Regulatory Compliance Crucial for CSOs’ long-term Survival, Says Global Rights
Ndifreke Enefiok, Uyo.
Global Rights has stressed that Civil Society and Non-governmental Organizations establishing regulatory compliance structure is crucial for their long-term survival.
Global Rights, an International Organization made the call on Monday, June 17, 2024 during a one-day workshop for members of Community of Practice (CoP), in Uyo.
The training, funded by the European Union and themed “Strengthening a Community of Practice to Improve CSO Regulatory Environment in Nigeria,” aimed to equip CSOs with the necessary knowledge and skills to navigate Nigeria’s regulatory environment and ensure compliance with relevant laws.
According to Global Rights’ Program Manager, Edosa Oviawe who spoke on purpose and logic of the meeting, explained that having an established robust regulatory compliance structure in place will help CSOs maintain credibility, avoid legal penalties or fines, and promote a culture of accountability.
Oviawe stressed that compliance is a necessity for CSOs seeking credibility and survival, noting that many organizations neglect compliance after registering with the Corporate Affairs Commission (CAC), thus the need for the training for CSOs.
Oviawe pointed out that non-compliance has led to the closure of several CSOs in Nigeria, with many others facing penalties, legal battles, and many others struggling to stay afloat despite their excellent work.
He said, “We have understood that a lot of them are losing credibility not because they are not doing a good job but because the level of their regulatory compliance to extant regulation is very low. Many of them don’t even know what is required of them after registration.
A lot of them started their work even before formal registration. They just went to the CAC register and left without knowing that the registration comes with some obligations so we are here to train these organisations to understand what is required of them.”
Professor Adekunle Adedeji SAN, facilitating the session on Companies & Allied Matters (CAMA), noted that many CSOs are unaware of the additional state-level laws they must comply with, beyond CAC registration.
Adedeji highlighted key regulatory requirements, including tax law and money laundering law, and stressed the importance of developing whistleblower, conflict of interest, and procurement policies as well as a Compliance Officer in their organizations to ensure timely compliance.
Prof. Adedeji further elucidating other key compliance obligations explained that every company must have a qualified Secretary as prescribed in section 295 of CAMA 2020 and must file annual returns with the CAC, including audited reports and certificates signed by directors and the secretary, within 42 days of the general meeting.
Earlier, Tijah Bolton-Akpan, a member of the National Steering Committee , CoP on Civic Space Strengthening in his remarks called for improved understanding and collaboration between CSOs and regulators.
Bolton-Akpan noted that sometimes the National Assembly and bureaucrats regulating CSOs “speak a different language”, noting that there is need for better knowledge, policies, and analysis to appreciate the role of CSOs.
He however stressed that CSOs are not opposed to regulation, but rather want a regulatory environment with a human face where the services they render can be better appreciated, rather than shrinking it.
“Nobody is saying CSOs don’t want to be regulated, all what we are saying is that the regulatory environment should be such that it facilitates the delivery of that role CSOs play rather than shrink it,” he added.
Godfrey Ekuma, a representative of the CAC, clarified the requirements for incorporating NGOs and other CSOs, noting that the Commission has upgraded its services, making registration and other processes more efficient through its electronic portal.
Ekuma explained that NGOs and CSOs must notify the CAC of any changes to their name, constitution, address, or other relevant information, and file annual returns, including bi-annual financial statements. He warned that failure to comply with these requirements would result in penalties that accrue over time.
Speaking on Non-profit Taxation, Princess Musa, tax expert explained why NGOs must register with tax authorities and file their annual tax returns at the relevant MTO.
Musa clarified that NGOs are however exempted from paying Companies Income Tax (CIT) on the income derived from their approved activities except where the NGO engaged in a profit-generating trade, business, or investment.
On Personal Income Tax (P.A.Y.E), Musa also stated that NGOs must register for P.A.Y.E and pay a 7.5% VAT on goods and services consumed unless exempted by VATA or used in humanitarian projects or donor-funded activities.
She however advised CSOs to maintain thorough records and comply with filing returns between June 1 and 30 to avoid sanctions.
The training had in attendance representatives drawn from different CSOs and NGOs.