbeing. Today, we are excited at how happy we have made some of our most loyal customers. We remain committed to providing rewarding experiences and best-in-class services for our clients.”

Also speaking at the event, the Divisional Head, Product Development, Osita Ede stated that: We have earmarked the sum of N125million for total cash rewards this season which we would be giving out in weekly, monthly and grand draws till the campaign ends in July 2022. We encourage our customers to save up to increase their chance of winning and those yet to open an account to do so today. At the end of the campaign season, we want to celebrate customers who make savings second nature.

Fidelity Bank is a full-fledged commercial bank operating in Nigeria, with about 6million customers who are serviced across its 250 business offices and digital banking channels. The bank is known for exceptional customer service and digital innovation.

L-R: Tanko Mohammed, Head, Monitoring & Enforcement, Lagos State Lotteries and Gaming Authority; Osita Ede, Head, Product Development, Fidelity Bank Plc; Cynthia Ogbonna, Team Lead, Brand Management, Fidelity Bank Plc; Meksley Nwagboh, Divisional Head, Brand & Communications, Fidelity Bank Plc; and Susie Onwuka, Head, Lagos Office, Federal Competition & Consumer Protection Commission (FCCPC); at the second month draw of the Get Alert in Millions Season 5 (GAIM 5) Savings Promo held in Lagos on Thursday

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Loans

Loan Default: AMCON Takes Over IBEDC

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AMCON

Further to the judgment of the Federal High Court on the 8th of September 2021, the Asset Management Corporation of Nigeria (AMCON) has announced its takeover of the Ibadan Electricity Distribution Company (IBEDC).

This is following the electricity distribution company’s default in a loan servicing agree­ment executed with Polar­is Bank.

“AMCON has been ap­pointed receiver/manager over all the Assets of In­tegrated Energy Distribu­tion and Marketing Lim­ited as stipulated in the instruments executed in favour of AMCON by vir­tue of the Loan Purchase and Limited Servicing Agreement executed with Polaris Bank Limited dat­ed 30th November 2018 and a Notice of Appointment of the Receiver/Manager dated August 6th, 2021, which was duly stamped by the Commissioner for Stamp Duties”, a statement from AMCON reads.

AMCON further revealed that it has appointed Osayaba Giwa-Osagie to take over the entire undertakings on the IBEDC, including the assets, shares and interests in related companies and entities, and also monies kept in any of the 25 banks in Nigeria.

Investors King gathered that AMCON’s takeover might also not be unconnected to some crisis inside the power company, a development which has reportedly affected its ser­vice delivery to customers.

IBEDC’s Chief Operating Officer (COO), Engineer John Ayodele however allayed the fears of the IBEDC staff.

“I hereby wish to inform all staff that there is no cause for alarm. We are assured of job security which entails our position/duties in the company, being entitlements to our salaries and other benefits etc.”, he said.

Investors King recalls that the IBEDC, during a stakeholders’ meeting in May 2021 had disclosed that it secured N4.2billion from the Central Bank of Nigeria (CBN) to improve power supply to its numerous customers in Ogun State.

According to Ayodele, the facility would be channelled into building lines to improve power/electricity supply to the communities. He had also revealed that 80 percent of the money collected by IBEDC goes for other services, adding that the company has lost over N3billion in estimated billing.

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