The nonprofit sector in Nigeria has been knocked by several persons who consider it as a fertile ground for money laundering, tax evasion, and other forms of graft. Governors’ wives, government officials, businesspersons among other ‘philanthropists’ have often been accused of using non-governmental organizations (NGOs) or what they fondly call their ‘pet projects’ as profit-making platforms. Due to the widespread skepticism, some players within the sector now complain that they are finding it hard to muster the needed resources.
But like many things Nigeria, the nonprofit sector in Nigeria is a highly regulated sector. The case in Nigeria is often not a lack of policies. The regulations are available. However, are the social entrepreneurs aware or do they feign ignorance? Is their lack of knowledge of the regulatory framework not enforcing the belief that nonprofits (or non-governmental organizations) are indeed safe havens for profiteering? Perhaps, we all just prefer the ‘anyhow-ness’ that has characterized many things Nigeria.
The regulations are available, I will restate, if you do not want your nonprofit to run afoul of the Nigerian regulatory framework. I will mention a few then focus on one.
The Corporate Affairs Commission (CAC) is the first point of call to register your organization. You also have a statutory responsibility to file annual returns to them else you risk stiff penalties. The Federal Inland Revenue Service (FIRS) is another agency. As an NGO, you must show your financials to the FIRS on a yearly basis though the tax is zero. Nevertheless, if you run a business on your nonprofit (say sell books, merchandise, et al) you are expected to pay tax on such services.
If you operate in Lagos state, the Lagos Internal Revenue Service (LIRS) is the agency where you file the monthly Pay As You Earn (PAYE) tax of your employees. If you run in the other 35 states of the federation and the FCT Abuja, you will need to check to know the parallel organizations. The National Planning Commission (NPC) is yet another regulator that you ought to know about.
Let me tell you about SCUML.
In full, SCUML is Special Control Unit Against Money Laundering. This unit of the Economic and Financial Crimes Commission (EFCC) founded in 2005 is mandated to monitor, supervise and regulate the activities of Designated Non-Financial Institutions (DNFIs) in line with the Money Laundering (Prohibition) Act ML (P) Act 2011 and the Prevention of Terrorism Act (PTA) 2011. Among other roles, this regulator must be aware of cash-based transaction report (CBTR) or currency transaction report (CTR) for any organization that is equal and above the reporting threshold of US$1000 (or its equivalent) for all transactions. Thus, it is binding on your organization by law to report grants, donations, and other transactions that is US$1000 and above.
So what do you think?
Are Nigerian nonprofits really safe havens for profiteering?
What do we need to pep these multifarious regulations?
Do you want to know more about the Nigerian nonprofit sector?
Share your comments with me below.
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Abayomi Oyelami is a creative who does everything writing – books, memoirs, articles, online blogs, newspaper columns, social media contents, and a bit of poetry. He is the editor of Trek Africa Newspaper, Nigerian news weekly with focus on business and governance; content curator for the website and social media for a Lagos-based health NGO, Sickle Cell Advocacy and Management Initiative (SAMI), and the author of a children’s classic, Finding Purpose for Kids. His personal blog, www.yomisjournals.com.ng is a pot pourri of interesting and educating content that will drive you to significance. The fellow of Young African Leaders Initiative (YALI) believes now is the time for Africa to take her pride of place and Africans should brace up for the task. ‘Yomi is black to the bone! Find him across all social media @yomioyelami