Finance

How Cashless Policy Will Prevent Nigerians From Evading Tax – Expert

Published

2 years ago

February 14, 2023

As more money has been deposited into the vaults of the nation’s commercial banks by Nigerians in obedience to the directive of the Central Bank of Nigeria (CBN), an expert has said that it would be difficult for traders and business owners to escape paying their taxes.

The expert, who is the Head of Global Markets at Parthian Partners, Ronke Akinyemi said the naira redesign policy, has prompted a rise in digital banking, adding that it would promote tax inclusion and efficiency in the country.

Investors King had reported that the CBN in a view to mopping up larger Nigerian currency which is said to have been hoarded by some individuals and bringing same to the banks’ vaults, had brought up redesigning of the N1000, N500 and 200 denominations.

Accordingly, the apex bank announced that Nigerians should return the old notes so as to give way for the redesigned ones to be in circulation.

Though, CBN has miserly released the new notes, a situation that has subjected Nigeria to a cash crunch and caused citizens woes, the expert noted that the internally generated revenue base of the country would grow once the tax collection strategy is strengthened.

For Akinyemi, while speaking at the bi-monthly forum of the Finance Correspondents Association of Nigeria (FICAN) in Lagos, the paucity and control of naira in public would make more of the currency to be domiciled in banks’ vaults so as to the country to know how much each business owner has and thus determine the prompt payment of tax from affected individuals.

Aside from checkmating corruption and strengthening the economy, the expert said the naira redesign coupled with the cashless policy of the CBN is expected to see more naira move from private hands into the banking vaults ad thus promoting better monitoring from concerned authorities.

According to her, following the policy, it is expected that there will be increased remittances from government-owned enterprises.

She also noted that abundance of cash in banks would improve tax administration, adding that should the nation eventually transit to a full cashless economy, more money will be in the bank and that the banks would have an idea of who owns what and it will be easier for the tax collectors to go after those who have not been paying tax on who has been evading tax.

She said people have been evading tax because majority of their money has been in their hands but now that the better part of their money is in the bank, it would be easily for tax to be collected.

If tax is remitted as and when due, the expert noted that the nation’s economy would grow faster and that government would have more revenue for infrastructural development.

It could be recalled that the governor of the CBN, Mr. Godwin Emefiele had in a press conference in Lagos recently also alluded to the cashless policy enhancing tax collections and improving the nation’s revenue base.

Emefiele had noted that the short-term decline in cash holding and the increased formalization of business activities as the cashless policy forces more economic agents to open bank accounts, will also boost fiscal policy.

According to him, with more transactions going through e-channels and bank accounts, more agents come within view of the government’s tax net and that it would enlarge the base of taxable activities and increases the possibility of more tax receipts by various tiers of government.

Emefiele said the new policy would reduce tax evasion, saying that experiences from other jurisdictions have shown, effective currency redesign can support regulatory reform, increased legislative reach and coordinated fiscal and structural policies.

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Banking Sector

UBA Grows Interest Income Jump by 169% to N1.799 Trillion

Published

10 hours ago

October 21, 2024

Samed Olukoya

United Bank for Africa, Nigeria’s leading financial institution with operations across the African continent, on Monday reported a 169.9% jump in interest income from N666.291 billion recorded in the first nine months of 2023 to N1.799 trillion in the nine months through September 2024.

In the financial statement obtained by Investors King, the lender’s interest expense inched slightly higher to N695.571 billion, 211.6% from N223.209 billion filed in the corresponding period of 2023.

Growth was broad-based as net interest income rose by 149% from N443.082 billion in 2023 to N1.103 trillion in 2024 while net fee and commission income stood at N233.853 billion, up 105% from N114.286 billion in 2023.

The bank’s total non-interest income moderated slightly to N435.840 billion. However, operating income improved by 51.25% from N1.017 trillion to N1.539 trillion.

Similarly, net operating income after impairment loss on loans and receivables appreciated 62.16% to N1.416 trillion.

Profit before tax rose by N101.392 billion to N603.483 billion in September 2024.

Speaking on the strong performance of the company in the first half (H1) of the year, Oliver Alawuba, the Group Managing Director/CEO said as of H1 2024, which constitutes the majority of the current performance, the economic environment remained challenging across the regions where we operate.

High inflation, rising debt levels, increasing interest rates, and tighter monetary policies have created significant pressure on economies globally. Despite these headwinds, our Bank has demonstrated resilience.

In H1 2024, UBA Group delivered strong double-digit growth across high-quality and sustainable revenue streams. This performance reflects our disciplined execution of strategic goals, focusing on balance sheet expansion, transaction banking, and digital banking businesses across our markets.

Profit before Tax: We achieved a robust Profit Before Tax of N401.6 billion, reflecting our ability to manage risks effectively amidst macroeconomic volatility.
Customer Deposits: Our deposits grew by 34%, from N17.4 trillion at year-end 2023 to 2 trillion in H1 2024, demonstrating the trust and loyalty of our customers.
Total Assets: We saw a 37% growth in total assets, reaching N28.3 trillion, up from N20.7 trillion at FYE 2023. This growth was driven by strong customer relationships and our ability to capitalize on opportunities across geographies.
Net Interest Income: Our intermediation business posted impressive growth, with net interest income expanding by 143% year-on-year to N675 billion, further underlining the strength of our core banking operations.
Digital Banking & Payments: Digital Banking income surged by 107.8% YoY to N106 billion, while funds transfer and remittance fees rose 188.7% and 228%, respectively. We continue to lead in digital banking and payment solutions, helping drive financial inclusion across Africa.
Trade Facilitation: Income from trade transactions grew 83% to N18 billion as we strengthened our role in facilitating intra-regional and international trade.

Our strategy of investing in technology, innovation, and data analytics continues to yield significant returns, positioning us as a leader in digital transformation.

Finance

FAAC Distributes N1.298trn to FG, States, LGCs

Published

3 days ago

October 18, 2024

Iyanuoluwa Martins

The Federal Accounts Allocation Committee (FAAC) has shared N1.298 trillion among the Federal Government, states, and Local Government Councils (LGCs) from the revenue of September 2024.

A communique issued at the end of FAAC meeting for October held on Thursday in Abuja said N1.298 trillion total distributable revenue comprised distributable statutory revenue of N124.716 billion, and distributable Value Added Tax (VAT) revenue of N543.518 billion.

It also comprised Electronic Money Transfer Levy (EMTL) revenue of N18. 445 billion, Exchange Difference revenue of N462.191 billion and Augmentation of N150.000 billion.

It said that a total revenue of N2.258 trillion was available in the month of September.

“Total deduction for cost of collection was N80.993 billion, while total transfers, interventions and refunds was N878.946 billion,” it said.

According to the communiqué, gross statutory revenue of N1.043 trillion was received in September 2024, which was lower than the sum of N1.221 trillion received in August by N177.426 billion.

It said that gross revenue of N583.675 billion was available from VAT in September, higher than the N573.341 billion available in the month of August by N10.334 billion.

“From the N1.298 trillion total distributable revenue, the Federal Government received a total sum of N424.867 billion, and the state governments received a total sum of N453.724 billion.

“The LGCs received a total sum of N329.864 billion and a total sum of N90.415 billion (13 per cent of mineral revenue) was shared to the benefiting states as derivation revenue,” it said.

On the N124.716 billion statutory revenue, the communiqué said that the Federal Government received N43.037 billion and the state governments received N21.829 billion, while the LGCs received N16.829 billion.

It said that the sum of N43.021 billion (13 per cent of mineral revenue) was shared to the benefiting states as derivation revenue.

“From the N543.518 billion VAT revenue, the Federal Government received N81.528 billion, the state governments received N271.759 billion and the LGCs received N190.231 billion,” it said.

It said that in September, Oil and Gas Royalty, Excise Duty, EMTL and CET Levies increased considerably while VAT and Import Duty increased marginally.

It added that Petroleum Profit Tax (PPT), Companies Income Tax (CIT) and others recorded significant decreases.

Finance

Former AGF, EFCC Opt For Plea Bargain Settlement in Alleged N1.6bn Fraud Case

Published

6 days ago

October 15, 2024

Ugwoke Ogbodo

The Economic and Financial Crimes Commission (EFCC) has informed a Federal High Court sitting in Abuja of its plan to settle out of court in a subsisting N1.6 billion fraud matter against a former acting Accountant-General of the Federation (AGF), Anamekwe Nwabuoku, pending before the court.

Counsel to the anti-graft body, Ogechi Ujam, informed the presiding judge, Justice James Omotosho upon resumed hearing on Monday of its resolve to opt for plea bargain agreement with the defendant.

When the matter was called, Ujam told the court that on the last adjourned date, Nwabuoku and his co-defendant, Felix Nweke, had submitted proposal for settlement out of court.

She said the parties in the charge had agreed and that the agreement had been submitted to the EFCC’s Chairman, Ola Olukoyede, for approval.

The lawyer to the EFCC then asked the court for a date to file the agency’s plea bargain agreement and amend the charge of the defendants.

In the same vein, Nwabuoku’s lawyer, Isidal Udenko, and Emeka Onyeaka, who represented Nweke, also admitted opting for a plea bargain.

Justice Omotosho subsequently adjourned the matter till December 2 for the adoption of a plea bargain agreement.

Recall that the anti-graft agency had preferred an 11-count money laundering charge against the duo.

Nwabuoku and Nweke, a former Deputy Director in the Ministry of Defence, are being prosecuted for alleged money laundering offences to the tune of N1.6 billion.

While Nwabuoku is the 1st defendant in the charge marked: FHC/ABJ/CR/240/24 dated May 20 and filed May 27 by Ekele Iheanacho, Nweke is the 2nd defendant.