A concise and proactive financial statement with clear contractual obligations is key to avoiding penalties and interest charges from respective regulators as regards financial institutions especially microfinance banks.
This was the view of experts during a webinar chat titled: Force Majeure and Stamp Duties – Issues for consideration, organised by Accion Microfinance Bank in Lagos at the weekend.
Explaining the term stamp duty and its importance to any economy, Partner, Tax, Regulatory and People Services at KPMG, Ms Nike James, said it was an instrument used by the government all over the world to generate revenue and noted that the Federal Inland Revenue Service (FIRS) was not enforcing the duty which drove people’s mindset that this was new to the Nigerian economy.
Ms James explained that since palliatives were given, one would have expected the government to be more considerate in terms of revenue generation during this period, but that was not the case as it has set a mandate of N1 trillion.
“The big question here: where is the money going to come from? Which industries are at risk? What instruments are at stake? The truth is the financial and banking services are in the eye of the storm as regards this stamp duty issue and there is a need to take action so that we would not be left with huge liabilities that we have to deal with”, she said.
According to her, “there are three key areas we need to look out for. One is the extraneous rate, stamp duty on electronic transfers and demand for stamp duty by state governments and the last point is really not too good because state governments should not come after banks for stamp duty as it is not their duty to do so.
“Therefore, the National Association of Microfinance Banks (NAMB)should focus more on advocacy drive with the FIRS, CBN and Presidency, maintain a common ground, mount legal action in terms of stamp duty on electronic transfer in the last five years just in case advocacy does not work and then get audit checks on our financial statements to avoid penalties from the aforementioned regulators”.
Corroborating her, Senior Associate at Aluko and Oyebode, Ngo-Martins Okonmah, advised microfinance banks to provide flexibility and clarity in their force majeure contracts.
“In case of any pandemic and the government shuts down and opens up again, one can revive the contract and service providers can come back to business without some disruptions. So there is a seamless enabling of activity once the economy is revived.
Managing Director, Accion Microfinance Bank, Taiwo Joda, called for a strong collaborative effort from NAMB and charged other financial institutions to always unearth a proactive and deliberate financial statement to ensure all the gains of financial inclusion are not rolled back.