Tuesday, March 16, 2021 11:40
AM / by Deloitte / Header Image Credit: https://naseni.org/
Federal Government of Nigeria (FGN) recently directed the Minister of Finance,
Budget and National Planning (MoF) and Federal Inland Revenue Service (FIRS) to
collect and subsequently remit statutory levy due to the National Agency for
Science and Engineering Infrastructure (NASENI or the Agency).
Agency was established by the NASENI Act, Cap N3 LFN 2004 (the Act) enacted in
1992. The Act also created the NASENI Fund (the Fund) to be managed by the
Agency. The Agency was established to perform the following duties:
the National Science and Technology Policy
and operate science & engineering infrastructure development complexes and
strategies for the generation of private-sector science and engineering capital
facilities and capabilities, through the Agency's subsidiary institutions,
universities and polytechnics for research and development.
national scientific bodies and provide national focal points for international
- Carry out
such other activities as are necessary or expedient for the performance of the
Agency's functions under the Act.
seeks to levy commercial companies and firms to complement the FGN in funding
NASENI. While the FGN is to contribute 3% of the total revenue accruing to the Federation
Account into the Fund, commercial companies and firms with income or turnover
of N4million and above are required
to contribute 0.25% of turnover (the Levy), into the Fund. The Fund will also
consist of grants, donations and fees charged by the Agency for its services.
Sections 20(2)(b) of the Act, the Levy is to be collected by the FIRS or by any
other suitable means as may be specified by the Agency and credited to the
account of the Agency. Also, contributions to the NASENI Fund are tax-deductible
in line with Section 22 of the Act.
enactment in 1992, the funding provisions of the NASENI Act have not been fully
implemented, especially with respect to the levy on commercial companies and
firms with income or turnover of N4million and above. However, the recent presidential directive to the
MoF and FIRS may trigger the enforcement of the erstwhile dormant provisions of
that the FGN through NASENI and FIRS will release appropriate guidelines and regulations
to clarify certain ambiguities in the Act, such as:
of "turnover" for NASENI levy purposes - the Act is silent on what constitutes
"turnover" for the purpose of the levy. In the absence of subsequent guidelines
from NASENI, the definition of turnover is anticipated to be in line with
the relevant International Financial Reporting Standards
of "firms" for NASENI levy purposes - does this include partnership businesses
and individuals with business names?
- The due
date for payment of the NASENI levy
penalties for non-compliance with the provisions of the Act
threshold for the levy on commercial companies and firms. The threshold was
recently increased by the NASENI Governing Board to N100 million. However, the Act does not empower the
Governing Board to vary the threshold.
Act intends to stimulate the nexus between science and technology and the
economic and industrial transformation, it does appear that the timing of
implementation of the NASENI levy was prioritized over the following possible
pressure on earnings of companies doing business in Nigeria, despite the
combined effects of the COVID-19 disruptions and recent economic recession.
increase in overall time and cost of tax compliance in Nigeria.
impact on the ease of doing business and investors' confidence in the country.
continue to monitor this space and provide updates as they become available.
Meanwhile, affected taxpayers are encouraged to arrange their affairs and
financial projections in preparation for immediate compliance with the
provisions of the Act.
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