Tax & Business Matters - Nigeria

Nigeria reviews its national tax policy

A sound and dynamic tax system is a critical factor for economic development including job creation, social welfare, better standard of living. At the heart of this is the need for a clear and robust tax policy framework which must be properly implemented.

Nigeria's current National Tax Policy was approved in 2010 but has barely been implemented if at all. To address this, the Minister of Finance recently set up a committee to review Nigeria's National Tax Policy and make recommendations for effective implementation. Areas of focus include key policy considerations regarding the following:

1. Review of the National Tax Policy document;
2. Enactment and amendment of the tax laws;
3. Effective implementation of the National Tax Policy;
4. Ensuring inter-agencies cooperation between revenue agencies toward enhancing the revenue of the Federation;
5. Review and expansion of Nigeria treaty network and Double Taxation Agreement regime;
6. Regular review of tax policy, legislation and administration; and
7. Any other issue.

Below is a copy of the invitation for input from all stakeholders for your action. I have also attached a copy of the existing tax policy for your reference.

Join the conversation, participate and contribute. Together we can make Nigeria great!

Download National Tax Policy Review_Call for Memoranda_August 2016

Download NATIONAL TAX POLICY

Compliance with immigration rules: no longer business as usual

The Nigeria Immigration Service (NIS) recently deported some expatriates for abuse of work permits.

In a bid to ensure compliance with Nigeria immigration laws, the NIS has renewed its focus on the activities of companies that employ expatriates in the country. In practice, expatriate staff or their employers may be in violation of immigration rules in many ways. Read our tax alert below for insights on the common pitfalls and how to avoid them.

Download PwC Alert_Immigration compliance and enforcement_August 2016

FIRS demands full compliance with all taxes as a precondition for tax clearance certificate

The Federal Inland Revenue Service (FIRS) recently issued a public notice on what taxpayers need to know with respect to applications for tax clearance certificate (TCC).The Notice states that the FIRS is obligated to issue TCC to qualifying taxpayers not later than two weeks from the date of application.

In practice, taxpayers encounter significant delays in obtaining TCC from the FIRS. The public notice reinforces the 2-week timeframe for the issuance of a TCC as contained in the relevant law. However the law does not require a taxpayer to prove full compliance with other taxes such as VAT and Withholding Tax to be eligible for a TCC. The requirement is limited to Companies Income Tax. 

Read more here and download a copy of the FIRS Notice:

Download PwC Tax Alert_FIRS public notice on TCC application

Download FIRS Public Notice on TCC

Ministry of Trade and Investment insists that companies must obtain approval for their assets

In practice, FIRS may disallow capital allowances claimed on fixed assets if the appropriate Certificate of Acceptance for Fixed Assets "CAFA" has not been obtained from the Industrial Inspectorate Department.

In addition, the Financial Reporting Council of Nigeria (FRCN) recently published rules which prohibit the recognition of transactions in the financial statements of a company if such transactions require regulatory approvals that have not been obtained. CAFA falls into this category of transactions and potentially means that a company may not be able to recognise its non-current assets in the financial statements unless CAFA has been granted for the relevant financial periods.

Although it is difficult to see any useful purpose being served by this regulatory approval, it is nonetheless important for companies to comply in order to avoid potential tax exposures and sanctions by the FRCN.

Read our tax alert for more: Download PwC Tax Alert_Acceptance Certificate for Assets_Aug 2016

Copies of letter from Ministry of Trade and FRCN Rules for reference:

Download Sample letter from IID on CAFA compliance

Download FRCN rules