Banks suspend BDCs’ accounts over tax remittance

Banks have placed a ‘Post no Debit’ notice on the accounts of some Bureaux de Change operators, demanding that they remit taxes on their transaction turnover.

TheCable had earlier reported that the Federal Inland Revenue Service had ordered banks to freeze the accounts of tax defaulters.

Commenting on the development, Aminu Gwadabe, president of the Association of Bureau De Change Operators of Nigeria (ABCON), some accounts were suspended even where there was no evidence of tax default.

He also said the FIRS is demanding that BDCs pay taxes on funds used to bid for their dollar allocations sent to the Central Bank of Nigeria (CBN) on weekly basis through the commercial banks.

“The BDCs are a high turnover sector and their funding cash for dollar collections cannot be subjected to taxes. An average BDC does over N30 million weekly turnover and paying taxes on such funds will affect their cash flow and ability to meet their statutory role of foreign exchange supply to the retail end of the market,” he said.

“In fact, we will be writing to the Central Bank of Nigeria (CBN) to complain about the illegal policy of the ‘Post No Debit’. Presently, most of our members’ funds with the deposit money banks for their bidding obligations are being trapped in the banks.

“This scenario, if not checked, will affect our members’ funding capacity, derail the sustainability of their businesses with the resultant liquidity spikes.”