The Presidency has disclosed that the Finance Bill 2022 has
not mandated Nigerians to have a Tax Identification Number, TIN, before
operating a bank account in the country.
The Finance Bill 2022 is currently before the Senate and
House of Representatives.
But, some reports erroneously citing the bill said banks are
mandated to ask for customers TIN before opening accounts.
The reports also claimed that existing customers would be
required to submit their TIN to allow them continue operating their accounts.
However, a top source from the Presidency described the
reports as inaccurate because the bill has no such provisions.
NigerianEye learnt from the source who was involved in the
drafting of the bill some of the proposed change under the bill.
The source listed the changes which would be further
defended at the National Assembly this week.
According to the source: “Capital gains tax at the rate of
5% to be applicable on disposal of shares in a Nigerian company worth N500m or
more in any 12 consecutive months except where the proceed is reinvested in the
shares of any Nigerian company within the same year of assessment. Partial
re-investment will attract tax proportionately. Transfer of shares under the
regulated Security Lending Transaction is exempted.
“Lottery and Gaming business to be specifically taxable
under CITA including betting, game of chance, promotional competition,
gambling, wagering, video poker, roulette, craps, bingo, slot or gaming
machines and the likes.
“Companies engaged in petroleum operations including
Midstream and Downstream operations will not be eligible for exemption on
profits in respect of goods exported from Nigeria. Downstream companies were
previously eligible under the old Upstream and Downstream classification.
“FIRS to be empowered to assess CIT on the turnover of a
foreign digital company involved in transmitting, emitting, or receiving
signals, sounds, messages, images or data of any kind including e-commerce, app
stores, and online adverts.
“Capital allowance claimable on an asset is limited to the
portion used for generating taxable profits. Assets partially used to generate
taxable income will be eligible for pro-rata capital allowance except where the
proportion of non-taxable income does not exceed 20% of the total income of the
company.
“Any capital allowance or unabsorbed allowances brought
forward by a small or medium company, other than a company under pioneer
status, to be treated as having been claimed and consumed in each such year of
assessment.
“The reduction of minimum tax rate from 0.5% to 0.25% of
turnover (less franked investment income) is to be applicable to any two
accounting periods between 1 Jan 2019 and 31 Dec 2021 as may be chosen by the
taxpayer.
“Disputed tax assessment to be in abeyance until
determination while undisputed tax assessment is to be paid within 30 days
after service of the notice of assessment on the company except otherwise
extended by the FIRS. Reference to provisional tax has been deleted in recognition
of the well-established self-assessment tax regime.
“Withholding tax on interest earned from a unit trust to be
treated as final tax. Only WHT on dividend is currently treated as final tax
for local companies.
“The deployment of technology to automate tax administration
including assessment and information gathering by FIRS to now include third
party technology (previously only proprietary technology may be deployed). A
penalty of N50,000 to be applicable where a company fails to grant access to FIRS
in addition to N25,000 for each day the failure continues.
“FIRS to be the primary agency of the Federal Government
responsible for the administration, assessment, collection, accounting and
enforcement of taxes and levies due to the Federation, the Federal Government
and any of its agencies except otherwise authorized by the Finance Minister.
“Any person or agency of the Federal Government must refer
matters requiring tax investigation, enforcement and compliance to the FIRS.
Relevant officers who violate the rule to be liable to a penalty of N10m and/or
5 years imprisonment on conviction.
“Deductible life assurance premium for personal income tax
purposes to exclude a contract for deferred annuity.
“The Finance Minister, subject to the approval of the
National Assembly, shall make regulations for the imposition, administration,
collection, remittance, including distribution of arrears of stamp duty and
Electronic Money Transfer levies collected between 2015 and 2019 fiscal years.
“Tertiary Education Tax to be payable within 30 days of
service of assessment (currently 60 days).
“Non-residents making taxable supplies to recipients in
Nigeria to have the primary obligation to charge, collect and remit VAT to
FIRS. The VAT withholding obligation of Nigerian recipients now limited to
where the non-resident or its appointed agent fails to collect the VAT.
“The exemption from VAT registration and compliance
obligation applicable to small companies with annual turnover less than N25m to
exclude companies engaged in upstream petroleum operations regardless of
turnover.
“Appointment of the FIRS to assess, collect and enforce the
payment of Nigerian Police Trust Fund levy. The Act enacted in 2019 imposed a
tax of 0.005% on the net profit of companies operating in Nigeria.
“Amendment of the National Agency for Science and
Engineering Infrastructure Act to remove the requirement for commercial
companies to pay a levy of 0.25% of turnover annually to the Fund. Primary
sources of fund to be limited to 1% of the Federation Account.
“Mandatory payment of gross revenue collected by federal
ministries, departments or agencies to the federation account or consolidated
revenue fund as the case may be except otherwise authorized by law. Any officer
who violates this requirement may be liable on conviction to imprisonment of up
to 5 years or a fine of N5m or both.
“Amendment of the Fiscal Responsibility Act to enable
government borrow for “critical reforms of significant national impact”.
Currently, government at all tiers are only empowered to borrow for capital
expenditure and human development. Capital expenditure is defined as spending
on an asset that lasts for more than one financial year. Human development and
critical reforms are not defined.”
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