Commercial banks in Niger State have been ordered by the Central Bank of Nigeria (CBN) to go on strike unless the state’s Internal Revenue Service withdraws the tax levied against them.
According to a communication to banks’ staff seen by Daily Trust from one of the affected bank’s branch managers, the apex bank gave the directive at a bankers’ committee meeting with the CBN Branch Controller in Minna last week.
The Niger State Internal Revenue Service had days ago shut down some commercial banks for alleged tax evasion.
The CBN’s instruction came after intelligence that the state board of internal revenue will likely close the remaining banks on Monday.
“Dear colleagues, kindly be informed that we are shutting down services with immediate effect. This is mandated by CBN Branch Controller in the meeting with Banks yesterday. It is in protest against Niger State Government’s outrageous tax levies against banks in the state. Kindly attend to the customers in front of you and clear out,” the message read.
The Banker’s Committee questioned Zenith Bank’s Minna Branch, which had been hesitant to comply with the CBN’s order.
The Banker’s Committee expressed its displeasure with Zenith Bank’s failure to immediately comply with the order, according to a message shared among the committee’s officials.
“All banks shut down as at 9am in compliance to the shutdown directive with the exception of Zenith Bank due to their claim of not been able to get approval to shut down. This prompted a meeting at the CBN conference room with the Branch Controller where it was agreed that a letter of displeasure signed by all bank representatives and the CBN is sent to Zenith Bank,” the apex bank said.
According to reports, eight banks and three other enterprises were shut down last week Monday for failing to pay a total tax liability of N460 million to the state government’s coffers.
A source who spoke to has also confirmed that all banks in Minna, the state capital are closed and that some ATMs may be shut down as well.
What the CBN and Banker’s Committee are saying
The Branch Controller, CBN Minna said “If we don’t get any response from Niger State Board of Internal Revenue, the action should continue on Monday 13th September 2021.”
The Banker’s Committee threatened in a follow-up email that unless the Niger State Board of Internal Revenue reopened the closed banks and retracted “bogus tax claims levied against the DMBs”, the shutdown will continue.
The strike by the banks, according to Hussaini Abdulrahman, Special Adviser, Media and Communications, Niger State Internal Revenue Agency, is an attempt to blackmail the state internal revenue service.
“This strike was instigated by the Access Bank. a letter was written to Access Bank to come forward and clear their outstanding debt. Instead of responding in the right way, they went and manipulate other banks using Bankers Committee and started the strike. About six banks earlier sealed have made substantial payments. Rashida Restaurant paid N1.5m out of the N3m it owed the state. AEDC had also made some payments and they have been unsealed,” Abdulrahman said.
Also, the Board of Internal Revenue in an official statement on Sunday said it was not deterred by the collaboration between the CBN and commercial banks in the state to threatened the board.
“‘It is unfortunate that a body with which the Revenue Service has no transactions, will collaborate with CBN officials to threaten the Service from performing its lawful duty of collections of revenue on behalf of Niger state government,” it said.
The board said that six of the eight banks originally sealed had fulfilled part of its demand and were already unsealed pending further reconciliation.
The statement, therefore, appealed to the people of the state especially those whose branches remain sealed to impress on their banks to settle their outstanding tax liability to enable them meet their customers daily financial obligations.