Connect with us

Finance

VAT War: Businesses To Remit To An Escrow Account Pending Final Judgment

Published

on

Value added tax - Investors King

The Organised Private Sector (OPS) may be considering withholding remittances of the Value Added Tax (VAT) to the collecting agency following the controversy over who has the right to collect the consumption tax.

It would be recalled that the Rivers State government obtained a judgment from a Federal High Court in Port Harcourt granting the state power to collect VAT and income tax against the prevailing norm of the consumption tax collection by the Federal Inland Revenue Service (FIRS).

Lagos State also followed Rivers State by enacting its own VAT Law. Since then, some states had also expressed their readiness to also enact laws to enable them to start collecting VAT as well.

But the FIRS last week obtained a ruling of the Appeal Court asking all parties to the issue to maintain status quo ante, which has been interpreted by parties concerns in the case in various ways to suit their position.

However, representatives of the OPS which included the Lagos Chamber of Commerce (LCCI), the Nigerian Employers’ Consultative Association (NECA) and the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) have called on the federal government to act fast in addressing the raging VAT controversy between the FIRS and some state governments.

The Director-General of the NECA, Timothy Olawale, said businesses should not remit their VAT until the matter is finally dealt with in the court of law.

“In this regard, an employer (business firm) can open an Escrow Account for the money, which must be different from other accounts of the company.

“This should be remitted upon the final judgment of the court, as it appears that the case could get to the Supreme Court,” adding that “the FIRS and the states’ Inland Revenue Services should be notified of this development officially,” Olawale was quoted by THISDAY as saying.

He said the concern of businesses, “is basically who to remit deducted VAT to due to the pending appeal in order to avoid penalties and double payment.”

He also advised that firms could, “approach the court by way of interpleader proceedings to determine to who they should remit the deducted VAT.”

An interpleader, according to Olawale, “is a process whereby somebody in possession of anything i.e. money, properties, etc, and he is not the owner. But two or more people are laying claim to that money or property. The person in possession approaches the court to determine who that money or property should be given to or how it should be handled or what should be done.

The Director-General of NACCIMA, Ayo Olukanni said that “the contention over VAT has introduced uncertainty into the business space and it is our hope that it will be resolved definitively and quickly.”

Similarly, the Director-General of LCCI, Chinyere Almona, stated that the first concern of the chamber, “is the confusion that businesses face as to who is in charge of VAT collection. This is not healthy for the business community and planning.”

Almona stated that businesses should not be subjected to unnecessary hurdles and made to pay the same tax twice from different agencies and urged “the federal government to urgently establish an understanding with states on what is best for the nation and businesses.

She noted that VAT was introduced in 1993 to replace the sales tax in the states. With an initial sharing formula original formula allocated 50 percent to the federal government, 35 percent to the state governments, and 15 percent to local governments.

But this was altered in January 1999 when the formula was adjusted to be 15 percent to the federal government, 50 percent to state governments, and 35 percent to local government.

“Presently, the states and local governments share their allocations using the factors of equality 50 percent; population 30 percent and derivation 20 percent.

“We advise that the current sharing formula for the states and local governments be adjusted using the factors of equality 20 percent, population 30 percent, and derivation 50 percent going forward. This arrangement should be agreeable to all concerned parties.

“This can drive innovation on revenue generation in all the states towards increasing their internally generated revenue. It will also make the states more sensitive to the needs of businesses in their respective States, knowing that an enabling business environment is likely to boost tax revenues,” Almona said.

Continue Reading
Comments

Finance

Unity Bank Partners RIFAN Mega Rice Pyramid Display, Pledges More Support for Farmers

Published

on

Unity bank - Investors King

Agric-focused lender, Unity Bank Plc has partnered Nigerian rice farmers under the aegis of Rice Farmers Association of Nigeria, RIFAN to unveil a mega rice pyramid on the occasion of the National Rice Festival held in the Federal Capital Territory, Abuja on Tuesday.

The event, which coincided with the flag-off of the dry season farming, was used to showcase the gains produced by rice farmers in driving self-sufficiency in rice production through the Central Bank of Nigeria’s Anchor Borrowers Programme, ABP.

Speaking to newsmen at the event, the Managing Director/Chief Executive Officer of Unity Bank, Mrs. Tomi Somefun, while going down memory lane on the support of the rice farmers by the Bank since the inception of the Anchor Borrowers Programme, ABP commended the rice farmers for their unwavering belief and collaboration in the implementation of the intervention programme, adding that as the PFI (Preferred Financial Institution) for the ABP transactions, the Bank will continue to support the farmers and ensure that more smallholder farmers get the requisite financial support to boost rice production.

She said: “Our strategic partnership with RIFAN started in 2018 when we financed about 273,000 smallholder farmers. This was the largest single-ticket transaction in that year. This financing cut across 33 states of the Federation including the FCT.

“In 2019, the Bank increased the tally by financing another 146,810 smallholder farmers for the wet and dry season farming. This funding cut across 35 States of the Federation including the Federal Capital Territory (FCT).

“Additional funding was granted to finance additional 221,450 smallholder farmers of the Association across the 32 states of the Federation including FCT for the wet season and additional 300,000 hectares was financed in sixteen states for the 2020 dry season cropping season.

“As of March 2021, the Bank has financed no fewer than 190,000 smallholder rice farmers across 35 states including the FCT, Abuja.”

Speaking further, she said: “The rice pyramids we see here today is an example of the resilience of the farmers and should be replicated in all states with a focus on the crop they have a competitive advantage.

“As we gear the programme towards deepening its penetration to reach more farmers, we encourage all beneficiaries of the Intervention Programme to always utilize the inputs judiciously in order to key into Federal Government’s goal of attaining food sufficiency, diversification of the economy from oil, job creation for the teeming youth and poverty reduction”.

“We remain optimistic that RIFAN under the able leadership of the National President, Aminu Goronyo, will continue to engage its members to drive higher performance under the ABP.”

Through the strategic initiative of the ABP, Nigeria has made incredible gains in rice production over the past six years raising production to significant levels.

Official reports show that from an average yield of 1.8 metric tonnes per hectare in the pre-ABP era, the initiative has increased the country’s average yield per hectare for rice paddy and maize to about five metric tonnes per hectare.

Similarly, the average capacity utilisation per annum of domestic integrated rice mills has jumped to 90 per cent, from the 30 per cent that was the case in the era preceding the advent of the ABP.

Statistics show that there has been a significant reduction in the country’s rice import bill, from a monstrous $1.05 billion prior to November 2015, to the current figure of $18.50 million, annually. The programme has also created an estimated 12.3 million direct and indirect jobs across the different value chains and food belts of the country.

Continue Reading

Finance

Consumer Loans Hit N2trn, CBN Attributes Rise to Improved Credit Appraisal by Banks

Published

on

bank loans

The Central Bank of Nigeria, CBN has disclosed that the volume of consumer loans has risen to two trillion naira as recorded in October, 2021.

It stated that the increase has been persistent since last year, rising by 37 percent, year-on-year, YoY. In October, 2020, the value of consumer loans recorded was N1.47 trillion.

CBN, however, attributed the increase to improved credit appraisal and the various products offered by banks and other lenders in rendering their services.

The CBN data stated that, “monthly economic report for October, 2021, showed that the growth in consumer loans was driven by a 52 per cent, YoY increase in personal loans, which rose to N1.57 trillion in October 2021. 

“Consequently, the share of personal loans in the total consumer loans basket rose to 78 per cent in October 2021 from 70.4 per cent in October 2020.”

On the month-on-month (MoM) record, consumer lending moved from N1.94 trillion in September 2021 to N2 trillion in October 2021– an increase of 3.4 per cent.

The CBN noted that the continuous growth in personal loans increased consumer credit outstanding. The personal loans are from credit appraisal and diverse products by banks. 

“Total consumer credit extended by the Other Depository Corporations (ODCs) grew by 3.4 per cent to N2,009.88 billion at the end of October 2021, from N1,942.87 billion at the end of September 2021. 

“The ratio of consumer credit to the total credit to the private sector in October 2021 was 8.7 per cent, the same share as in the preceding month. 

“A disaggregation of consumer loans revealed that personal loans maintained their dominance, accounting for 78.0 per cent, increasing by 2.3 percentage points, above the level in the preceding month, while retail loans accounted for the balance of 22.0 per cent,” the CBN data stated.

Continue Reading

Banking Sector

We Are Not Affiliated With Access Capital Investment Platform, Access Bank Warns

Published

on

Access bank

The management of Access Bank Plc has issued a disclaimer in respect of the Access Capital Investment Platform which has been circulating.

The bank, which dissociates itself and its subsidiaries from the investment platform noted that the online investment entity has been soliciting members of the public to invest in its Access Capital Investment products promising mouth-watering returns on investment.

“By this disclaimer, Access Bank Plc wishes to dissociate itself, affiliates, subsidiaries and/or proxies from the activities, contract, claims or business engagements of Access Capital Investment Platform”, the bank said.

The bank further stressed that “Access Capital Investment Platform is not an affiliate nor subsidiary of Access Bank Plc and it would be at the risk of anyone who invests in any of the Access Capital Investment packages/products, as Access Bank Plc would not be responsible for any loss, damages, refund whatsoever that may arise therefrom”.

According to Access bank, relevant law enforcement and regulatory agencies have been notified of this disclaimer.

Investors King reports that there are lots of fake investments platforms in Nigeria. These platforms offer unsuspecting members of the public investments return that are too good to be true.

Most times, they offer fake – but often convincing – opportunity to make a profit after they hand over a sum of money. They pretend to be representing a legitimate and trusted investment group and pressurize their victims into making a rushed decision.

Usually, these fraudsters use platforms such as Facebook, Instagram and Twitter to lure people into investing in cryptocurrencies, foreign exchange and binary options and often have convincing social media profiles or websites with fake reviews. Some of them even pay people to write fake reviews for them.

Recall that Investors King had earlier reported that the Minister of Humanitarian Affairs, Disaster Management and Social Development, Hajiya Sadiya Umar Farouq warned the beneficiaries of the N-Power scheme not to participate in any unverified investment scheme.

She had noted, in a statement, that the ministry is aware of the current fraudulent investment scheme trending on social media and therefore, urged N-power beneficiaries not to fall victim.

Continue Reading
Advertisement




Advertisement
Advertisement
Advertisement

Trending