The House of Representatives has called for investigation into the N126.03 billion unclaimed dividends, withheld tax and their effects on the country’s economy. The call came after adoption of a motion brought on the floor of the house on Wednesday by Babangida Ibrahim (APC, Katsina).
Presenting the motion, the lawmaker said there was need to investigate the rising value of unclaimed dividends, unremitted Withholding Tax on the dividends and their effects on Nigeria’s economy.
Ibrahim noted that the continued increase of unclaimed dividends over the years and the unremitted withholding tax on dividends is having a negative effect on the economy.
According to him, the value of unclaimed dividends in 1999 was just N2.09 billion, but the value increased from N5.1 billion to N103.1 billion between 2002 and November 2016. He further disclosed that almost three years after the 8th House of Representatives intervention, the value of unclaimed dividends as at March 2019 stood at N126.03 billion.
“The mechanisms put in place to address the issue of rising value of unclaimed dividends such as adoption of electronic dividend payment method, dematerialization 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,” he said. He argued that the large value of unclaimed dividends was having a devastating effect on the economic development of Nigeria. He said the development eroded investors’ confidence, decreased availability of long-term capital for economic development and the likely volatility in the regulation of the capital market. He therefore noted that measures should be taken to address the issue in order to build confidence in Nigeria’s economy to attract foreign direct investment. The House, after deliberations and contributions from members, mandated its Committee on Capital Market and Institutions to investigate the issues and their attendant effects on the nation’s economy and report back within six weeks for further legislative action.