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Governors Sue Nigerian Govt Over Stamp Duties

Governors sue Nigerian govt

Governors sue Nigerian govt over stamp duties, demand remittance of N176bn collected in five years

The governors of the 36 states in Nigeria have dragged the Federal Government to the Supreme Court over alleged non-remittance of funds generated as stamp duties from the states.

In the suit marked SC/CV/690/2021 filed on August 24 by their attorneys-general, the states argued they have the sole authority to collect stamp duties and not the federal government.

They asked the court to mandate the federal government to pay N176 billion as the backlog of stamp duties collected from 2015 to 2020.

The Attorney-General of the Federation and Minister of Justice, Abubakar Malami, was listed as a respondent in the suit.

The Rivers and Lagos State governments had recently initiated the processes for the collection of Value Added Tax (VAT) in their domains.

The states asked the apex court to determine among others; “Whether or not having regard to the mandatory provisions of Section 4(2) of the Stamp Duties Act Cap. S8 Laws of the Federation of Nigeria (LFN), the plaintiffs (all the state attorneys) are not the sole authority to administer and collect stamp duties on all transactions involving individuals/persons within their respective states?

“Whether having regard to the provisions of Section 4(2) of the Stamp Duties Act Cap. S8 of the Laws of the Federation of Nigeria read in conjunction with the provisions of Section 163, items 58 and 59 of the Second Schedule part I and items 7 (a) and (b) of the second Schedule part II and other provisions of the Constitution of the federal republic of Nigeria, 1999 (as amended), the defendant (Malami) could claim, retain, distribute, or in any other manner deal with the monies or sums collected as stamp duties on individual persons transactions within the respective states of the plaintiffs without reference to, the concurrence of, input, or agreement of the plaintiffs?

“Whether or not they are entitled to 85% of all stamp duties collected on electronic money transfer levy, on electronic receipts or electronic transfer for money deposited in deposit money banks and financial institutions, on any type of account to be accounted for and expressed to be received by the person to whom the transfer or deposit is made in the plaintiffs’ respective states.”

No date has been fixed for hearing of the suit.

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CBN gives fresh guidelines on dormant accounts, unclaimed balances in banks

The Central Bank of Nigeria, CBN, has directed all banks and other financial institutions in the country to transfer all dormant accounts and unclaimed balances and other financial assets to its dedicated account.

The apex bank disclosed this on Friday in a guideline on the management of dormant accounts, unclaimed balances signed by its acting director of the Financial Policy and Banking Regulation Department, John Onojah.

According to the circular, all dormant accounts and unclaimed balances with banks for at least ten years will be warehoused in a dedicated account known as the Unclaimed Balances Trust Fund (UBTF) Pool Account”.

Accordingly, CBN said the funds from Dormant Accounts, unclaimed balances may be invested in Nigerian Treasury Bills (NTBs) and other government securities.

However, the new Guideline which is a review of the Guideline issued in October 2015 exempted dormant accounts, and unclaimed balances under litigation and investigation.

“CBN shall treat unclaimed balances (dormant accounts and financial assets) as follows:

“Open and maintain the ‘UBTF Pool Account’; Maintain records of the beneficiaries of the unclaimed balances warehoused in the UBTF Pool Account;

“Invest the funds in Nigerian treasury bills (NTBs) and other securities as may be approved by the ‘Unclaimed Balances Management Committee’;

“Refund the principal and interest (if any) on the invested funds to the beneficiaries not later than ten (10) working days from the date of receipt of the request and where it is imperative to extend the timeline, a notice of extension shall be communicated to the requesting FI stating reasons for the extension,” it said.

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CBN’s decisive actions has strengthen the economy- Cardoso

The Central Bank of Nigeria (CBN) said in Abuja on Friday that its monetary policies and actions have stimulated growth and stability of the nation’s economy.

 

CBN Governor, Mr. Olayemi Cardoso, said this during an engagement with Senate Committee on Banking, Insurance and other Financial Institutions.

Cardoso said that given the positive indicators, Nigerian were in for better days.

He said: “The spread between official and BDC rates has narrowed significantly from N162.62 in January to N47.22 in June indicating successful price discovery, increased market efficiency and reduced arbitrage opportunities.

“The stock of external reserves increased to 36.89 billion dollars as of July 16, compared with 33.22 billion dollars as at end-Dec 2023, driven largely by receipts from crude oil related taxes and third-party receipts.

“In first quarter 2024, we maintained a current account surplus and saw improvements in our trade balance.

According to him, the nation’s external reserves level as at end of June can finance over 11 months of importation of goods and services or 14 months of goods only.

Cardoso said this was significantly higher than the prescribed international benchmark of 3.0 months, indicating a strong buffer against external shocks.

He said that the banking sector remained robust and diverse, comprising 26 commercial banks, six merchant banks and four non-interest banks.

“Key indicators such as capital adequacy, liquidity, and non-performing loan ratios all showed impressive improvements, underscoring the sector’s growing stability and resilience.

“The equity market has shown impressive performance, with the All-Share Index rising by 33.81 per cent and market capitalisation expanding by 38.33 per cent from Dec 2023 to June 2024, reflecting growing investors’ confidence,” he said.

Cardoso said that while CBN was encouraged by these positive trends, it remained vigilant and committed to implementing policies that support sustainable growth in the financial markets, while maintaining overall economic stability.

He also assured  members of the committee that required measures and strategies had been mapped out to confront emerging challenges.

“To combat inflation, we have implemented a comprehensive set of monetary policy measures.

“These include raising the policy rate by 750 basis points to 26.25 per cent, increasing cash reserve ratios, normalising open market operations as our primary liquidity management tool.

“And adopting Inflation Targeting as our new monetary policy framework,” he said.

Cardoso said in the area of banking supervision, CBN had taken decisive actions to ensure the safety, soundness, and resilience of the banking industry.

He said that key measures included intervention in three banks, revocation of Heritage Bank’s license, increasing minimum capital requirements, and enhancing AML/CFT supervision.

“We also introduced new frameworks for Cash Reserve Requirements and cybersecurity and prohibited the use of foreign currency collaterals for local currency loans,” he said.

Cardoso said that CBN was in the process of reviewing micro and macro prudential guidelines to reinforce the resilience of financial institutions to withstand tightened conditions, thereeby creating a secure and attractive investment climate.

“We have signaled our plans to re-capitalise deposit money banks in Nigeria to improve capital inadequacy and their capacity to grow the economy.

“Our ultimate goal is to create a more stable, resilient, and efficient financial system that can better serve the Nigerian economy, while adhering to international best practices,” he said.

Earlier, Chairman of the Committee, Sen. Adetokunbo Abiru, said the purpose of the interaction was to update the committee on efforts, activities, objectives and plans of the CBN with respect to monetary policy.

 

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Nigeria’s external reserves surge to $35.77bn – CBN

Nigeria’s external reserves increased to $35.77 billion on Thursday up from the $33.09 Billion at the end of 2023.

This is according to Thursday’s data from the Central Bank of Nigeria on the country’s external reserves movement.

The figure represents a $2.68 billion increase in the country’s external reserves in the past six months.

Further data showed that Nigeria’s foreign reserve crossed the $35.05bn on July 8 to the $35.77 mark on Thursday.

Meanwhile, according to the recently released economic outlook by CBN, titled ‘Macroeconomic Outlook: Price Discovery for Economic Stabilisation’, the apex bank had projected a decline in the country’s external reserves in 2024.

The CBN based its assumption on continued payments of outstanding foreign exchange forward obligations, matured foreign exchange swaps, and debt service.

The apex bank, however, said, “the expected improvement in crude oil earnings, together with recent reforms in the foreign exchange market and energy sector, however, would cushion the drop in external reserves.”

The outlook also projected a marginal increase to $19.42 billion from $19.17 billion in 2023 for diaspora remittances.

“The external reserves, which stood at $33.09bn in 2023 could reduce slightly in 2024.

“This is on the assumption of continued payments of outstanding foreign exchange forward obligations, matured foreign exchange swaps, and debt service,” it said.

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