Weekly Nuggets

Friday, August 7, 2020

Buhari Signs Digital-Age Companies Law

Nigerian President Muhammadu Buhari signed an amended Companies and Allied Matters Law that recognizes the digital reality of the economy while expanding the ease with which new businesses can set up.

Under the amended act signed by the president on Aug. 7, companies can now make electronic filings to the regulators while digital share transfers and electronic general meetings are given legal backing.

Other innovations to the law include reduction of filing fees for small- and medium-sized companies and allowing a single shareholder to register a corporate body.

The changes to the law, passed by the legislature last year, were the first since 1992, when the old law came into being.

FIRS Issues Clarification on Stamp Duties

The Federal Inland Revenue Service issued clarifications last week on its intention to tax a sundry list of transactions ranging from internet and other digital transactions to property leases.

The statement was issued to delineate the scope of the 2019 Finace Act and its provisions with regard to taxation and stamp duties. Digital transactions, such as e-commerce within the country or across the country’s borders are subject to tax, according to the FIRS statement.

A 50 naira stamp duty is also chargeable on all receipts, including money transfers between individuals and corporate bodies when the amount involved exceeds 10,000 naira.

Nigeria’s Tax Revenue Outstrips Oil Income After Decades

Nigeria’s tax income is beginning to outstrip revenue from the sale of crude oil for the first time in decades as demand for fuel remains weak amid the coronavirus pandemic.

At least 70 percent of the funds shared among the country’s federal, state and local governments in July came from taxes, with about 30 percent coming from export of oil and gas, according to Mohammed Nami, chairman of the Federal Inland Revenue Service.

“This belief that with oil money we are rich is false,” Nami told reporters. “What you see the federal, states and local governments sharing at the federation account meetings monthly comes from the taxes paid by Nigerians or body corporate. Without this money, there will be chaos everywhere.”

Oil sales overtook taxation as Nigeria’s main source of revenue in the mid-1970s, and held sway until recent years, when its share of total revenue fell from over 80 percent to about half. The cironavirus pandemic further decimated what was left, with Nigeria estimating a drop of 80 percent in its oil revenue.

NCC Urges Banks, Telecoms Firms to Talk as USSD Bills Mount

Outstanding payments owned by banks to telecoms companies have reached 17 billion naira since the regulatory authorities stopped direct deduction of customers’ funds for phone-banking transactions, according to the Nigerian Communications Commission.

The government insists that the cost of USSD (which stands for Unstructured Supplementary Service Data) banking sessions should be a corporate charge between the banks and the phone service providers without involving the customers.

The NCC, in a directive that took effect from August 1, removed the previous price limits of between 1.63 naira and 4.89 naira and fixed it at 1.63 for a 20-second session, while leaving any changes subject to negotiations between banks and phone companies.