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Relief for SMEs as FG adopts new withholding tax policy 



The Federal Government has adopted a new withholding tax policy which will bring relief to thousands of small and medium-sized enterprises (SMEs) throughout the country.

This development is expected to bring clarity and simplicity to the tax system, which has been plagued by ambiguities and complications since its introduction in 1977.

The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, said that the newly approved withholding tax regulation will be published in the official gazette soon.

Withholding tax is an advance payment of income tax that can be used to offset or reduce tax liabilities.

The Federal Inland Revenue Service (FIRS) deducts withholding tax at varying rates of 5-10 percent depending on the transaction.

However, the previous regime was criticised for its complexities, which led to excessive compliance burdens on businesses, especially small and medium-sized enterprises (SMEs).

Oyedele revealed that the federal government has exempted small businesses earning N25 million or less from withholding tax, effective June 3.

This exemption is expected to provide relief to SMEs, which have been struggling to comply with the complex tax regulations.

The new regulation also introduces reduced rates for businesses with low margins, as well as exemptions for manufacturers and producers, such as farmers.

The chairman of the presidential committee noted that the previous regime was marred by ambiguities regarding persons required to comply, eligible transactions, applicable rates, and timing of remittance.

These ambiguities led to tax evasion, avoidance, and difficulties in obtaining refunds for excess withholding tax.

Moreover, the lack of exemption threshold made compliance and enforcement uneconomical for both taxpayers and the tax authority.

The newly approved regulation addresses these challenges by providing clarity on the timing of deduction and definition of key terms.

It also adopts global best practices to ensure that the tax system is fair, equitable, and conducive to business growth.

Oyedele emphasised that the regulation has been updated to reflect emerging issues and contemporary challenges, ensuring that the tax system is dynamic and responsive to the needs of businesses.

The publication of the new regulation in the official gazette is expected to provide a much-needed boost to Nigeria’s business environment.

By simplifying the tax system and reducing compliance burdens, the government aims to encourage entrepreneurship, stimulate economic growth, and increase revenue generation.

As Oyedele noted, the new regulation is a significant step towards creating a more conducive environment for businesses to thrive in Nigeria.

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774 LGAs gain financial autonomy, as S’Court orders direct allocation of funds



…Apex Court orders direct allocation of 20.6% Federation Account to LGAs

…People can now hold local leaders accountable – Tinubu

…Atiku hails ruling, calls it victory for Nigerians

…Return LGA funds or face legal action — SERAP tells 36 governors, Wike

By Our Correspondents

In a landmark judgement, the Supreme Court of Nigeria has ordered the federal government to pay 20.6 percent allocation from the federation account directly to the 774 local government areas (LGAs) for their development.

The apex court on Thursday faulted state governments for exploiting the LGAs for decades, citing a clear violation of the 1999 Constitution.

The Attorney General of the Federation and Minister of Justice (AGF), Prince Lateef Fagbemi (SAN), had argued that the governors have failed to put in place democratically elected local government systems, despite the Constitution’s provisions.

”To continue to disburse funds from the Federation Account to governors for non-existing democratically elected local governments is to undermine the sanctity of the 1999 Constitution,” Fagbemi submitted.

The AGF prayed the apex court to hold that FAAC allocations to local governments should go directly to their accounts, rather than joint accounts between states and LGAs, which empower governors to do as they please with the funds.

In the apex Court judgement, Justice Emmanuel Agim said the Supreme Court has unlimited powers to preside over issues between the federation and the state.

He dismissed the defendant’s preliminary objection against the AGF’s right to file the suit, stating that the suit aimed at protecting the constitutional structure of the country is within the legal right of the AGF.

Agim held that the 1999 Constitution stated that the amount standing to the credit of the three tiers of government shall be “distributed” to each of the arms of government, without intending joint accounts for the three tiers of government.

He explained that in the past, FAAC allocations were sent to joint state-LGA accounts for onward transfer to the LGAs, the “original owners of the LGA allocations.”

The Supreme Court’s verdict is a significant victory for local government autonomy, ensuring that LGAs receive their allocations directly and independently manage their funds for development purposes.

He said that procedure was adopted to stop LG councils from coming to the federal capital for their share.

He said it is the local government council that should control and manage funds due it from the federation account.

“I hold that the state’s retention and use of the local government accounts is unconstitutional,” Agim said.

He stressed that the allocations to joint accounts was merely a procedure that was adopted in the past.

He added that the states have been “exploiting” the role given to them to transfer LGA allocations to the respective councils, “for decades.”

“As it is, the states, after collecting the local government allocations from the federation account, have continued to refuse to pay it to their owners.

“The state’s refusal to pay this money to the local governments has gone on for over two decades now. This has deprived the local governments of their rights and defeated the intention of the 1999 Constitution.

“The states are exploiting the roles given them by the Constitution.

“The approach of a direct payment to the LGA will achieve the intention of the 1999 Constitution, “ Agim held.

“The federation can pay local government allocations directly to them (LGAs) or pay them through states.

“But the justice of this case demands that the LG allocations should henceforth be paid directly to Local government accounts, “he held.

On the LG autonomy and running of its affairs, Agim said governors have no power to determine how affairs are run in the LGAs.

“I hold that the plaintiff’s case succeeds,” he said, adding that the 36 states acting through its governors are barred from interrupting the election or affairs of democratically elected LGA councils.

After the lead judgement was read, the presiding judge, Garba said the apex Court had observed that successful state governments had used their executive powers to impoverish the LGAs.

“What is worrisome in this case is the attitude of the state governments and the state House of Assembly, “ the apex Court held.

The apex court advised the states to note that there is a sacred duty for laws to be made for the benefit of the people.

“The defendants have wasted their precious time in the suit,” the apex Court held.

…Atiku hails ruling, calls it victory for Nigerians

Also, Presidential candidate of the Peoples Democratic Party (PDP), Atiku Abubakar, has expressed his approval of the Supreme Court’s decision granting financial independence to local government councils across Nigeria.

The apex court ruled that it is unconstitutional for state governors to withhold funds designated for local government administrations, emphasising the financial autonomy rights of local governments.

Atiku hailed the verdict as a victory for the Nigerian populace, faulting the previous system where funds meant for local councils were merged with those of state governments.

He argued that this system resulted from rushed political agreements. The former Vice President aligned with the Supreme Court’s decision, emphasising that local governments should be centres of development and enjoy fiscal autonomy, including internally generated revenue.

…Lagos Assembly summons State AG, seeks clarification on Apex Court’s  Judgement

In the same vein, the Lagos State House of Assembly has invited the state’s Attorney-General, Lawal Pedro, to explain the Supreme Court’s landmark judgement granting financial autonomy to local governments. The apex court ruled that withholding funds from local governments is unconstitutional, emphasising their financial autonomy rights.

The lawmakers seek clarification on the judgement’s implications for the state, particularly in relation to certain constitutional provisions. “There is a need for us to seek clarification and understanding of this judgement,” Speaker Mudashiru Obasa ruled. “It will be good to invite the Attorney-General to brief us and give his understanding so that we do not run foul of the judgement.”

The Assembly also resolved to commend the Inspector-General of Police, Kayode Egbetokun, and the Lagos State Commissioner of Police, Adegoke Mustapha Fayoade, for their successful operation against kidnappers in the state.

“The police and men of the force who took part in the operation need to be commended,” Obasa said. He stressed the need for stakeholders to fast-track considerations for the creation of state police to support the federal police system.

Majority Leader Hon. Noheem Adams recalled the police operation that eliminated nine kidnappers in the Ladipo area, resulting in calm in the area and relative peace in Ikorodu.

The Association of Local Governments of Nigeria (ALGON), Osun State chapter on Thursday expressed the readiness to ensure that Supreme Court judgement on the Local Government’s financial autonomy is realised in the State.

Speaking through Ojuolape Odetola, the Chief Press Secretary, the state ALGON chairman, Sarafa Awotunde, described the supreme Court verdict as a welcome development.

Awotunde said, “Governor Ademola Adeleke is always interested in what will bring developments to all the Local Government.

“We are happy with the judgement and ready to make sure that the pronouncement is realised in Osun State.”

Speaking also a politician Charles Adeyemi lauded the Supreme Court of Nigeria for upholding its responsibility as the ultimate refuge for the common man.

Adeyemi, the Executive Director, Charleston Foundation For Youth Development, Osogbo, stated that the Supreme Court’s verdict reveals that with time, change is inevitable.

Meanwhile, the Chairman, Committee for the Defense of Human Rights (CDHR) Osun State chapter described the Supreme Court verdict as a fantastic judgement.

Olowu said as a democratic conscious people, had it been we are democratically conscious we should go to the streets today to celebrate that judgement.

“My position is that, had it been we were in a country where the citizens are politically conscious, and political parties understand ideas behind the existence of a political party, everyone of us should be on the streets to celebrate this judgement by now.

“Because when we are talking about the development of the people, development has to come from the grassroots and over time even before the struggle of this issue started. The state government has always been hijacking the affairs of the local Government as a result of that, it has been making our local government redundant and for them not to even have anything to do even in our democracy.

“In that judgement also, it’s said that any state government that does not have an elected local Government Chairmen, allocation should not go to such a state again,” he added.

Also, an Abuja based legal practitioner, Barrister Jacob Brown Udobang has hailed the landmark judgement on Local Government autonomy by the Supreme court of Nigeria describing it as a victory for the third tier of government in Nigeria.

Barrister Udobang, who spoke to NewsDirect on the telephone from Abuja expressed his excitement and commended President Bola Ahmed Tinubu and the Federal Government for taking the bull by the horns.

He said, with development Nigerians are going to witness all round development and financial autonomy across board.

According to him, “This is a landmark victory for democracy and Nigerians as a whole.

“For the first time, since the introduction of the Local Government as the third tier of government in Nigeria, I believe with this victory for the Local Governments in Nigeria, we are going to witness developments at the grassroot.

“Financial Autonomy is the real autonomy as it will affect both political and economic developments”.

He called on Nigerians to support the federal government in its strides to develop the country and prayed God to bless our leaders,  the Federal Government and the judiciary for the giant strides.

Recall that the Supreme Court I a judgement today held that, it is illegal for Governors to dissolve democratically elected Local Governments and ordered the Federal Government to henceforth withhold allocations to Local Governments governed by unelected officials appointed by the Governor.

The apex court also barred the Federal Government from further paying of Local Government allocations through the State Governments, since the practice has been abused by Governors, who retain the funds and utilise them as they please to the detriment of the LGAs for which the monies are meant.

The pronouncements were made in the judgement of the Supreme Court in the LG autonomy suit filed by the Attorney General of the Federation (AGF), Lateef Fagbemi SAN on behalf is the Fed Government.

…Osun APC hails judgement, moves for reinstatement of Chairmen elected under Oyetola

Reacting also, the All Progressives Congress (APC), Osun State chapter, has hailed the Supreme Court judgement granting an unconditional autonomy to Local government.

The party in a statement issued by the party’s Director of Media and Information, Chief Kola Olabisi on behalf of the party Chairman, Sooko Tajudeen Lawal stated that the elected council chairmen recognised by the Supreme Court judgement are the ones elected under the administration of former Governor Gboyega Oyetola now Minister of Marine and Blue Economy as it is on record that they went through the crucible of elections.

Lawal explained that it was long overdue and that it would catalyse, fast track and percolate the development of the rural areas as there would not be any excuse for any of the local government council chairmen not to perform.

He disclosed that the effect of the landmark judgement on Osun State is that all the appointed caretaker chairmen by Governor Ademola Adeleke have become a bunch of illegality in the eyes of the law of the land.

Lawal who explained that justice was not only given in the landmark judgement went further that judgement was duly served to the admiration of the highest percentage of the people of this country.

…Return LGA funds or face legal action — SERAP tells 36 governors, Wike

Socio-Economic Rights and Accountability Project (SERAP) has urged Nigeria’s 36 governors and the Minister of the Federal Capital Territory, Abuja, Mr Newsom Wike “to immediately account for and return the local government funds which they have collected over the years.”

SERAP’s call is coming on the heels of the landmark decision by the Supreme Court declaring unconstitutional and unlawful the retaining and using by the 36 state governors and FCT minister of funds meant for the 774 local governments in the country.

In a statement signed by SERAP deputy director Kolawole Oluwadare, the organisation said: “We applaud the Supreme Court for this groundbreaking decision which will end the persistent alleged misappropriation by several of trillions of FAAC allocations or public funds meant for local governments.”

SERAP said, “Following the Supreme Court judgement, there is now a clear legal precedent to hold governors and FCT Minister to account for how they have spent the local government funds collected by them.”

The statement, read in part: “Implicit in the Supreme Court judgement is the requirement for the governors and FCT minister to immediately account for and return the funds meant for local governments but retained and used or allegedly misused by them.”

“Accounting for and returning the LGA funds collected would build trust in democratic institutions and strengthen the rule of law.

“The National Assembly must urgently amend the provisions Section 162 of the Nigerian Constitution 1999 [as amended] to ensure that local government allocations from the Federation Account are directly paid to local government areas and not collected by governors and FCT.

“If the governors and FCT minister fail to account for and return the funds meant for local governments in their states and FCT within 7 days, SERAP shall consider appropriate legal actions to compel the governors and FCT minister to comply with our requests in the public interest.

“It is in the public interest for the governors and FCT minister to immediately account for and return the funds meant for local governments in their states and the FCT since 1999.

“Accounting for and returning the local government funds collected would alleviate poverty, improve access of Nigerians to basic public goods, and enhance the ability of the local governments to effectively and efficiently discharge their constitutional and statutory responsibilities.

“It would be recalled that former president Muhammadu Buhari had in December 2022 stated that, “If the money from the Federation Account to the State is about N100m, N50m will be sent to the chairman but he will sign that he received N100 million. The chairman will pocket the balance and share it with whoever he wants to share it with.’

“According to Buhari, ‘If the money from the Federation Account to the State is about N100 million, N50 million will be sent to the chairman but he will sign that he received N100 million. The chairman will pocket the balance and share it with whoever he wants to share it with.’

“The 36 states in Nigeria and the federal capital territory, Abuja, have reportedly collected over N40 trillion federal allocations meant for the 774 local governments areas in the country and FCT.

“The Federation Account Allocation Committee (FAAC) disbursed to states N225.21 billion federal allocations meant for local governments in November 2023 alone. States also collected N258,810,449,711.47 federal allocations meant for local government areas in December 2023.”

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Court remands Ex-Power Minister in Kuje prison, adjourns case



By Matthew Denis

A Federal High Court in Abuja has ordered the remand of former Minister of Power, Saleh Mamman, in Kuje prison pending the consideration of his bail application.

Mamman was arraigned on a 12-count charge bordering on money laundering offences and pleaded not guilty. The court adjourned the hearing of the bail application until the next day, July 12.

Mamman’s lawyer, Femi Ate (SAN), had filed a bail application, but the prosecuting lawyer, Olumide Fusika (SAN), noted that it was not yet in the court’s file.

The court granted Ate’s request to argue the bail application the next day, which was not opposed by Fusika.

The trial is set to commence soon, with the EFCC accusing Mamman of involvement in money laundering offences.

The former minister’s remand in Kuje prison pending bail is the latest development in the case.

The judge then adjourned till Friday, July 12, for the hearing of the bail application and ordered that the defendant be remanded in Kuje correctional centre.

The defendant, who his lawyer said is ill, looked dejected while stepping off the dock, shortly after the judge’s pronouncement.

The arraignment of Mr Saleh Mamman, former Minister of Power under ex-President Muhammadu Buhari, stalled after he collapsed outside the courtroom of the Federal High Court, Abuja.

Mamman, whose plea was fixed for Thursday morning, collapsed before the case was called

The former minister’s counsel, Femi Ate, SAN, told Justice James Omotosho shortly when the matter was called for Mamman to take his plea.

Upon resumed hearing, the ex-minister walked into the courtroom and stepped into the dock with part of his clothes drenched.

Justice Omotosho then asked why Mamman was sweating or whether it was raining outside.

The former minister, who responded from the dock, said water was poured on him.

The Economic and Financial Crimes Commission (EFCC)’s lawyer, Adeyinka Olumide-Fusika, SAN, while addressing the court, said though the matter was fixed for Mamman’s arraignment, there was a development outside the courtroom.

Olumide-Fusika said he had a discussion with Ate outside the courtroom about Mamman’s ill-health.

“I was informed of an incident outside. I will want my learned senior advocate to tell the honourable court himself,” he said.

Speaking, Ate said Mamman “upon being brought into the premises of the court, collapsed and had to be resuscitated and treated by the medical personnel of the Federal High Court.”

He said his client was served with the charge after he was resuscitated.

“He was served this morning,” he added.

The senior lawyer said he sought the understanding of Olumide-Fusika for an adjournment so that the arraignment could be done on Monday when his client would have been okay.

But the judge said due to the workload in the court dockets, the arraignment could only be fixed for September ending.

Ate then withdrew the oral application for an adjournment.

Olumide-Fusika said he had just filed an amended charge earlier in the morning following a mistake in the name of the defendant and prayed the court that the fresh charge be read to Mamman to take his plea but Justice Omotosho disagreed with him.

The judge, however, asked Mamman if he was fit enough to take his plea today, and he responded in the affirmative.

The former minister explained to the court that he collapsed outside the courtroom because of the drugs he took when he had not eaten, and while he was outside the courtroom waiting to be called, his blood pressure dropped.

Mamman, however, said he was fit to continue with the arraignment.

“It can happen to anyone,” the judge said.

The ex-minister told the court that he called the attention of his lawyer to the error made by the EFCC on the name in the charge served on him.

“I was complaining about the name, that it was not my own,” he said.

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NDDC commences emergency repairs of East-West road



The Niger Delta Development Commission (NDDC) has commenced emergency repairs at the failed sections of the East West Road between Ahoada and Ula-Okobo town in Ahoada West Local Government Area of Rivers State.

The NDDC Managing Director, Dr Samuel Ogbuku, who inspected the on-going repair works at the failed sections of the East West Road between Ahoada and Ula-Okobo town in Ahoada West Local Government Area of Rivers State, appealed to motorists to cooperate with the contractor undertaking the repairs.  Ogbuku stated that the emergency repairs would restore the link between Rivers and Bayelsa states and observed that the contractor was having challenges with taking construction materials to the bad spots that needed to be fixed.

The NDDC Chief Executive Officer, who was accompanied by other Directors of the Commission, was given an on the site briefing by the engineers of Webster Global Ventures, the construction firm handling the project for the Commission.

Ogbuku observed that the deplorable state of the road necessitated the emergency measures the NDDC was taking to immediately restore the road and make it motorable.

He apologised to road users, especially truck drivers, who had been stuck at the bad spot for several days, assuring them that the NDDC would support the efforts of the Federal Ministry of Works, which was constructing huge culverts at the sections that were washed away during the 2022 flood.

The NDDC boss assured that the Commission would complement the efforts of the construction company working for the Ministry of Works to urgently fix the failed and unmotorable sections of the road to restore the links between Rivers, Bayelsa and Delta states.

He said, “We were here a week ago and we saw it was impossible for any vehicle to ply between Rivers and Bayelsa States. After that visit, we promptly engaged a construction firm to urgently fix about 1.5-kilometres that were virtually impassable. Our inspection today has shown that we need to work on more sections of the road.”

The Managing Director of the construction firm handling the repairs, Engr. Opeoluwa Adara, assured the NDDC that the company would expedite action on the repair work. He regretted that some of the motorists were making it difficult for them to bring in materials for the repairs.

He promised that the road links to Rivers, Bayelsa and Delta State would soon be restored, noting: “It is challenging but we have been working to stabilise the bad sections and make them motorable.”

One of the truck drivers, stuck at Okobo, Malam Sani Ahmed, lamented that he had not been able to move his vehicle for over one week. He appealed to the Federal Government and the NDDC to come to their aid by fixing the road, stating that they were at the mercy of criminals who were taking advantage of their helplessness.

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