E-Financial
Nigeria Still in Global Tax Deal – Zainab
Zainab Ahmed, minister of Finance, Budget and National Planning, has said the country has not opted out of the global tax deal.
The global tax deal is negotiated under the Organisation of Economic Cooperation and Development (OEDC)/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS).
Speaking at the sideline of the hybrid 2022 spring meetings of the International Monetary Fund and the World Bank in Washington DC, United States, she said: “We have raised some issues that we are not comfortable with, therefore have not been able to sign up with other countries. We feel that somewhere along the line, they will recognize the limitations we have seen, and also make some necessary adjustments.”
Speaking on the concerns raised by ministers of finance at the meeting, the Minister said the Ukraine war has an impact on the global economy especially with food security challenges.
“In the case of Nigeria, it is also affecting us in terms of input for our fertilizer production and the biggest one is the high prices of energy. Nigeria produces fertilizer and now exports it but one of the major inputs for it is potash but it is threatened by the war. So, while the inputs are being received, the cost is high so it is driving up the price,” Ahmed noted.
She however said the federal government under the Presidential fertilizer initiative may raise support to the fertilizer blending plants to help subsidize the prices.
For context, BEPS refers to corporate tax planning strategies used by multinationals to shift profits from higher tax jurisdictions to lower tax jurisdictions or no-tax locations where there is little or no economic activity, thereby eroding the tax base of the higher-tax jurisdictions using deductible payments such as interest or royalties.
The OECD estimates that countries lose $100-$240 billion worth of revenue annually to BEPS practices, which is the equivalent to 4-10 per cent of the global corporate income tax revenue.
The deal set out to introduce a global minimum tax rate and new profit reallocation rules, which aim to give countries a fairer chance to collect tax revenues from multinational enterprises (MNEs) operating in or generating revenues from their jurisdictions.
FirstBank has formally denied allegations of fraud in an ongoing court case filed by customer Dr. Agbai Eke, describing the claims as “entirely unfounded and false.”
According to a statement from the bank, their internal investigation points to “unprofessional and unethical dealings” between Dr. Eke and a former bank employee.
FirstBank claims these individuals used a personal relationship to conduct unauthorised transactions without the bank’s knowledge or involvement.
The bank said it has reported the matter to law enforcement authorities for further investigation.
Officials noted that suspects have already provided statements to investigators.
FirstBank also declined to provide additional details, citing the ongoing court proceedings.
“We will refrain from further comments to allow the Court to dispassionately determine the issues before it,” the bank stated.
The case gained public attention following reports by Thisday Newspaper and Arise Television, as well as through a circulating video regarding the legal dispute.
Nigeria is undergoing a significant shift toward digital payment methods, with cash payments projected to decline by 32 percent by 2030, according to Worldpay’s Global Payment Report 2024 (GPR).
This is because access to financial services in remote areas via smartphones has transformed millions of people’s access to the global economy.
According to the report, Nigeria led Middle Eastern and African countries in cash dominance for point-of-sale transactions, accounting for 40 percent of 2024 PoS value from 91 percent in 2019.
The report said the use of cash in Nigeria is higher when compared to the MEA region including Saudi Arabia with 22 percent in 2024, South Africa (30 percent), and the UAE (17 percent).
“Over the past decade, Nigeria has witnessed progress in financial inclusion. According to the World Bank, the percentage of banked Nigerians increased from 30 percent in 2011 to 45 percent in 2021. Similarly, South Africa’s banked population grew from 54 percent in 2011 to 85 percent in 2021,” it said.
The Nigerian Inter-Bank Settlement System (NIBSS) reported that the number of active bank accounts surged to 311 million in 2024, further underscoring the country’s rapid financial transformation.
The global report disclosed that account-to-account (A2A) transfers via the NIBSS Instant Payments (NIP) have emerged as the leading e-commerce payment method in Nigeria.
Furthermore, A2A payments via NQR are now the second most popular payment method at the PoS, trailing only cash. This surge in A2A usage underscores the growing adoption of instant payment systems in the country.
Recent data shows that electronic payment transactions in Nigeria rose to an all-time high of N1.07 quadrillion in 2024. This is a 79.6 percent increase from the N600 trillion recorded in 2023.
Beyond transaction value, the volume of e-payments also saw a substantial increase. The total number of transactions processed by NIBSS rose from 9.7 billion in 2023 to 11.2 billion in 2024, representing a 15.5 percent year-on-year growth.
Also, PoS transactions soared to N19.4 trillion in 2024, marking an 81 percent increase from N10.73 trillion in 2023.
Industry experts attributed the surge in electronic transactions to a combination of factors, including the cash scarcity experienced in early 2023 and the continued implementation of the Central Bank of Nigeria’s (CBN) cashless policy.
The GPR report highlights MEA’s progress in digital payments, with e-commerce transactions accounting for 29 percent of total value in 2014. By 2024, digital payments represented 49 percent, nearly matching the combined value of cash and card transactions (51 percent). By 2030, digital payments are expected to dominate e-commerce, making up 65 percent of transaction value.
“The shift is even more pronounced at PoS. In 2014, digital payments accounted for only 1 percent of PoS transaction value. By 2024, they had grown to one-third of the market. Worldpay projects that by 2030, digital payments will account for 47 percent of PoS transaction value, nearly equalling traditional cash and card payments,” it said.
Nigerian Computer Society (NCS) has expressed concern over the Federal Government’s decision to replace Remita Payment Service Ltd with the Treasury Management and Revenue Assurance System.
Dr. Sirajo Aliyu, president, NCS, who spoke a press conference in Lagos, highlighted the potential impact of the decision on Nigeria’s indigenous Information Technology (IT) sector.
Remita, a subsidiary of SystemSpecs Software Technology Group, has provided payment solutions for individuals and organisations for nearly two decades, maintaining a 100 per cent Nigerian workforce. The government’s move, announced on 4 March, has raised concerns about its implications for local IT firms and the wider economy.
Dr Aliyu warned that replacing Remita could send the wrong message to local IT companies, discouraging investment in homegrown technological solutions.
He emphasised that the Treasury Single Account (TSA), powered by Remita, was a fully indigenous project that had been globally recognised for its success.
“We are concerned that this decision could undermine confidence in Nigeria’s IT industry.”
“While the government has the right to make changes, such decisions should involve extensive consultation with stakeholders to avoid unintended consequences,” Aliyu stated.
He added that the TSA had improved transparency, increased government savings, and enhanced operational efficiency in fund management. The sudden replacement of the platform, he cautioned, could disrupt these benefits.
Prof. Charles Onyeukwu, vice-president, NCS, also urged the government to reconsider its decision, noting that Remita had been selected through a rigorous process involving both local and international firms.
He suggested that instead of replacing the system, an Application Programming Interface (API) could be introduced to allow additional service providers to integrate with it.
“We believe a collaborative approach would ensure continuity while enhancing the system’s functionality,” Onyeukwu said.
A memo from the Office of the Accountant-General of the Federation confirmed that the Treasury Management and Revenue Assurance System would be implemented in two phases, starting on 4 March 2025.
The new system is designed to streamline revenue collection and payments across ministries, departments, and agencies.
The NCS, Nigeria’s premier body for computing and IT professionals, has called on the government to engage with Remita and other stakeholders to find a solution that supports both national development and the growth of the indigenous IT sector.
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