Business News
N330 billion Fine: MTN in fresh mess after FIRS queries tax deduction
MTN Nigeria appears to be enmeshed in a new storm, as the Federal Inland Revenue Service (FIRS) is querying the telco for deducting tax.
Telecommunication giants MTN Nigeria appears to be in fresh trouble after the Federal Inland Revenue Service (FIRS) queried the firm for deducting tax from the N330 billion fine it paid the Nigerian Communications Commission (NCC) for SIM card infraction.
The FIRS Chief, Babatunde Fowler, who insisted that MTN still has an issue to resolve despite “paying” the fine, said the company does not have the right to deduct tax from the money paid to the NCC.
He insisted that fines and penalties for regulatory infractions are revenues paid to the Federal Government and should not be subjected to any tax deduction.
“The MTN took a position that the fine or penalty should be tax-deductible. But the FIRS said that does not make sense. One cannot be given a penalty or fine, which is a punitive measure, and the company is saying it is tax-deductible so that it will get a tax credit on that,” the FIRS supremo added.
Chairman, FIRS, Tunde Fowler
[READ MORE: SCOOP: MTN workers to stay home as students reportedly picket headquarters]
Why this matters: According to a partner at Pillars & Grey Solicitors, Barr. Jesuwale Samson, it is important to understand that the N330 billion MTN paid to the NCC was as a result of the agreement between both parties.
The lawyer said: “It is a punitive sum. It is like me telling you to pay me N50 as punishment and you are now saying I will pay you the N50. But I can’t pay you what I’m supposed to pay you last week (maybe you were supposed to pay me N5), so you are now telling me you can’t pay me N55. It is only the N50 you will pay.”
While stressing that both parties would later head to court for interpretation, Samson said MTN still has to pay the tax owed the FIRS.
[READ ALSO: Mobile Money: MTN targets increase adoption]
The back story: The NCC had in October 2015 imposed a fine of N1.04 trillion on the telecommunications giants for non-compliance with a deadline set by the Commission to disconnect all unregistered SIM cards. The move by NCC followed accusations by mobile phone users that the regulator had failed to bring operators to account for poor services to subscribers.
The regulator later reduced the fine to N780 billion in December 2015, having taken into consideration the stability of the telecommunication sector. The fine was further reduced to N330 billion after MTN agreed to be listed on the Nigeria Stock Exchange (NSE). These agreements have now been fulfilled by MTN, including the listing of 20.3 billion shares in May this year.
Economy & Politics
Over 5 million Nigerians apply for N-Power Batch C
The Minister assured Nigerians that transparency would be applied during the selection process.
Nigeria’s Ministry of Humanitarian Affairs Disaster Management and Social Development said a total of 5,042,001 Nigerians applied for the Batch C of N-Power. Applications commenced on the 26th of June and closed on the 9th of August.
This was announced by Halima Oyelade, a Special Assitant on Strategic Communication, in a statement released Tuesday night. The Ministry said that the application date was meant to close on the 26th of July, but was extended by two weeks to enable those who were unable to apply to do so.
The Backstory: Nairametrics reported in June that the Federal Government announced the reopening of the application portal of the social investment scheme for fresh registration of the June 2020 Batch C intakes.
We also reported that as at last month, the Federal Government said that it had received 4.48 million applications from beneficiaries for the Batch C of the programme within the first 2 weeks.
The Minister, Sadiya Umar Farouq, assured Nigerians in the statement that transparency and due diligence would be applied during the selection process to ensure that the qualified applicants are selected.
“The Honorable Minister further added that the N-Power program is aimed to provide the Nigerian youths with opportunities to gain skills for employability and entrepreneurship which will also go along way in assisting the country towards the post-Covid 19 economic recovery,” she said.
She added that the Ministry would comply with the administration’s promise of lifting 100 million Nigerians out of poverty in ten years and the N-Power scheme would be one of the means to do so as women and persons with disabilities would be prioritized in the selection.
Coronavirus
Covid-19: Timeline of every pronouncement made by Nigeria to support the economy
Timeline of every action announced since the outbreak hit Nigeria.
The number of people living with the Coronavirus Disease (COVID-19) and deaths from it has been on the increase daily.
The Federal Government and its relevant agencies, especially the Central Bank of Nigeria, have responded with policies to cushion the economy, restore investors’ confidence, and support Small and Medium Enterprises (SMEs) and households.
A look at some of the initiatives:
AUGUST 04, 2020
The Central Bank of Nigeria issued the guideline for accessing the Healthcare Sector Research and Development Intervention Scheme (HSRDIS) grant.
The grant, which is part of the apex bank’s policy response to the COVID-19 pandemic, is designed to help strengthen the public healthcare system with innovative financing of research and development (R&D) in new and improved drugs, vaccines, and diagnostics of infectious diseases in Nigeria.
JULY 26, 2020
The Federal Government announced that it has opened 14 airports across the nation for full domestic operations.
This was disclosed by the Minister of Aviation, Hadi Sirika, on Saturday via his Twitter handle. The development means that the airports do not need ministerial approvals for all operations in and out of the facilities any more. The operations include private and charter operations.
JULY 25, 2020
The Federal Government insisted that states’ selection committees of the Special Works Programme (SPW) must consider all residents and not only indigenes of the state in their selection for the 774,000 jobs.
This clarification was made on behalf of the Federal Government by the Minister of State for Labour and Employment, Festus Keyamo, in a tweet post on Saturday, July 25, 2020, through his official twitter handle.
JULY 22, 2020
The Federal Executive Council on Wednesday approved the establishment of a N75 billion Nigerian Youth Investment Fund (NYIF) to support enterprise among 68 million Nigerian youths between ages 18 and 35.
This was disclosed by the Minister of Youth and Sports Development, Sunday Dare, while briefing State House correspondents at the end of the Council meeting, presided over by President Muhammadu Buhari.
READ ALSO: CBN issues guidelines to access N50 billion COVID-19 credit facility
JULY 21, 2020
While answering questions at the end of yesterday’s Monetary Policy Committee (MPC) meeting of the Central Bank of Nigeria, Governor Godwin Emefiele explained why Nigerian banks were encouraged to restructure as much as 41% of their loans to customers.
“If the CBN did not ask the banks to grant these forbearances to their customers, the loans will go bad immediately by our prudential ratios,” Emefiele stated.
JULY 20, 2020
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria held the Monetary Policy Rate (MPR) constant at 12.5%.
Other parameters such as Cash Reserve Ratio (CRR), Liquidity ratio, and asymmetric corridor remain unchanged.
READ MORE: Stanbic IBTC, Zenith Bank will limit their customers’ debit card spending abroad
The Central Bank of Nigeria (CBN) announced it has disbursed over N300 billion to operators in the Small and Medium Enterprises space, together with the Healthcare, Agriculture, and Manufacturing sectors, among others to cushion the effects of the Coronavirus pandemic on their businesses.
This was disclosed in the communique issued by the Monetary Policy Committee of the Central Bank of Nigeria. It is important to note that the CA-COVID Private sector intervention scheme and other sector-specific facilities are not included in the disbursed fund.
Central Bank of Nigeria, Governor Godwin Emefiele explained why Nigerian banks were encouraged to restructure as much as 41% of their loans to customers.
“If the CBN did not ask the banks to grant these forbearances to their customers, the loans will go bad immediately by our prudential ratios,” Emefiele stated.
JULY 19, 2020
The Central Bank of Nigeria (CBN) said it reserves 60% of its N220 billion Micro, Small and Medium Enterprises Development Fund for women entrepreneurs.
The apex bank added that 2% of the wholesale component of the fund would be given to economically active persons that are living with disabilities, as 10% is meant for start-up businesses.
JULY 17, 2020
The Federal Government announced plans to roll out a N2.3 trillion stimulus package and survival fund for Micro Small and Medium Enterprises (MSMEs) to stay afloat amid the economic challenges imposed by the pandemic.
The survival fund includes payroll support for three months, and guaranteed off-take scheme among others, all under the National Economic Sustainability Plan (NESP).
The Central Bank of Nigeria (CBN) issued a guideline to access its Non-Oil Export Stimulation Facility (NESF). The fund was introduced to diversify the revenue base of the economy and to expedite the growth and development of the nation’s non-oil export sector.
The facility will help redress the declining export financing and reposition the sector to increase its contribution to economic
development.
The Central Bank of Nigeria (CBN) announced it would support local maize farmers in Nigeria, as it projects production of 12.5 million tons of maize in 18 months.
The stakeholders in the industry discussed strategies on CBN’s MAIZE Anchor Borrowers Programme (ABP) for 2020.
READ MORE: CBN mulls ‘quantitative easing’ as it considers buying commercial papers at single digits
JULY 15, 2020
The Central Bank of Nigeria (CBN) has unveiled guidelines for a Non-Interest Financial Institutions under its Agri-Business, Small and Medium Enterprise Investment Scheme (AGSMEIS) and Micro, Small and Medium Enterprises Development Fund (MSMEDF).
The guidelines also included the Accelerated Agricultural Development Scheme (AADS) and seven other intervention schemes in its bouquet.
July 12, 2020
The Central Bank of Nigeria (CBN), in collaboration with the Bankers’ Committee, outlined how to get the creative sector loans.
Both parties developed a Creative Industry Financing Initiative (CIFI) as part of efforts to boost job creation in Nigeria, particularly among youths in the country. The initiative has four pillars which include Fashion, Information Technology, Movie and Music.
JUNE 26, 2020
The Central Bank of Nigeria (CBN) has announced the disbursement of over N49 billion out of N50 billion targeted facility for households and small businesses to over 80,000 families and households.
The apex bank introduced the N50 billion Targeted Credit Facility as a stimulus package to support households and micro, small and medium enterprises that are affected by the coronavirus pandemic.
JUNE 15, 2020
The Nigerian Government has released its Economic Sustainability Plan which it hopes will address the economic challenges of the COVID-19 pandemic. The plan was put together by the Economic Sustainability Committee (ESC) assembled by President Muhammadu Buhari.
Members of the committee included the Vice President, CBN Governor, 15 Ministers, GMD NNPC, and the Permanent Secretary.
JUNE 11, 2020
The Nigerian National Petroleum Corporation (NNPC) has announced that along side with its partners, it would be investing 53% of the N21 billion COVID-19 donations from the oil and gas sector to be used in construction of hospitals across the six geo-political zones.
The oil and gas sector had pledged N21 billion in kind to be used for intervention in the healthcare delivery system.
The NNPC boss said 53% of the sum pledged has been earmarked for the construction of medical infrastructure across the six geopolitical zones in the country,’’ and this was to come from NNPC and its partners.
JUNE 9, 2020
The Central Bank of Nigeria (CBN) has disbursed the total sum of N107.45 billion to beneficiaries from the N1.15 trillion Covid-19 Pandemic Intervention Funds so far, according to data provided by the bank from the Monetary Policy Meeting for May 2020.
The Bank announced that under the N100 billion Healthcare Sector fund, N10.15 billion has been disbursed and approved for establishments of advanced diagnostics and Health Centres and expansion of Pharmaceutical plants for essentials drugs and intravenous fluids.
The Bank has also disbursed N93.2 billion under the Real Sector Support Fund to boost local manufacturing, which consists of 44 Greenfield and Brownfield projects.
The Bank has approved N10.9 billion to 14,331 beneficiaries under the N50 billion Targeted Credit Facility for Households and SMEs, out of which N4.1 billion has been disbursed to 5,868 successful beneficiaries.
JUNE 8, 2020
The Central Bank of Nigeria (CBN) announced that households and SMEs applying for the N50 billion COVID-19 Targeted Credit Facility would not be required to provide guarantors before the can access they can access the credit facility.
All applicants to the N50 billion credit facility, who have successfully completed the application processes and submitted their account details, should expect credit alerts 48 hours afterwards. If an applicant does not receive credit alert after 48 hours of submitting their account details, such an applicant should contact the CBN by calling 09010026900.
JUNE 4, 2020
The Nigerian National Petroleum Corporation (NNPC) developed a contacts tracing software application that would be deployed in all its location across the country.
The novel app was part of the oil company’s sectoral contribution to the containment of the spread of the pandemic within its formations and ministries, departments and agencies of the government.
This is in line with the Transparency, Accountability and Performance Excellence (TAPE) agenda of the present Leadership of the NNPC, and the commitment to continually deploy Information and Communications Technology (ICT) for the purposes of operational efficiency and accountability within the corporation’s system.
MAY 28. 2020
Central Bank of Nigeria has approved and disbursed N10.5 billion out of the N100 billion credit intervention on the healthcare industry to cushion the impact of the Coronavirus on the operators in the sector.
The apex bank disbursed the fund for the establishment of advanced diagnostic and health centres and the expansion of some pharmaceutical plants for essential drugs and intravenous fluids
According to the CBN boss, the apex bank had stipulated the requirements to access the funds. Part of it is that a corporate entity must submit its application to a participating financial institution (PFI) which could be either a Deposit Money Bank or a Development Finance Institution of its choice with a bankable business plan.
The Monetary Policy Committee of the Central Bank of Nigeria decided by a unanimous vote to reduce the Monetary Policy Rate (MPR) from 13.5% to 12.5% and to hold all other policy parameters constant. Seven (7) members voted for a reduction of the policy rate by 100 basis points, two (2) members by 150 basis points and one (1) member by 200 basis points.
Highlights of the MPC’s decisions:
I. Reduce the MPR to 12.5 per cent;
II. Retain the Asymmetric Corridor of +200/-500 basis points around the MPR;
III. Retain the CRR at 27.5 per cent; and
IV. Retain the Liquidity Ratio at 30 per cent.
The Committee maintained that although a sharp decline in output growth is expected in Q2 2020 and maybe the third quarter if the current stimulus initiatives are properly implemented, the economy would reverse to positive growth by the fourth quarter.
MAY 27, 2020
Central Bank of Nigeria (CBN), approved regulatory forbearance to restructure credit facilities in the Other Financial Institution (OFI) sub-sector.
The apex bank reduced the interest rates on its facilities through participating financial institutions from 9% to 5% per annum for a year with effect from March 1, 2020.
MAY 21, 2020
CBN introduced N100 billion credit intervention scheme to mitigate the impacts of COVID-19 on businesses, particularly those in the health sector. The scheme, which was planned to be funded from the Real Sector Support Facility – Differentiated Cash Reserves Requirement, is to have an interest rate of 5% per annum until March 1, 2021, when it will revert back to 9%.
The apex bank insisted that the money would be given to people that would import or source for foreign exchange for materials that can be source locally
CBN also postponed the much-awaited May 2020 Monetary Policy Commission (MPC) meeting. The meeting that was earlier scheduled for Monday and Tuesday, May 25 and 26, 2020, was shifted to Thursday, May 28, 2020. This is as a result of the
declaration of Monday and Tuesday, May 25 and 26, 2020, as Eid-el Fitr holidays.
The apex bank assured that it has put in place all necessary machinery for the meeting to now hold for only one day on account of the on-going COVID-19 national lockdown and to align this meeting with extant rules of the Presidential Task Force (PTF) on COVID-19 and advisories from other relevant agencies.
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MAY 19, 2020
The Central Bank of Nigeria (CBN) tasked industrial conglomerates operating in the country to support efforts of the government to grow the nation’s economy and return it to its green days. CBN Governor, Godwin Emefiele, warned that the apex bank would not support the importation of items that could be produced in Nigeria.
In a virtual meeting with Chief Executive Officers (CEOs) of conglomerates in Nigeria, Emefiele explained that the CBN, in line with President Muhammadu Buhari’s desire, was determined to return the Nigerian economy to the period when the manufacturing and agricultural sectors formed the base of the economy.
READ ALSO: Central banks digital currencies pose a threat against the U.S dollar
MAY 18, 2020
The Central Bank of Nigeria (CBN) tasked industrial conglomerates operating in the country to support efforts of the government to grow the nation’s economy and return it to its green days. CBN Governor, Godwin Emefiele, warned that the apex bank would not support the importation of items that could be produced in Nigeria.
In a virtual meeting with Chief Executive Officers (CEOs) of conglomerates in Nigeria, Emefiele explained that the CBN, in line with President Muhammadu Buhari’s desire, was determined to return the Nigerian economy to the period when the manufacturing and agricultural sectors formed the base of the economy.
MAY 18, 2020
The Federal Government of Nigeria extended the gradual easing of the COVID-19 lockdown across the country by two weeks.
Chairman of the Presidential Task Force (PTF) on COVID-19, Boss Mustapha, stated that in spite of the modest progress made, the country is still not yet ready for full reopening of the economy and said that tough decisions have to be taken for the good of the greater majority.
Central Bank of Nigeria (CBN) also signed an agreement with the Nigerian National Petroleum Corporation (NNPC) to spend as much as N1 billion as quarantine costs for about 3,000 Nigerian returnees.
The decision by the duo regulator was disclosed by Nigeria’s Foreign Affairs’ Minister, Geoffrey Onyeama. According to Onyema, this is a CSR gesture by the CBN and the NNPC. The N1 billion is expected to cover the costs of hotel accommodation and the feeding of the returnees
READ ALSO: Covid-19: CBN wants to fund research for Nigerian Made vaccines
MAY 16, 2020
Federal Government announced that new Micro Small and Medium Enterprises (MSMEs) will access National Agency for Food and Drugs Administration and Control (NAFDAC) registration of their products at an 80% discount, over the next 6 months.
This concession covers MSMEs that are into production of foods, drugs, and related consumables. As an added incentive, the first 200 micro and small businesses to register on the e-platforms will be allowed to do it at no cost – zero tariffs.
In view of current economic challenges faced by businesses due to the pandemic, the government has also authorised NAFDAC to grant a waiver on administrative charges for overdue/late renewal of expired licenses of products for a period 90 days.
READ: Nigeria’s foreign reserves fall to 6-weeks low, lose $81.10 million
MAY 12, 2020
CBN disclosed that it was developing a framework to provide financial support to aid the fight against Coronavirus Disease in the country. According to Emefiele, the fund would be released as soon as the vaccine was validated by health authorities.
MAY 10, 2020
CBN assured foreign investors that repatriating their funds from the country was secured despite forex related revenue shortages due to the drop from the sale of crude oil globally.
The apex bank had put in place policies to ensure an orderly exit for those that might be interested in doing so and also urged investors to be patient as such repatriations were being processed, owing to the Bank’s policy of orderly exit of investments.
MAY 3, 2020
CBN and the Bankers’ Committee ordered all banks in the country not to retrench or lay-off any staff of any cadre (either full-time or part-time). The apex bank also said that its approval must be sought if it became absolutely necessary to lay-off any such staff.
MAY 2, 2020
The Nigeria Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL) Microfinance bank, on behalf of the Central Bank of Nigeria (CBN), started the disbursement of the N50 billion Targeted Credit Facility (TCF) to beneficiaries.
The facility is a stimulus package which was introduced by CBN, to help mitigate the impact of the coronavirus pandemic on households and MSMEs.
APRIL 30, 2020
CBN extended the deadlines issued to Microfinance banks (MFB) to comply with its revised minimum capital requirements.
APRIL 29, 2020
CBN resumed the sales of dollars to SMEs who need foreign exchange for essential imports, as well as Nigerian students in foreign schools who need to pay their school fees.
This comes as the world-wide COVID-19 lockdown begins to ease up, even as business activities are expected to gradually return to normal. In view of the gradual easing of the COVID-19 lockdown both globally and in Nigeria.
READ: Experts state how COVID-19 affects Nigerian real estate sector
APRIL 28. 2020
The apex bank lifted the temporary suspension placed on cheque clearing in the country with effect from Tuesday, April 28, 2020.
In the circular, it explained that it lifted the suspension in furtherance of its efforts in the development of a safe and efficient payment system in the country.
IMF loan
The executive board of the International Monetary Fund (IMF), approved $3.4 billion as Rapid Financing Instrument (RFI) as fiscal support to Nigeria during this period of coronavirus pandemic.
The fund that was requested by Nigeria is to be used to mitigate the impact of the coronavirus pandemic on Nigeria’s economy as the country grapples with dwindling government revenue and an economic crisis following the crash of crude oil prices globally.
READ ALSO: CBN discloses conditions for assessing N100 billion credit facility, addresses ‘process problems’
APRIL 14, 2020
In preparation for post-COVID-19, CBN announced four major areas of focus. They are:
• Provision of affordable housing: Here the CBN will create an intervention fund which will target housing construction by developers who provide proof of profiled off-takers with the capacity to repay the loan.
The BVN will be used to verify the information given by the off-takers before the developers can access the facility. The CBN will also assist the mortgage finance sub-sector, assist land administration agencies at the states to build capacity for prompt processing and issuance of land titles.
• Renewable energy: The CBN, over the next three years, will be providing financial support to environmentally friendly energy production, as this has tangential long term health benefits.
• Cutting edge research: Also, the bank will be providing funding and encouraging efforts aimed at driving innovation and research in every sector through our universities, research institutions, creative industry initiatives and so on.
• Light manufacturing: The apex bank plans to set up a N500 billion intervention fund over a medium, and targeted at manufacturing firms for the procurement of state of the art machinery and equipment and automated manufacturing models that would fast track local production. It will also help increase the patronage of locally processed products.
CBN intends to close the funding gap needed for the replacement of machinery and equipment in order to enhance local production.
MARCH 30, 2020
* The Federal Government also gave a directive that all economic and social activities in Ogun, Lagos States and Federal Capital Territory should be suspended for two weeks. The lockdown affected the movement of people across the states, except for people in the essential services sectors.
• CBN suspended the clearing of all cheque instruments in the Nigerian Clearing System. According to the bank, the directive was intended to “ensure hitch-free clearing and settlement activities” during the previous 14-day lockdown.
CBN’s suspension was based on the earlier envisaged two-weeks lockdown which was later extended to about 5 weeks.
MARCH 27, 2020
CBN and the Banker’s Committee formed the Nigerian Private Sector Coalition Against COVID-19. The apex bank explained that the coalition was in partnership with the private sector, led by Aliko Dangote Foundation and Access Bank.
MARCH 25, 2020
Following the request of the Association of Bureau de Change Operators of Nigeria (ABCON) to declare market holiday on its members’ weekly bidding, the CBN suspended the sales of foreign exchange to operators of Bureau de Change.
MARCH 24, 2020
The Monetary policy committee unanimously voted to:
• Retain the MPR (Monetary policy Rate) at 14%.
• Retain the asymmetric corridor at +200/-500 basis points.
• Retain the CRR (Cash Reserve ratio) at 27.5% and retain liquidity ratio at 30%.
MARCH 20, 2020
• The CBN officially devalued the naira by 15% moving from N307/$1 to N360/$1. Depreciation at the “market-determined” I&E window is 5%, having moved from N360/$1 to N380/$1.
• CBN sold dollars to banks at N380/$1 in a move signifying a devaluation of the currency. Banks trading at the Investor and Exporter (I&E) window bought dollars at N360/$1 from the CBN on Friday, March 20, 2020. The I&E window is the official market where forex is traded between banks, the CBN, foreign investors, and businesses
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David
August 1, 2019 at 11:45 pm
It’s obvious to see that these guys don’t just love MTN. After all these years of paying the fine, it’s now that FIRS found this out, abi? Too bad!!!👎
Anonymous
August 2, 2019 at 10:31 am
Nawa oh. Can’t they at least allow MTN breath?
Oye
August 2, 2019 at 3:22 pm
I hope these excessive fines will not crash the company. It’s more dignified when compliance is enforced without endangering the going concern of a multinational company like MTN.