The House of Representatives on Wednesday unveiled plans to probe the status of unclaimed dividends and accrued withholding tax on dividends worth N126.03 billion as at the March 2019.
The resolution was passed following the adoption of a motion on the need to investigate the rising value of unclaimed dividends, unremitted Withholding Tax on Dividends and their attendant effects on the nation’s economy,’ sponsored by Hon. Babangida Ibrahim.
In his lead debate, Hon. Babangida expressed concern over the development despite the intervention of the 8th Assembly as well as the adoption of electronic dividend payment method, dematerialisation of share certificates, acceptance of dividend warrants in both savings and current accounts.
In the bid to address the challenges, the lawmaker harped on the need for consolidation of accounts by the Central Securities Clearing System (CSCS) and Registrars as well as resuscitation of publication of names of owners of unclaimed dividends by companies.
“The House notes the continued increase over the years of unclaimed dividends, and by implication unremitted withholding tax on dividends in Nigeria.
“The House also notes that while the value of unclaimed dividends in 1999 was just N2.09 billion, between 2002 and November 2016, the value of unclaimed dividends has increased from N5.1 billion to N103.1 billion.
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“The House further notes that almost three years after the 8th House of Representatives’ intervention, the value of unclaimed dividends as at March 2019 stands at a whooping sum of N126.03 billion.
“The House is aware of the mechanisms put in place to address the issue of rising value of unclaimed dividends such as adoption of electronic dividend payment method, dematerialisation of share certificates, acceptance of dividend warrants in both savings and current accounts, need for consolidation of accounts by the Central Securities Clearing System (CSCS) and Registrars, need to resuscitate publication of names of owners of unclaimed dividends by companies among others, have been applied with no significant positive outcome.
“The House is also aware of the implications of large value of unclaimed dividends on the economic development of Nigeria to include, but not limited to, adverse investors’ confidence, decrease in the availability of long-term capital for economic development and the likely volatility in the regulation of the capital market,” he noted.
To this end, the House mandated the Committee on Capital Market and Institutions to investigate the rising value of unclaimed dividends and unremitted withholding tax on dividend and their attendant effects on the nation’s economy and report back within six weeks for further legislative action.