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VAT For Brothers: Stop Illegality First Wike tells FG

VAT for brothers: Stop illegality first, Wike tells FG, Gombe fears stoppage

Governor of Rivers State, Nyesom Wike, has advised his counterparts that are begging the state and Lagos State to discontinue moves to collect the Value Added Tax directly.

Wike, in Port Harcourt on Monday, said the Federal Government and states that were appealing to Lagos and Rivers states to be their brother’s keeper, must first accept the illegality of the central government collecting VAT, instead of states.

He stated this as the Gombe State Governor, Muhammadu Yahaya, while receiving the All Progressives Congress stakeholders from the southern part of the state on Monday, said other states must wake up to reality on ground.

Yahaya noted that if the income from VAT ceased, the state government would not be able to pay salaries.

The battle for VAT started last month when the Federal High Court sitting in Port Harcourt in its judgment held that Rivers State had the right to collect VAT within its territory.

But in its ruling on an appeal filed by the Federal Inland Revenue, the Court of Appeal on September 10 ordered a stay of execution of the Federal High Court judgment.

Lagos State has asked to be joined in the appeal filed by the FIRS.

While some states have appealed to Lagos and Rivers states to be their brother’s keeper, the Katsina State Governor, Aminu Masari, dismissed moves by the states as a joke.

On Monday, Wike said Nigeria must encourage federating states to harness their resources and generate revenues.

The governor made the observation when the Managing Director and Editor-in-Chief of the SUN (Newspaper) Publishing Limited, Mr. Onuoha Ukeh led a delegation to present a letter of nomination to him as the SUN Man of the Year 2020 Award at Government House, Port Harcourt on Monday.

Wike observed that there were attempts to frustrate states like Rivers, to actualise the constitutional provisions that empower them to harness their resources and revenues, particularly VAT.

The governor decried the situation where the legality of states collecting  VAT was not considered on the merit of the law by some public commentators including state governors,  who were politicising it and looking at it from prisms of ethnicity and religion.

Wike said this in a statement issued by his media aide, Kelvin Ebiri titled ‘States must be encouraged to harness their resources, revenues to develop themselves—Wike’

According to the governor, what the FIRS is doing is illegal and could be likened to robbing states.

He stated, “You don’t even need to be a lawyer to know that VAT is not in items 58 and 59 of the second schedule of the 1999 Constitution as amended. Everybody knows that.

“It is not even in the concurrent list. Therefore, it falls under the residual list. It is not arguable. That yesterday nothing happened does not mean that today nothing will happen, or tomorrow something will not happen.

“Nigeria should encourage states to be strong enough to have resources to develop their states. We are in a federal system where we are practising unitary system. Everybody at the end of the month will run to Abuja to share money. Nobody comes back to the state to think, how do I develop my state”?

“The issue of VAT did not start from Rivers State alone. It started in Lagos State when Lagos State challenged it in the Supreme Court. Unfortunately, the Supreme Court said  Lagos shouldn’t have sued the Federal Government.”

He urged those demanding a brother’s keeper consideration to first appreciate the position of the law and situate it rightly.

“Some people say, be your brother’s keeper. I have no problem in being my brother’s keeper. But why not come out and say, let us tell ourselves the simple truth. As it is being provided in the law, who is the person responsible to collect  VAT?

“When you agree to that, that it is the state, then we can sit down to look at the different problems of states. And not to say be your brother’s keeper while you’re doing an illegal thing, in disobeying what the law says you should not do,” the governor explained.”

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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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