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.
Oniftv 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.”
