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.
Foreign Exchange: First Bank to Discontinue Dollar Transactions on Naira Card
First Bank of Nigeria has announced that international transactions on its naira MasterCard will be suspended, Starting from 30th, September 2022
First Bank of Nigeria has announced that international transactions on its naira MasterCard will be suspended, Starting from 30th, September 2022.
In a recent email that First Bank sent to its customers, the bank stated customers will no longer be able to perform international transactions on First Bank Naira credit card, virtual card and visa prepaid card.
The message read, “Due to current market realities on foreign exchange, you will no longer be able to use the Naira Mastercard, Naira Credit Card, our Virtual card and Visa Prepaid Naira card for international transactions. This will take effect on 30 September 2022,” First Bank said.
The message added that customers can only use their multicurrency and other permitted cards to make international transactions.
“Please use your Visa Debit Multicurrency Card, Visa Prepaid (USD) Card and Visa Gold Credit Card to continue transacting abroad with limits of up to $10,000.” The statement concluded.
It could be recalled that in July 2022, Standard Chartered Bank also suspended international transactions on its naira visa debit card.
Other banks that have suspended international transactions on naira cards include Flutterwave, Eversend and other financial technology platforms.
Investors King had earlier reported that Nigerian banks have reduced international transactions to $20 on Naira cards due to the ongoing foreign exchange scarcity in Nigeria.
The reduction started in 2020 from $500 to $100 in 2021. In March 2022, many of the financial institutions subsequently reduced international transactions on naira cards to $20.
At the 364th Bankers Committee Meeting in Abuja in 2021, the CBN Governor, Godwin Emefiele disclosed that the apex bank will stop supplying foreign currency to Deposit Money Bank (DMBs) otherwise known as commercial banks by the end of the year. He, therefore, urges them to source for their foreign exchange from export proceeds.
FG Plans to Borrow to Finance 2023 Budget as Debt Profile Hits N42.84 Trillion
Nigeria’s total public debt stock is now N42.84 trillion, or $103.31 billion as of June 2022
With the drop in oil production and Nigeria’s revenue generation, Nigeria’s public debt is projected to increase further in 2022 and 2023.
According to the Debt Management Office (DMO), Nigeria’s total public debt stock is presently N42.84 trillion, or $103.31 billion as of June 2022.
As of March 2022, Nigeria’s total debt profile was N41.60 trillion or $100.07 billion. This shows an increase of N1.24 trillion in three months.
Investors King learnt from the statement published on the DMO website on Tuesday that the total debt represents the domestic and external debt stocks of the federal government, the 36 states and the Federal Capital Territory (FCT).
The statement further clarified that the foreign component of the debt stands at N16.61 trillion, or $39.96 billion, the same figure it was in March 2022. While the local component increased to N26.23 trillion or $63.24 billion.
The statement also disclosed that a higher proportion (58 percent) of the external debts were concessional and semi-concessional loans which the government obtained from multilateral financial institutions such as the International Monetary Fund (IMF), the World Bank, Afrexim and African Development Bank.
These concessions and semi- concessions include loans from bilateral lenders such as Germany, China, Japan, India and France,”
Meanwhile, the increase in domestic debt stock from N24.98 trillion or $60.1 billion in March to N26.23 trillion or $63.24 billion in June was due to the credit facilities which the Federal Government raised to part-finance the deficit in the 2022 budget.
Nigeria’s rising debt profile has been a major subject of discussion among analysts. Investors King earlier reported that the 2023 budget proposal has a deficit of more than N12 trillion which will likely be financed by another set of borrowings and subsequently increase the country’s debt profile.
Nevertheless, the Debt Management Office, however, stated that Nigeria’s Debt-to-GDP ratio remains under control at 23.06 percent, Nigeria’s self-imposed limit of 40 percent.
Prudential Zenith Life Insurance Grows Profit After Tax by 75 in 2021
Prudential Zenith Life Insurance Limited grew profit after tax by a whopping 75% to ₦1.13 billion, up from ₦646 million recorded in 2020.
Despite rising economic uncertainties and the challenging business environment experienced in 2021, Prudential Zenith Life Insurance Limited grew profit after tax by a whopping 75% to ₦1.13 billion, up from ₦646 million recorded in 2020.
The company disclosed this in its audited financial statement for the period ended December 31, 2021, and obtained by Investors King on Monday.
In the financial statement approved by the National Insurance Commission (NAICOM), Gross Written Premium (GWP) and Annualized Premium Equivalent (APE) expanded by 16.3% and 9.3%, respectively. This was a result of the 27% growth recorded in new business acquisition for Group Life written during the period.
Similarly, investment income grew by 30% year-on-year due to a significant increase in the interest-generating assets of the company, and commission income also increased by 43% during the period.
The financial performance is a testament to the continued focus on investments, as the company remains committed to building a strong market-leading position in Nigeria by enhancing its capabilities, strengthening its digitally enabled multi-channel distribution network, and broadening the range of products and services that are available to customers in order to meet their needs.
Despite the challenges experienced during the Covid-19 pandemic in 2020, Prudential Zenith was able to achieve this strong growth in 2021 and is poised to continue improving its performance in the upcoming financial years. Prudential Zenith will continue to develop and launch unique products to meet customers’ needs, leveraging technology and its core corporate governance structure to deliver faster claims settlement. The company will also continue to prioritize the health, safety, and welfare of customers, who subscribe to its unique insurance product offerings.
Prudential Zenith Life Insurance Ltd (PZL) is a subsidiary of Prudential Plc., established in 2017 when Prudential Plc acquired a 51% holding in Zenith Life Insurance. PZL is one of the most capitalized companies in the Nigerian insurance industry with a wide range of individual products including savings & investments-linked products, endowment, and protection products designed to meet the needs of individuals and their families. For corporate clients, the company’s product offerings include Group Life, Key-Man Assurance, Credit Life, School Fees Protection, and Mortgage Protection, ensuring that the welfare of clients’ staff and families are met.
Prudential Plc provides life and health insurance, and asset management in Africa and Asia, helping people get the most out of life by making healthcare affordable and accessible and by promoting financial inclusion. Prudential protects people’s wealth, helps them grow their assets, and empowers them to save for their goals. It has more than 19 million life customers and is listed on stock exchanges in London (PRU), Hong Kong (2378), Singapore (K6S), and New York (PUK).
Prudential Plc has insurance operations in eight countries in Africa: Nigeria, Cameroon, Cote d’Ivoire, Ghana, Kenya, Togo Uganda, and Zambia. With over 1 million customers, Prudential Africa works with over 11,000 agents and six exclusive bank partnerships, with access to over 600 branches to bring value-added insurance solutions to its customers.
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