Churches, Mosques To Report Their Financial Transactions From January, 2013.
Executive Secretary/Chief Executive Officer, FRC, Mr. Jim Osayande Obazee
The Financial Reporting Council (FRC) said it had designed an
accounting system for churches, mosques and other not-for-profit
organisations, adding that it will compel them to report their financial
transactions periodically from January 2013.
Executive Secretary/Chief Executive Officer, FRC, Mr. Jim Osayande
Obazee, who said this in a keynote address presented at the 2012 annual
conference of the Finance Correspondents Association of Nigeria (FICAN)
held in Ijebu-Ode at the weekend, explained that the move was to ensure
that more Nigerians are dragged into the corporate tax net.
This, according to the FRC boss, is also in line with the International Financial Reporting Standards (IFRS).
This came just as the Director, Corporate Communications, Central Bank
of Nigeria (CBN), Mr. Ugochukwu Okoroafor disclosed that in addition to
FSDH Securities Limited which on Friday announced that it has gotten a
license to operate as a merchant bank, a South African bank –Rand
Merchant Bank, has
also been granted a merchant banking license to
operate in Nigeria.
Continuing, Obazee said: “We want to release our Statement of
Accounting Standards (SAS) 32 because we want churches and charities to
begin to present accounts. They just file returns to the Corporate
Affairs Commission (CAC) and so long as they pay the N1000, they are
home and dry. But we are saying that they must report their financial
transactions in proper format.
“Also, once charity organisations engage in non-charity activities,
they would have to submit those goods for taxable purposes. A country is
not run by oil, but by tax. Go to the internet and you see all the
branches of the Redeemed Christian Church in United Kingdom, you will
see their accounts and over there, they fully disclose the amount
collected as a church. But in our own, people are asking me: “Jim, do
you want God to render account.”
He also stressed the need for an independent supervisory body, to
regulate the activities of manufacturing companies in the country, in
order to forestall another crisis in the economy.
“The fact that nobody is regulating manufacturing companies is
completely wrong. We believe that banks take deposit, but we are
forgotten the fact that if we go to Guinness, Nigerian Breweries,
Lafarge, Dangote, even Chivita, they all take depositors. They tell you
that for you to take products from them you have to take deposit and all
these deposits become their working capital, which is interest free.
So, if we are concentrating on just banks because we believe others are
not taking deposits, then the entire system is not protected.
“Excessive credit growth can emerge anywhere in the system and impinge
on the entire system. In the United States, the finger was pointed at
unregulated mortgage brokers. Nigeria too has unregulated areas. For
instance, non-bank finance companies, manufacturing companies and oil
companies are lightly regulated.
“By ignoring these links, and by overburdening the regulated banking
system, we risk driving more and more activity into the lightly
regulated areas. We have forgotten so quickly that we had the now
Unilever (with stock), Cadbury (with stock and Goodwill), well after we
had Apha Merchant bank (with paper profits).”
He insisted that in order to achieve political stability in the
country, there was need to draw more of the poor into the growth process
through financial inclusion. According to him, nearly 75 per cent of
the credit obtained by households that are below median income is from
informal sources.
Commenting further on the activities of the merchant banks, Okoroafor
said: “That is a huge signal of international interest in our market and
we believe that early next year, they will commence operations in
Nigeria. There are several other interests from international in
Nigeria. We have also converted the license of FSDH Securities Limited
to that of a Merchant Bank.
“These merchant banks are more like investment banks. They are going to
be the ones that would help make projects bankable, like
infrastructure. They are also going to assist in ensuring that more
companies are taken to the capital market.”
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