Chinese national digital currency has been used to facilitate transactions in the country’s futures market for the first time, the China Securities Journal reported on Monday.

The commodities exchange in Dalian utilized the digital yuan for the payment of storage fees with help from major banks.

Dalian and two major banks took part in the trial to kick off the new phase of digital currency usage.

For the first time, China is using the digital yuan payments in the domestic futures market after having conducted successful trials in other areas of currency usage.

The central bank digital currency (CBDC) has been used by the Dalian Commodity Exchange (DCE) for the payment of storage fees to a delivery warehouse. The local branches of Bank of Communications and Bank of China supported the transaction according to the report.

The application of e-CNY in the futures market provided an efficient, zero-cost and safe payment alternative for futures exchanges and market participants through real-time inter-bank payment.

A digital yuan payment has no transaction fees and “is not restricted to the operation period of the high-value payment system,” noted Jiang Bin, manager of the delivery warehouse. In addition to these features, the digital yuan would also bring convenience to Chinese enterprises by showing real-time transaction progress.

The DCE further emphasized it will continue to promote business innovation in the region. The commodities exchange plans to expand the use of the digital yuan while at the same time “ensuring a safe and stable operation in the market.”

In the past couple of years, China has been actively testing the digital currency issued by the People’s Bank of China. The government has launched multiple e-CNY pilots across the country with the digital yuan finding applications in over 1.32 million scenarios as of June 30. These range from utility payments, shopping, and catering to transportation and government services. Dalian joined the trials in November 2020.

Authorities in five other major cities – Shenzhen, Suzhou, Beijing, Chengdu, and Shanghai – have dispersed around $35 million of digital yuan in red envelope campaigns, a report by the Tuoluo Research Institute revealed in July. That’s from a total of over $41 million in e-CNY distributed among Chinese citizens nationwide.

Using the e-yuan in the futures shows how close China is to fully launching the digital currency, which has been touted as a government-backed alternative to cryptocurrencies that Beijing has cracked down on since earlier this year.

It is not yet clear how many other areas the government plans to conduct trials before launching the e-yuan, but China has shown unwavering determination to roll out the digital currency as soon as possible. In February, the south Asian giant teamed up with Hong Kong, Thailand, UAE and the Bank of International Settlements (BIS) to explore cross-border payments for digital currencies.

The aim of the move is to internationalize the e-yuan, creating a new path to promote its use in global payments, and possibly challenging the US dollar’s position as the world’s dominant reserve currency.

Although the US, UK and Japan have been rattled by China’s move and are working to create their own digital currencies, they are slow-paced and have recorded little or no success compared to e-yuan. With a wave of international interest in e-yuan-facilitated cross-border payments, the success of its trials in China increases its chances of being the world’s dominant digital currency.

The tax rift between the Federal Inland Revenue Service (FIRS) and Multichoice Nigeria Limited took a new turn on Wednesday following a court ruling ordering the TV company to pay N900 billion to the tax agency, which is 50% of the backlog of what it allegedly owes in taxes.

The FIRS had accused Multichoice of owing up to N1.8 trillion in taxes after the tax body said it conducted a forensic audit which revealed that the company had failed to fully fulfill its civic responsibility in the assessed years. NAN reports that five-member Tax Appeal Tribunal (TAT) sitting in Lagos issued the order following an application to it by the counsel to FIRS. TAT led by its Chairman, A.B. Ahmed, issued the order following the application.

The FIRS Counsel made the application under Order XI of the TAT Procedure Rules 2010 which enables a party to make an application at any stage of the proceedings.

Counsel for FIRS drew the attention of the Tribunal to Paragraph 15(7) of the Fifth Schedule to the Federal Inland Revenue Service (Establishment) Act 2007 and urge the tribunal to direct Multichoice to deposit with the FIRS 50 per cent of the amount of the assessment under appeal as security. It is a requirement for any taxpayer who disputes their tax assessments, to make the statutory deposit required under Paragraph 15(7) of the Fifth Schedule to the Federal Inland Revenue Service (Establishment) Act 2007 (FIRS Act).

Director, Communications and Liaison Department, FIRS, Dr. Abdullahi Ismaila Ahmad issued a statement on Wednesday after the court’s decision. He said these relevant laws are conditions that must be fulfilled before the prosecution of the appeal brought before TAT.

“In certain defined circumstances to which the Multichoice appeal fits, paragraph 15(7) of the fifth schedule to the FIRS (Establishment) Act 2007 requires persons or companies seeking to contest a tax assessment to pay all or a stipulated percentage of the tax assessed before they can be allowed to argue their appeal contesting the assessment at TAT.

“Multichoice Nigeria Limited filed the matter at the Lagos TAT following its dispute over FIRS’ issuance of Notices of Assessment and Demand Note in the sum of N1,822,923,909,313.94k on 7 April 2021.

“The amount constitutes what the FIRS calculated as due in taxation to the Federal Government of Nigeria from Multichoice after an investigation over several months to determine the extent to which Multichoice has been evading taxes in Nigeria,” he explained.

Multichoice had filed the matter at the Lagos TAT following its dispute over FIRS’ issuance of Notices of Assessment and Demand Note in the sum of N1.82 trillion on 7 April 7, 2021.

The amount constitutes what the FIRS calculated as due in taxation to the federal government from the company after an investigation over several months to determine the extent to which Multichoice had been evading taxes in Nigeria.

Mr Ahmad noted that at Tuesday’s hearing of the matter in Appeal, Multichoice Nigeria Limited amended its Notice of Appeal and thereafter sought through its Counsel, Bidemi Olumide of AO2 Law Firm, for an adjournment of the proceedings to enable it to respond to the FIRS’ formal application for accelerated hearing of the appeal.

“In response, the FIRS Counsel asked TAT to issue an order requiring that Multichoice makes the statutory deposit of 50 per cent of the disputed sum.

“The counsel also prayed TAT to direct Multichoice to produce before the Tribunal the integrated Annual Report and Management Account Statements of Multichoice Group Ltd for Tax Years 2012 to 2020, among other prayers,” he explained.

After hearing arguments from both sides, TAT upheld the FIRS submission and directed Multichoice to deposit with the FIRS an amount equal to 50 percent of the Assessment under the Appeal plus a sum equal to 10 percent of the said deposit as a condition precedent for further hearing of the appeal.

The appeal was adjourned to September 23, 2021 for report of compliance with its order and continuation of the hearing, subject to compliance with the tribunal’s order.

The legal tussle is one of the biggest tax cases Nigeria has ever recorded, and it shows how serious the government is taking tax evasion especially by multinationals. In the face of dwindling oil revenue, the Nigerian government has seen taxation as alternate means of revenue generation and has upped its assessment pattern. Multichoice, which has other cases such as the push for it to implement a pay-per-view pricing model, to settle with the government, will face existential crisis in Nigeria if it loses this case.