NEW TAX LAW: Cashless policy in jeopardy as traders avoid bank transfers

*Stakeholders task orientation agency on massive sensitisation

*CBN urged to caution banks on exploitation over 7.5% VAT

BY TOSIN ADAMS (with Agency Reports)

Nigeria’s audacious cashless policy may be in distress as some traders, business owners now prefer cash payment from customers for goods and services rendered owing to the new tax law.

Some of the traders who spoke in Abuja on Sunday, said the move was the interim measure to sustain their businesses and avoid unnecessary charges.

Customers said the development negated the financial inclusion and mobile banking policies of the Central Bank of Nigeria (CBN).

Mr Fidelis Agbo, a trader at the Building Materials market in Mararaba market said that he was confused about the provisions of the new tax law, hence his preference for cash instead of transfers.

Agbo said that the news making the rounds in the market was that the government would collect tax for every money that drops in a person’s account.

”Since the government will not relent in collecting taxes, we have learnt to do our business with wisdom.

”I now collect cash from my customers for goods purchased. I usually direct my customers to a Point of Sale (PoS) person close to my shop to withdraw money.

”What I do for my big customers is that we split the PoS charges between us. My customers pay half and I pay half so that the burden will not be much on them.

”I intend to continue like this until I understand the tax thing better, ” he said.

Mr Khalid Abbas, also a trader at Nyanya market, said the tax law was still very complex in his eyes and other marketers.

Abbas who also said he collected cash from his customers, disclosed that he was worried about the tax implications on electronic transactions.

He said he preferred cash for the fear of being taxed unfairly.

“Cash is straightforward, no complications, no need to involve banks or digital records.

“Before now, I heard that if you put the reason you are sending money to a person (narration), it will not be taxed but later, they said it was not true again.

“As a business owner, I am concerned about the new tax law but I am not sure how it will affect my business.

“To avoid any issues, I prefer to receive cash payments for goods sold just for me to manage my business given the current uncertainty around the tax law,” he said.

Mrs Sarah Onifade, a buyer at Nyanya market, said she was asked to pay tax after the purchase of goods worth over N830,000.

Onifade said the seller received the alert of her transfer but asked her to pay tax of N50,000 on the money as he would be charged by both his bank and the government.

“I was very surprised to hear this because I never understood the tax law like this.

“I ended up paying additional N20,000 to him after so much dragging back and forth. This is frustrating and discouraging” she said.

Mrs Sarah Akator, a business owner, called on various agencies saddled with the responsibility of sensitising the public to do so urgently with a view to making people well informed about the new tax laws.

Akator called on the National Orientation Agency (NOA) and the tax committee to commence awareness and sensitisation programmes, especially in markets and communities to help citizens better understand the law.

She suggested that translating the law into different local languages would aid easy assimilation and understanding.

In a related development, many bank customers have frowned at the 7.5 per cent Value Added Tax(VAT) on selected electronic banking services, saying taxes are becoming too much for citizens.

Some of them who spoke to the News Agency of Nigeria (NAN) in Abuja on Sunday, appealed to the Central Bank of Nigeria (CBN) to ensure that banks did not use the guise of the VAT to exploit its customers.

The customers said that although the VAT applied only to service fees and not the amount transferred, the debits on their monies were discouraging and could deter people from patronising banks.

Mrs Evelyn Oputa, a bank customer decried that taxes and bank charges were becoming too much for ordinary Nigerians.

Oputa who said that citizens were currently facing challenging times, appealed to the government to step down the remittance of the VAT.

“In December alone, I received a debit alert where I was charged N1,680 charge on SMS alone and this month, stamp duty charges also increased.

“I bought something and also received a debit of N250 as stamp duty, NIP transfer, electronic money transfer levy, card maintenance fee and various other charges.

“I heard that the stamp duties collected by banks are being remitted to the government, why do they still want banks to remit VAT.

“We the customers will be the ones at the receiving end,” she said.

Mr Akolam Nzeh, a bank customer alleged that the government was only concerned about tax collection and not the well-being of citizens.

Nzeh urged the government to channel the taxes toward the improvement of infrastructures in the country.

“Its like this year will be a year of tax in this country. Everywhere you turn, you will hear tax.

“The worst part of this is that salaries did not increase yet banks’ charges have kept increasing,” he said.

Another bank customer, Mr Segun Agboola, a customer, appealed to the CBN to monitor the excesses of banks to ensure they did not charge above what they should.

A banker who preferred anonymity said the bank would not exploit its customers in VAT remittances as they were the basis for their existence.