- ABCON Seeks Rate Review, VAT Exemption for BDCs
The Association of Bureaux De Change Operators of Nigeria (ABCON) yesterday asked the Central Bank of Nigeria (CBN) to review the rate at which dollars are sold to bureau de change (BDCs) to enable the operators compete favourably with commercial banks.
ABCON President, Aminu Gwadabe spoke during the official launch of www.naijabdcs.com meant to bring about price discover and transparency in the foreign exchange market. The portal launch was attended by representatives of the CBN, commercial banks, Economic and Financial Crimes Commission, Nigeria Financial Intelligence Unit, Travelex, over 3,500 BDC operators among others.
Gwadabe said: “The BDC sector is confronted with many challenges such as multiple exchange rate, abnormal bank charges, Value Added Tax (VAT) and Commission on Turnover (COT), parallel market operators and illegal International Money Transfer Operators (IMTOs), porous international boarders, complex documentation requirements and poor capacity/ skills of operators”.
Continuing, he said: “For instance, the increasing difficulties arising from over regulation and complex documentation requirements that licensed BDC operators are facing in carrying out their daily legitimate operation remain worrisome. These hitches have negative impact on BDCs’ efforts toward compliance to statutory and regulatory requirements. For instance, six units within the CBN are involved with BDC regulations, supervision, licensing, monitoring, saying this constitutes multiple regulation of a unit of the financial sub-sector that is only involved as a small market player”.
He said a BDC operator is expected to render daily, monthly, quarterly, half yearly and annual returns to these various departments of the same corporate body, which could be very cumbersome, repetitive and time consuming for both the operator and the regulator.
“ABCON is therefore using this opportunity to appeal to the CBN to take urgent steps to review the rate at which the dollar is sold to BDCs in order to boost ongoing recovery of the naira against dollar.
Obviously, the BDC business has been badly affected by “uncompetitive rate as the CBN sells dollars to BDCs at higher rate compared to what it sells to commercial banks, yet both institutions target the same market segment and customers. The BDCs buy dollar from the International Money Transfer Operators (IMTOs) at N360/$1 and sell to end users at N362/$1 while the CBN sells to commercial banks at N358/$1 and the banks sell to end users at N360/$1,” he said.
He urged the CBN to review BDC rate to align with that of the banks since both sectors serve the same customers. “We also want the CBN to grant ABCON proposed trading platforms approval in principle. This will give ABCON and its technology partners the boost needed to kick-start the project. We also appeal to the CBN to issue Letter of Consent to our proposed training institute. This is going to be a boost to the current ABCON Management commitment to capacity building of its members which boost competency in the sector,” Gwadabe said.
The ABCON boss also want the apex bank to make BDC transactions Value Added Tax (VAT) and Commission on Turnover (COT) exempt, reduce BDCs licence renewal payments and also expand beyond scope of transactions.
Also speaking, former ABCON President, James Tifashe, said the group has all it takes to make the portal to be a leading voice in the reporting of financial markets. “The launch of www.naijabdcs.com is a great step in the right direction and ABCON should be commended,” he said.