Deposit money banks in the country have raised concerns about the negative effect multiple taxation is having on their financial performance .

According to the banks, the issue is becoming worrisome as it has drastically reduced their profits as well as shareholders’ funds.

The chief financial officers of banks in Nigeria therefore called on all the relevant authorities to look into the issue, adding that it was important for government at all levels to take the issue seriously.

They added that if something urgent was not done to address the situation; it would attain a worrisome dimension and continually erode the profitability of banks.

They noted that the increasing tax burden on the banks was worrisome and advocated the setting up of a committee to engage the government on the need to reduce the burden on the banks.

The CFOs who spoke at the KPMG Banking CFO Forum in Lagos on Thursday, noted that almost all tiers of government, including the National Assembly, were organising different tax audits under different names, adding that the development was affecting the banks’ results.

They noted for instance, that the Lagos State Government, had recently indicated its preparedness to undertake a tax audit of the banks, before their year end, stating that this would be the third tax audit conducted by the state on the banks.

They said, “The Senate also released a long list of companies that it intends to investigate over tax issues. If the Senate is not stopped, this will add to the long list of audits currently conducted on the banks.

“Majority of these tax audits conducted by a number of these governments’ agencies, and other institutions of governance are ridiculous and unnecessary.”

In her presentation, the Associate Director, Tax, Regulatory and People Services, KPMG, Mrs. Nike James, advised the banks to come together and set up an advocacy group, adding that this group should seek waivers, exemptions and dispensation on the excess dividend tax among others.

She further stated that the advocacy group should be able to lobby the Federal Ministry of Finance and the Federal Inland Revenue Service, for waivers and exemption

The Partner & Head, Financial Services, KPMG, Mr. Ayodele Othihiwa, advised the banks that as a short -term palliative to the increasing tax burden, they should have a review of their results, especially in the dividends they declare.

He, however, disclosed that caution should be applied in reviewing the results and dividends, saying that the banks would have to communicate effectively with all stakeholders on this issue.

On the long term, he said the banks should resort to advocacy by setting up a committee that would parley with the government and other stakeholders, beginning from the National Assembly and other key government officials.

Source: Punch/Udeme Ekwere