Home Banking | Finance | Money security UBA, FSDH Involved In $2.9 Billion Tax Fraud

UBA, FSDH Involved In $2.9 Billion Tax Fraud


Olushola Akinyele | PressTv

The joint committee on Finance and Banking & Currency has directed FSDH Merchant Bank and the United Bank for Africa (UBA) to provide more details over alleged Withholding Tax (WHT) underpayment, Foreign Exchange inflows and outflows infractions running into billions of Naira.

The joint committee gave the directive at their sitting on Monday when officials of the two banks appeared before the committee. The committee is investigating an alleged $30 billion revenue leakage between 2010 and 2019.

According to the report of the first phase investigation conducted by the joint committee of the House on Finance and Banking & Currency, United Bank for Africa (UBA) allegedly underpaid WHT and VAT worth $2,838,296,330.74; foreign exchange leakages worth $25,199,851,112.97 for the period under review.

FSDH Merchant bank management appeared based on an alleged underpayment of $2.698 million in Withholding Tax and Value Added Tax and foreign exchange leakages amounting to $7.264m.

The committee had in a letter to FSDH in March 2021 said it has completed the first phase of its investigations and made some findings. FSDH Executive Director, Taiwo Otiti explained to the committee that, the bank has records of all the transactions and have presented them to the committee in hard and soft copies.

Chairman, House Committee on Finance, James Faleke who chaired the session directed that the bank should provide the details in two weeks.

Officials of the United Bank for Africa (UBA) also appeared before the committee for the infractions.

UBA Head of Trade, Chidi Okpara said some of the withholding taxes allegedly underpaid by the bank did not qualify as withholding tax as adduced by the committee.

Chairman, House Committee on Banking and Currency, Victor Nwokolo who presided over the second session said, the bank must produce hard copies of all the documents presented in soft copies to the committee.

The lawmakers at the hearing expressed grave concern over the flagrant breach of extant financial regulations and relevant provisions of the 1999 Constitution (as amended).

“The Committees wish to inform your bank of the completion of its first phase of investigation of your bank’s level of compliance with extant laws and regulation, with respect to the administration and management of foreign exchange transactions’ inflows and outflows as they relate to Unpaid taxes (VAT & WHT) on applicable foreign transfer payments by your bank and customers for the reason of neglect, in ensuring evidence of such payments are submitted before any applicable Foreign Transfer payments are made.

“Foreign exchange leakages arising from the mismanagement of inflows from capital importation, and capital outflows on account of any validly issued certificate of capital importation.

“Verification and confirmation from your customers’ bank statements, of the utilization of the Naira proceeds of capital importation any taxable transactions.

“Confirmation and verification in your banks’ sales blotters of the utilization of Foreign Exchange purchased by your bank from each of the sources such as Capital Importation, CBN, Interbank, Export proceeds (Oil and Non-Oil Domiciliary accounts, Over the counter etc.

“Identification and recognition of capital repatriation transaction costs and its related taxes (VAT, Stamp Duty) on stock sales transactions cost paid to Fund Manager/ Stockbrokers’ fees, NSE, CSCS etc.

“The reasonableness and legitimacy of every foreign transfer for the reason of observed cases of capital flight and other illegitimate repatriations on account of invalidly issued Certificates of Capital Importation.

“Comparison of Form ‘A’ and Form ‘M’ filed with the Committees, and other extractions obtained from customer’s dollar and naira account statements, and your bank’s record of foreign exchange utilization returns with the Central Bank of Nigeria”, the joint panel told the banks.

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