NEWS

How proposed tax reforms will address current imbalance – FIRS Chair, Zacch Adedeji

Published

5 months ago

November 19, 2024

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The FIRS Chairman explained that the current VAT sharing arrangement primarily benefits Lagos, the FCT, and Rivers—states where most corporate head offices are located.He further noted that the proposed reforms aim to address this imbalance by introducing a derivation principle model, ensuring a more equitable distribution of VAT revenues to all states, regardless of their economic status.Today, I just reeled out of the data on this month of October sharing. I just signed it on Friday.

Today, Lagos will take 42% of the VAT. Rivers will take 16%. Oyo State will take 5.2%, FCT will take 9%. If you take those 3 States, they are taking more than 70% of the tax. “Why? Because those are the places where the head offices of those places are. And we know that 70% of consumption is not happening in those three states. So in whatever way you look at it, there is no way every other state apart from Lagos, Rivers, FCT, benefits from the proposed tax bill.“If you look at it, MTN contributed highest, but because MTN headquarters is in Lagos, all the allocation from MTN is being accrued to Lagos. So, when this bill is passed, all states will benefit irrespective of the kind of economic situation that is happening in Nigeria,” Adedeji said.Derivation Principle for Consumption Tax In addition, the FIRS Chairman clarified that the derivation principle model applies specifically to consumption tax or Value Added Tax (VAT).In his address, Adedeji emphasized that this model should not be mistaken for the derivation principle applied to oil-producing states, which is based on the location of production.He explained that, in the case of consumption tax, derivation means the funds will be allocated to the states where the commodity is consumed, rather than the states where corporate head offices are situated.“On derivation, I see there is a mix-up here. We have the oil and gas. If you look at the oil and gas, where they produce is where we sell and collect money from the oil. That’s why it is limited to their States. “VAT by definition is a consumption tax. If you use derivation in VAT, what it means is that where is it consumed. Where do you make the call? Where is the bank transaction done? What the bill seeks to correct is that the existing structure we have does not represent the intent of Nigeria,” Adedeji added.What you should know The new tax bills under consideration in the National Assembly propose adopting a derivation principle in the allocation of VAT revenues between the federal government and sub-national entities.These proposals have sparked controversy, with northern elites openly rejecting them, arguing that the changes may not favor their region.Under the current Section 40 of the VAT Act, VAT revenue is allocated as follows: 15% to the Federal Government, 50% to the States and Federal Capital Territory (FCT), and 35% to Local Governments. The allocation to states and local governments incorporates a derivation principle of at least 20%.Although not explicitly detailed in the VAT Act, other factors influencing the distribution include 50% based on equality and 30% based on population.Additionally, 4% of collections are allocated to the Federal Inland Revenue Service (FIRS) as a collection fee, while 2% goes to the Nigeria Customs Service (NCS) for import VAT.

NEWS

Family Announces Funeral Arrangements for Late Elder Statesman, Nationalist Pa Ayo Adebanjo

Published

2 days ago

April 24, 2025

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The family of Chief Samuel Ayodele Adebanjo, revered nationalist, elder statesman, and leader of the Pan-Yoruba socio-cultural group, Afenifere, has formally announced the funeral arrangements following his passing on February 14, 2025, at the age of 96.A series of events have been planned to honour the life, legacy, and values of the late Pa Ayo Adebanjo — a man widely respected for his lifelong dedication to democracy, Yoruba unity, and national development.In a statement by the chairman of the burial planning committee, Dr. Biodun Shobanjo, on behalf of the family, they expressed their deep gratitude for the outpouring of support and prayers received since his passing and welcomed well-wishers to participate in celebrating the life of their beloved patriarch.The funeral arrangements are as follows:Day of Tributes/Service of Songs Wednesday, April 30th, 2025 || 2 p.m. Eko Hotels & Suites, Victoria Island, LagosColour: Shades of GreenWake Friday, May 2nd, 2025 || 4 p.m. Pa Ayo Adebanjo’s Country Home,, Isanya Ogbo, near Ijebu Ode, Ogun StateColour: Alari of GoldChurch Service/Funeral Saturday, May 3rd, 2025 || 10.a.m. St. Phillips Anglican Church, Isanya Ogbo, near Ijebu Ode, Ogun StateColour: Powder Blue Gele/Cap on Ankara or Royal Blue LaceThanksgiving Sunday, May 4th, 2025 || 10.a.m. St. Phillips Anglican Church, Isanya Ogbo, near Ijebu Ode, Ogun StateThe family invites friends, colleagues, political associates, and the general public to join them in paying final respects to a man whose courage, integrity, and unwavering belief in justice left an indelible mark on Nigeria’s political history.Chief Samuel Ayodele Adebanjo, widely known as Chief Ayo Adebanjo or Pa Ayo Adebanjo, was born on the 10th of April, 1928, in Ogun State, in the south-western region of Nigeria. He was born into the family of Joel Adebanjo Adedairo and Salamotu Odubanke. Chief Adebanjo began his public journey as a journalist before proceeding to the United Kingdom to study law. He was called to the English Bar in 1961.His political journey began in 1943 as a member of the Zikist Movement, before joining the youth wing of the Action Group in 1951, where he became a political disciple of the late Chief Obafemi Awolowo. Throughout his life, Chief Adebanjo remained a fearless advocate for democratic governance, true federalism, and Yoruba interests within the Nigerian federation.He will be remembered as a titan of Nigeria’s nationalist struggle and a principled voice in the country’s post-independence political evolution.SIGNED:Mrs. Ayotunde Atteh (nee Ayo-Adebanjo)Mrs. Adeola Azeez (nee Ayo-Adebanjo)Mr. Obafemi Ayo-AdebanjoFor The FamilyApril 24, 2025

NEWS

Niger governor orders arrest of people with dreadlocks

Published

4 days ago

April 23, 2025

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Governor Umar Bago of Niger State has declared zero tolerance for rascality even as he has directed security agencies to arrest individuals wearing dreadlocks in Minna, the state capital.

The directive was issued during Tuesday’s high-level stakeholders’ security meeting at the Government House.

Governor Bago instructed security agencies to not only arrest those with dreadlocks but also forcibly shave their hair and impose fines on them.

“We will have zero tolerance for rascality. Anybody that you find with dreadlocks, arrest, barb the hair, and fine him,” Bago declared.

“Nobody should carry any kind of haircut inside Minna. I have given marching orders to security agencies.”

The meeting, attended by security operatives and traditional rulers, focused on clamping down on what the governor described as rising criminality and disorder in the state.

“Parents should warn their children. From this moment, it’s 100% fire-for-fire,” he said. “Also, any house found harbouring criminals should be demolished. Niger State is not for useless people.”

Among other measures announced were restrictions on commercial motorcycles and tricycles, which are now banned from operating between 6 p.m. and 6 a.m., except for emergency medical purposes.

The governor also directed traditional and community leaders, including district, village and ward heads, to ensure accurate documentation of all residents in their areas.

NEWS

Union Bank system hacked as customers lose N9.3 billion to fraud

Published

5 days ago

April 22, 2025

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Union Bank of Nigeria Plc led by Yetunde Oni, is currently grappling with a massive N9.3 billion fraud following a significant operational system breach, THE WITNESS reports.

The development comes exactly one year and three months after the Central Bank of Nigeria (CBN) sacked the bank’s board and entire management, citing governance failures. A new management team was subsequently appointed to lead the financial institution.

Union Bank is battling to recover the sum of N9,329,322,870.00 (nine billion, three hundred and twenty-nine million, three hundred and twenty-two thousand, eight hundred and seventy naira), withdrawn from customers’ accounts without authorization.

In a suit marked FHC/L/CS/629/2025, filed before the Federal High Court in Lagos, seen by THE WITNESS, Union Bank sought a preservative order compelling the financial institutions involved to place Post No Debit restrictions on the accounts of all beneficiaries and to return the stolen funds traced to their institutions.

According to the bank, the fraud followed an operational failure and fraud in its core banking system on March 23, 2025, which led to unauthorized transfers from customers’ accounts.

An affidavit deposed to by Oluwasegun Falola, head of the E-Fraud Investigations Department at Union Bank, stated that the funds were fraudulently and erroneously transferred from the bank to various accounts across 53 financial institutions.

Falola explained that on March 23, 2025, the bank observed that N9.3 billion had been debited from customer accounts and dispersed into various accounts maintained by the respondent banks. He added that Union Bank immediately contacted the banks involved in a bid to halt further dissipation of the funds.

“The Fraud Desk Department of the bank, in the course of its investigations, discovered that the monies were transferred in trickles into several accounts domiciled with the 1st to 54th Respondents,” the affidavit stated.

Union Bank attributed the unauthorized debits to a system glitch and exploitation, which it says enabled the illicit transfers.

“The funds were erroneously and fraudulently transferred from customers’ accounts.

“Upon further investigation, it was found that the funds were subsequently moved from these primary beneficiary accounts to other accounts also held by the respondents.”

The bank disclosed that it had submitted the list of recipient accounts to the respective financial institutions as a preliminary measure to recover any remaining funds

To support its recovery efforts, the bank said its internal audit and legal departments compiled detailed reports tracing the flow of funds and identifying all beneficiary accounts.

When the case was mentioned on April 2, 2025, Union Bank’s counsel, A. Adedoyin-Adeniyi, informed the court that the stolen funds were still being moved.

“₦9.3 billion has been moved from the account, and they are still moving funds. We now have more people involved in moving the funds,” the lawyer told the court.

To support its recovery efforts, the bank said its internal audit and legal departments compiled detailed reports tracing the flow of funds and identifying all beneficiary accounts.

When the case was mentioned on April 2, 2025, Union Bank’s counsel, A. Adedoyin-Adeniyi, informed the court that the stolen funds were still being moved.

“₦9.3 billion has been moved from the account, and they are still moving funds. We now have more people involved in moving the funds,” the lawyer told the court.

In his ruling, Justice Deinde Dipeolu agreed with the submissions and thereafter granted a motion ex parte filed by the bank concerning the unauthorized fund transfers.

“Having reviewed the motion ex parte, the application is hereby granted,” the judge ruled.

The incident has raised broader concerns about the security of Nigeria’s banking infrastructure, especially as interbank transactions continue to increase. Financial analysts suggest that outdated systems and inadequate oversight may be exacerbating vulnerabilities, heightening the risk of fraud and transactional errors.

Union Bank did not respond to THE WITNESS’ inquiries as at press time.

(S) Witnessngr