Tax & Business Matters - Nigeria

Lagos State issues regulations to enforce Electronic Fiscal Devices for Consumption Tax

The Lagos State Internal Revenue Service (LIRS) has issued the Hotel Occupancy and Restaurant Consumption (Fiscalisation) Regulations 2017 pursuant to section 9 of the Hotel Occupancy and Restaurant Consumption Law empowering LIRS, to issue Regulations for the administration of the Law.

On 10 January 2018, the Regulations were gazetted. The main objective is to enable LIRS efficiently monitor transactions covered under the Law through the use of Electronic Fiscal Device (EFD). Failure to comply with any of the provisions of the regulation may lead to, upon conviction, penalty of 10% of the tax due and interest at 5% above the Minimum Rediscount Rate.

Read more here:

Download PwC Tax Alert_Lagos Consumption Tax (Fiscalisation) Regulation_Feb2018

Download Hotel Occupancy and Restaurant Consumption (Fiscalisation) Regulation 2017

Federal Competition and Consumer Protection Bill

The National Assembly recently passed the Federal Competition and Consumer Protection Bill which is aimed at promoting a competitive market and protecting consumer rights.

The Bill applies to all businesses and all commercial activities within, or having effect within Nigeria and extends to undertakings in which the Federal, State or Local Government or any of their agencies have a controlling stake. The Bill prescribes very stringent fines for non-compliance.

A general fine imposed by this Bill for offences committed by companies is an amount up to 10% of the company’s annual turnover in the preceding business year. There are also indications that the updated version of the Bill imposes a tax of 0.5% of after-tax profits on all companies in Nigeria payable to the Competition Commission.

Read our alert for details:

Download PwC Regulatory Alert_Competition Bill_Feb 2018

 

What you need to know about the UK’s Unexplained Wealth Order (UWO)

If you own assets worth 50,000 Pounds (about N25 million) or more, and it does not appear that your legitimate source of income can support such wealth, then you may be asked to explain the source of your wealth failing which you risk forfieture.

The UWO is an Order granted by a UK High Court judge upon an application by a UK enforcement agency requiring a person (respondent) to explain the nature of its interest in property (real estate and other assets), how it obtained the property, details of any trust or settlement where the property is so held and any other information as required by the court.

Read our alert below for more details:

Download PwC Tax Alert_Unexplained Wealth Order_Feb2018

Presidential Order seeks to enforce local content in procurement and employment

President Mohammed Buhari recently signed an Executive Order titled Planning and Execution of Projects, Promotion of Nigerian Content in Contracts and Science, Engineering and Technology. The Order directs Ministries, Departments and Agencies (MDAs) to promote local content by giving preference to Nigerian companies (defined as companies formed and registered in Nigeria with no less than 51% equity shares owned by Nigerians) in the award of contracts, bids and projects.

The Order is effective from 2 February 2018.

Read details here:

Download Regulatory Alert_Executive Order on Local Content and Foreign Employment_Feb2018

Ministry of Finance Issues Addendum to Modify the 2017 Revised Import Guidelines

The Federal Ministry of Finance recently issued an addendum to the 2017 Revised Import Guidelines, Procedures and Documentation Requirements under the Destination Inspection Scheme to clarify certain provisions of the Guidelines and improve ease of cross-border trade.

Read our alert for details:

Download Tax Alert_Addendum to 2017 Revised Import Guidelines

Download AddendumTo2017RevisedImportGuidelines

Senate rejects Bill to raise taxes for road maintenance and rehabilitation

The Senate has rejected the report of its committee on the National Roads Fund (Establishment, etc) Bill 2017. The Bill is aimed at finding a sustainable means to finance the maintenance and rehabilitation of national roads.

If enacted, the Bill will impose an inter-state mass transit-user charge of 0.5% deductible from the fare paid by passengers to commercial mass transit operators on inter-state roads. It will also introduce a N5 fuel levy chargeable per litre on any volume of petrol and diesel products imported into Nigeria and on locally-refined petroleum products in addition to revenue generated from toll fee on any federal road designated as toll road.

The Committee has been directed to carry out further work on the Bill.

Lagos State has enacted a new Land Use Charge Law

On 28 January 2018, the Lagos State House of Assembly passed the Land Use Charge Law 2018 to repeal and replace the Land Use Charge Law 2001.

Some of the changes introduced include:

1. determination of land use charge to be based on market or commercial value
2. private cementaries are no longer exempted from land use charge
3. the exemption for property owned by religious bodies has been limited to those used as a place of worship or for religious education. Those used for commercial letting will be taxed in proportion to such usage.
4. persons liable to pay the charge have been extended to include occupiers holding long leases of 10 years and above. This means tenants will be liable to pay the tax (whether occupying the property legally or illegally)

Read the new law and our alert below for details.

Download Tax Alert_New Lagos Land Use Charge Law 2018

Download 2018 Land Use Charge Law (Lagos State)

Old Law - Download L79_Land-Use-Charge-Law

 

Nigeria ratifies tax treaty with Spain

On 26 January 2018, the Nigerian government announced the ratification of the Nigeria-Spain avoidance of double taxation agreement (DTA).

The DTA was initially negotiated in June 2009 and presented to the National Assembly for ratification in 2016, alongside DTAs with Sweden and South Korea. Ratification involves the passage of a treaty by the National Assembly so that it forms part of the country’s domestic law.

The takeaway

Although Nigeria’s DTAs with Qatar, South Korea, Sweden, Singapore and UAE – which were all listed for amendment in Nigeria’s position at the time of signing the MLI – are yet to be ratified, the announcement of the Nigeria-Spain DTA expands Nigeria’s treaty network to 13.

Some of the potential changes to the Nigeria-Spain DTA (based on Nigeria’s MLI position) include amendments to the definition of PE to prevent abuse through commissionaire arrangements, qualify existing PE exemptions (specific activity exemption), and introduction of a principal purpose test to prevent treaty shopping etc.

Read our alert for details.

Download PwC Tax Alert_Nigeria ratifies DTA with Spain_Jan2018