Society Gazette Society Gazette News
Related Articles
Presidency has debunked reports that there are provisions in the Finance Bill 2022 now before the National Assembly forcing Nigerians to have a Tax Identification Number (TIN) in order to operate a bank account.
Recall that the Leader of the Senate, Yahaya Abdullahi, had last week Wednesday in his lead debate on the bill, sent to the National Assembly by President General Muhammadu Buhari, had said the Finance Bill 2021 has made it mandatory for commercial banks to demand the TIN from anyone who wishes to open an account with them.
Bill, he said also empowers banks to demand TIN from existing customers if they wish to continue to operate their accounts.
But a Presidency source who pleaded for anonymity, claimed to be involved in the drafting of the bill said the news reports are “totally inaccurate, the bill has no such provisions for individuals.”
The source presenter the main changes proposed under the bill which would be further defended this week at both the Senate and the House of Representatives:
“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.”
Source: Sun Nigeria
