The Senate has passed for second reading fours bills designed to reform Nigeria’s tax system.

This followed the presentation of the general principles of the bills by the Senate Leader, Opeyemi Bamidele (APC-Ekiti), during plenary on Thursday.

The four bills, which were first read on Oct. 30, are:o Joint Revenue Board of Nigeria Establishment Bill, 2024; Nigeria Revenue Service Establishment Bill, 2024; Nigeria Tax Administration Bill, 2024 and the Nigeria Tax Bill, 2024.

Leading the debate on the general principles of the bills, Opeyemi said
that they represented a significant move toward overhauling the country’s tax system.

He said that the bills were aimed at simplifying the tax landscape, reducing the burden on small business and streamlining how taxes would be collected.

According to him, the four bills seek to ensure uniformity in tax revenue administration in the country, in accordance with the provisions of the constitution and eliminate the incidence of double taxation across the country.

He said that the bills also sought to deploy taxation as a tool for encouraging private sector investments in critical industries and boosting individuals’ disposable incomes through targetted tax exemptions, as captured in the various bills.

“In the area of tax exemptions, there is a proposal to exempt small business operators, while those with annual turnover of N50 million or less are equally exempted from payment of taxes.

“Similarly, there is a reduction in company’s income tax from the current 30 per cent to 25 per cent by 2026.

“As part of deliberate attempt to curtail incidence of double taxation and multiplicity of taxes and levies, multiple taxes hitherto paid by companies under various tax heads namely: 2.5 per cent education tax, 0.25 per cent NASENI tax have been harmonised into a development levy of two per cent.

“This will be applied by 2030 to fund the newly-established student loan scheme which will benefit many Nigerian youths.

” Unlike like what is obtainable under the existing tax regime whereby the Federal Government takes a lion share of VAT revenues, it is proposed that the sharing formula should allow state governments to share 55 per cent of VAT revenue from the current 15 per cent to 10 per cent sharing formula,” he said.

He, however, said local governments share of VAT revenue remained unaffected.

“Relatedly, basic items consumed by Nigerian households, such as food items, medical services and pharmaceuticals, educational fees, electricity, etc. are exempted from VAT.

“Again, as part of efforts to ease the administration of income taxes and levies across the federation, there is a reasonable effort made to consolidate core tax statutes and related tax legislations,” he said.

The senator said that the bills contained innovative and people-oriented proposals as part of government’s deliberate fiscal and tax reform measures.

He said that the bills were meant to cushion the effects of the ongoing broader economic policies, such as the removal of subsidy on petroleum products.

Opeyemi said that the innovations were also tailored toward implementing cost-reflective electricity tariffs in the power sector.

He urged the lawmakers to see the bills as part of the required legislative intervention to support the ongoing fiscal and tax reform measures needed to reposition the Nigerian economy for growth and productivity.

“These bills should be considered with great sense of patriotism and exercise of the powers of the National Assembly under Section 59 of the 1999 Constitution regarding imposition of taxes.

“I, therefore, urge my distinguished colleagues to support the bills for second reading.

Contributing, Sen. Seriake Dickson (PDP-Bayelsa) lauded the bills, saying that they would entrench the much-canvassed fiscal federalism.

However, Sen.Ali Ndume (APC-Borno) said although he was not against reforms and tax reforms in Nigeria, he, however, said that the timing of the bills was the issue.

Ndume said that the issue of derivation proposed in the bills was contradictory, stressing that the constitution needed to be amended for some of the proposals in the bills to sail through.

He said that in inline with the positions of the governors and traditional rulers, the bills should be withdrawn for further consultations.

Ndume specifically said that the issue of VAT and derivation should be addressed, adding that senate should consult first before further legislative inputs could be made on the bills.

However, Senate Chief Whip, Sen. Mohammed Monguno (APC-Borno), vehemently disagreed with Ndume, saying that his position negated the senate rule on processes of lawmaking.

He said Section 60 of 1999 Constitution, as amended, empowered the senate to regulate its procedure.

According to Monguno, the process of law-making, as stated in the senate’s rule, was unambiguous, nothing that after second reading, the bill will be transmitted for public hearing, where Nigerians of all groups will be free to make their inputs on the bills.

The senator said that Ndume’s suggestion for senate to withdraw the bills was foreign to legislative process, describing the suggestion as an academic exercise that was not worthy of legislative consideration.

According to him, the bills are noble and pro-people, as it will reduce the tax burden on Nigerians.

President of the Senate, Godswill Akpabio, after the reading of the bills for the second time, said all concerned stakeholders, should be invited at the public hearing to make their inputs before final clause-by-clause consideration by the senate.

He consequently referred the bills to Senate Committee on Finance for further legislative inputs, with a directive to return back to plenary in six weeks.

The United Bank for Africa has signed a deal to commence full banking operations in France.

In a statement late Thursday, the banking group said the landmark business cooperation agreement with the French Finance Minister, Antoine Armand, was part of President Bola Tinubu’s state visit to France.

During the visit, the Chairman of UBA Group, Tony Elumelu, in the presence of Tinubu and the President of France, Emmanuel Macron, signed the agreement indicative of support by the French Government for the development of UBA’s full banking operations in France.

Speaking at the signing ceremony,  Elumelu said, “This partnership reinforces our commitment to seamless international banking services for our customers, not just across the 11 Francophone African countries we serve, but Africa as a whole and French and European customers transacting with Africa.

“Expanding into France is a natural progression, with Paris serving as our European Union hub as we continue to bring Africa and the world together through innovative financial solutions. Paris will join London, New York, and Dubai as a critical component of our unique global network.”Related News

With this agreement, UBA joins tier-1 banks in Nigeria, running with a banking presence in France.

Tinubu arrived in France on Thursday for a two-day state visit, with both sides looking to deepen their economic and diplomatic ties.

It is the first official state visit to Paris by a Nigerian leader in over two decades.

Macron welcomed his counterpart with a warm greeting in Nigerian Pidgin English, stressing the cultural connection between the two leaders.

“Na big honour for France to welcome you for dis state visit,” he wrote on social media.

The Central Bank of Nigeria (CBN) on Wednesday announced new guidelines for foreign exchange (FX) trading through the Electronic Foreign Exchange Matching System (EFEMS).

CBN’s director of the Financial Markets Department, Omolara Duke, made this in a statement, stating that the new guidelines aim to ensure transparency, fairness, and compliance in FX trading.

The minimum tradable amount is set at $100,000; CBN disclosed this in a tweet, adding it will be effective December 2, 2024.

“The CBN transitions FX trading to Bloomberg BMatch, promising enhanced transparency, fair pricing and operational efficiency, effective December 2, 2024,” the apex bank tweeted.

CBN also stated that the Bloomberg BMatch platform will boost market integrity, enhance price discovery, and ensure seamless FX trading among participants.

General Provisions

1. These guidelines regulate the operations of interbank FX trading via the Electronic Foreign Exchange Matching System (EFEMS),

2. The purpose is to ensure transparent, fair, and efficient FX trading, minimising counterparty risk and ensuring compliance with Central Bank of Nigeria (CBN) regulations. and greater

3. The CBN has approved the Bloomberg BMatch as the designated platform to support the EFEMS for interbank trading. advised to

4. All market participants are required to comply strictly with these guidelines and any amendments as may be issued by the CBN from time to time.

Trading and Operational Requirements

1 Trading hours shall be from 09:00 hrs to 16:00 hrs WAT on business days.

2 All unmatched orders will be cleared at the market’s close and may be resubmitted on the
following business day.

3 Quotes on EFEMS will remain anonymous until matched. Once matched, counterparty details will be revealed for settlement purposes.

4 All trades consummated on EFEMS are binding, unless canceled by mutual agreement of both parties with written approval from the CBN.

5 The minimum tradable amount is US$100,000.00, with incremental clip sizes of US$50,000.00.

6 Participants must set credit and settlement limits for other counterparties in the system.
Transactions exceeding these limits will not be executed.

7 Participants must have adequate credit and settlement limit set for the CBN as its counterparty bank.

8 Participants are required to comply with the Nigerian Foreign Exchange Code and other CBN regulations.

9 EFEMS shall be used exclusively for executing spot FX transactions involving the Nigerian Naira (NGN) against the United States Dollar (USD). Other currency pairs may be introduced upon the CBN’s directive.

10 Transactions on EFEMS must be settled through approved settlement systems, with participants
bearing responsibility for their obligations.

1 The platform provider must offer real-time support to address system issues. In the event of prolonged downtime, alternative trading protocols will be activated as prescribed by the CBN.

12 Any participant defaulting on settlement obligations will face penalties as determined by the CBN.

Governance and Data Reporting

1 The CBN shall monitor all transactions on EFEMS to ensure market integrity and transparency.

2 Participants must submit daily transaction reports only to the CBN, detailing trade volumes, counterparties, and settlement status. All whole/interbank trades conducted between Authorised Dealers and non-banks participants on telephone and other acceptable channels in the market must be confirmed on the RFQ and reported on EFEMS immediately. Any deal that falls outside the EFEMS parameters, such as same day or next day settlements delivery vs payment transactions where limits are exceeded and deals with non-standard amount should be booked via the RFQ functionality and uploaded automatically to the FX blotter not more than 10 minutes after the completion of the trade.

3 All trade data generated on EFEMS shall be owned by the CBN. The CBN reserves the right to publish aggregated or disaggregated data for market analysis, subject to confidentiality agreements.

4 The CBN reserves the right to review EFEMS operations, including participant activities and system efficiency, periodically.

5 Violations of these guidelines or other applicable regulations shall attract penalties, including suspension or revocation of EFEMS access rights.

Despite the announcement of an interest rate hike by the Central Bank of Nigeria (CBN) on Tuesday, the naira appreciated to N1, 659.44 against the US dollar.

Data from the Nigerian Autonomous Foreign Exchange Market (NAFEM) showed a N16.88 gain against the dollar from the N1, 675.62 it traded at on Monday.

A look at the parallel section of the foreign exchange market showed a gain of N5 for the naira against the dollar, trading at N1,750 compared to the N1,755 it traded at on Monday.

The naira, however, didn’t record any change in trade against the British pound on Tuesday as it still exchanged at Monday’s rate of N2,245 against the pound.

Also, the naira maintained N1,300 against the Canadian dollar but appreciated marginally against the Euro to trade at N1,840/€1 as against the previous day’s rate of N1,845/€1.

The monetary policy committee (MPC) of the Central Bank of Nigeria (CBN) has raised the monetary policy rate (MPR), which benchmarks interest rates in the country to 27.50 percent — from 27.25 percent.

Olayemi Cardoso, CBN’s governor, announced the committee’s decision at a press conference on Tuesday after the panel’s 298th meeting in Abuja.

He said the committee increased the MPR by 25 basis points.

Nigerians across the country are facing cash shortages as the festive season approaches.

Some Automated Teller Machines (ATMs) dispense only small sums—if functional at all—while Point of Sale (POS) operators charge exorbitant fees for transactions.

This crisis persists despite assurances from the Central Bank of Nigeria (CBN) that measures are in place to ensure cash availability.

Just two months ago, the CBN announced plans to sanction banks failing to load cash in ATMs and that it will release an additional N1.4 trillion into circulation over the next three months to improve cash flow within the banking system.

Speaking after the 297th Monetary Policy Committee (MPC) meeting in Abuja, CBN Governor Yemi Cardoso said that all deposit money banks must ensure there is always enough cash available for withdrawals.

This move, Cardoso said, is aimed at ensuring sufficient cash availability in ATMs and across bank branches, addressing the challenges of cash insufficiency that many customers have faced.

He said: “Another N1.4 trillion is likely to be delivered in another three months to aid that whole process of cash within the system and cash velocity.

“So, from our perspective, we are doing everything possible to ensure that there is sufficient cash in the system. There is no excuse for not having sufficient cash in the system.

“Now it goes to the deployment of that cash and quite frankly, we are working very, very closely, we are engaging with all the deposit money banks to ensure that they are putting these things through their ATMs, effectively dispensing cash to those that are in need.

“And whether they are in need or not, that’s the function of the deposit money banks. And at all points in time, there should be sufficient cash in their system that nobody should go there without being able to withdraw.”

Despite these measures, POS operators report challenges accessing cash, pushing transaction fees to unprecedented levels.

In many locations, withdrawing ₦1,000 to ₦5,000 now attracts a charge of ₦100, while amounts above ₦5,000 cost ₦200 to ₦300, depending on the area.

Residents in remote areas, where ATMs are scarce or non-functional, face even higher charges, with some operators reportedly charging ₦100 for as little as ₦2,000 and N200 for amounts above N2,000 and below N5000, and N300 for amounts above N5,000 and below N10,000.

With just 29 days to Christmas, the shortage of cash is forcing many to make drastic adjustments to their finances.

Entrepreneurs and small business owners are among the hardest hit, with some resorting to hoarding cash for essential transactions.

An entrepreneur, Mr John Otafu, told DailyPost that things were just becoming more difficult, noting that customers could only withdraw a maximum of N10,000 at some ATM points, while many ATMs were empty.

“You will just see that you are moving from one point to another, looking for a working ATM to collect your money,” Otafu said.

“The condition is still not pleasant, and this has forced many people to be patronising POS operators.”

A food vendor, Titilayo Abayomi, said the scarcity has forced her to stop saving in the bank.

“I go to the ATM and only get a fraction of what I need for my business. Imagine needing ₦100,000 and being restricted to ₦5,000 or ₦10,000 withdrawals. The banks are benefiting from innocent Nigerians who are working hard just to survive,” Abayomi lamented to DailyPost.

Meanwhile, the National Secretary of the Association of Point of Sale Users in Nigeria (APOSUN), Mr. Isah Zakari, accused commercial banks of exacerbating the crisis by reducing cash withdrawals for POS agents.

Zakari, in a recent statement, alleged that some bank officials sell cash directly to POS operators, prioritizing their personal outlets over customers.

“As an individual, let me not speak as a POS operator. If I need N50,000, I have to go to the ATM to withdraw and when I go to the bank, I also have the right to withdraw. It is my right because I paid the money there.

“So now, the POS operator wants to use money in the bank, but he does not get it. At ATM points, limits on withdrawals have been placed; he cannot get more than N10,000 or N20,000.

“Our members have been complaining, saying the only amount of money they can withdraw is N10,000,” Zakari said.