Friday, November 08, 2019
/03:28 PM / By Taiwo Oyedele* Tax Partner, PwC Nigeria/ Header Image
Credit: PwC
A Bill to amend various tax laws in Nigeria is
currently undergoing legislative process at the National Assembly. The 2019
Finance Bill which was presented to the Legislature by President Muhammadu
Buhari along with the 2019 Budget seeks to introduce sweeping changes.

Below are some of the important changes you should
know about:
- Excess dividend tax to apply
only to untaxed distributions other than profits specifically exempted
from tax and franked investment income
- Small businesses with turnover
less than N25m to be exempted from Companies Income Tax
- A lower CIT rate of 20% to
apply to medium-sized companies with turnover between N25m and N100m
- Commencement and cessation
rules modified to eliminate overlaps and gaps to avoid double taxation and
complication during commencement
- Minimum tax provisions amended
to 0.5% of turnover and exemption only applies to small companies (less
than 25m turnover), so non-resident companies will now pay minimum tax
- Insurance companies can now
carry forward tax losses indefinitely, deduct reserve for unexpired risks
on time apportionment bases while special minimum tax for insurance has
been abolished
- Bonus of 2% of tax payable
(medium-sized companies) and 1% for large companies for early payment of
CIT
- Introduction of thin
capitalisation of 30% of EBITDA for interest deductibility. Any excess
deduction can be carried forward for 5 years
- Deemed tax presence for
non-residents with respect to imported technical and management services
now taxable at a final WHT rate of 10%
- Any expense incurred to earn
exempt income now specifically disallowed as a deduction against other
taxable income
- Dividend distributed from
petroleum profits now to suffer 10% withholding tax
- Banks to request for Tax
Identification Number (TIN) before opening bank accounts for individuals,
while existing account holders must provide their TIN to continue
operating their accounts
- Email correspondences to be
recognised for communicating with tax authorities
- The meaning of supply and
definition of goods and services has been expanded to cover intangible
items other than land, among others
- Specific requirement for VAT
deregistration for discontinuing operations
- Introduction of VAT reverse
charge on imported services
- VAT registration threshold of
N25 million turnover in a calendar year to be introduced
- Remittance of VAT now to be on
cash basis, that is, difference between output VAT collected and input VAT
paid in the preceding month
- Compensation for loss of
employment below N10m to be exempted from CGT
- Stamp duty on bank transfer to
apply only on amount from N10,000 and above. Transfers between the same
owner's accounts in the same bank also to be exempted
Download Here - 2019
Finance Bill

About The Author
Taiwo Oyedele is the Head of
Tax and Corporate Advisory Services at PwC Nigeria. He has been in the
forefront as a thought leader and prominent speaker on key accounting and tax
issues including the tax implications of IFRS Adoption and Transfer Pricing. Taiwo
writes articles in leading national newspapers, professional journals,
international magazines and newsletters. He is a regular presenter and a highly
sought after public speaker delivering over 200 speeches and presentations
around the world in the past 3 years alone. Taiwo is the Head of PwC Tax
Academy, Dean of the Direct Taxation Faculty of the Chartered Institute of
Taxation of Nigeria, member of the Nigerian Taxation Standards Board and a
member of the Taxation and Fiscal Policy Management Faculty Board of ICAN. He
can be reached via @taiwoyedele

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