Tax & Business Matters - Nigeria

FIRS begins enforcement of Country-by-Country Reporting

The FIRS has begun to enforce compliance with Nigeria's Country-by-Country Reporting (CbCR) Regulations. Members of multinational groups that meet the CbCR threshold have an obligation to notify the FIRS of the identity and tax residence of the member of the group responsible for making the CbCR disclosure on behalf of the group.

 

 

Notification is due before the last day of the group's accounting year-end for which the CbCR relates. For taxpayers with 31 December group reporting date, the first deadline for filing the notification was 31 December 2018. The penalty for failing to file the notification is ₦5 million in the first instance and ₦10,000 for every day of default.  

 

A number of companies have received letters from the FIRS imposing the above penalties for failure to comply with the regulations as required. Taxpayers who are yet to comply are advised to do so immediately to minimise further exposure to the daily penalties.

 

You can read our publications on the CbCR Regulations here. 

Federal Government of Nigeria Introduces New Electronic Yellow Card for Travellers

The World Health Organisation (WHO) recommends that travelers are vaccinated to prevent the transmission of yellow fever (YFV) with specific requirements. According to the International Health Regulations (IHR) 2005, countries may require a proof of vaccination from travelers as a condition for entry. They may also take certain measures if an arriving traveler has no yellow fever certificate (or yellow card).

Following an amendment of the IHR 2005 effective 11 July 2016, the validity of a certificate and protection offered by the vaccination changed from 10 years to the life of the traveler vaccinated. Vaccination is recommended for travelers aged 9 months and older.

The new electronic yellow card will replace the old “yellow card” effective from 1 April 2019.

Read our alert below for other details including the process required to obtain the new card.

Download PwC Regulatory Alert_Nigeria introduces new Yellow Card for travelers_Feb2019

FIRS suspends bank freezing order

We understand that the FIRS today wrote a letter to all banks communicating a temporary suspension of lien on accounts of taxpayers alleged to be in default of tax payments. The suspension is for 30 days with immediate effect.

There are key questions regarding the powers of the FIRS to place a lien on a taxpayer's bank account and the lack of due process in doing so in many cases. We are of the view that the substitution power granted the FIRS under the relevant laws does not support the freezing of bank accounts in the way and manner the power is being exercised by the FIRS.

Read our earlier article on the subject which outlines the extent of FIRS powers, the role of banks, and the remedies available to affected taxpayers.

Let there be roads …

Matters arising from the Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme Order, 2019

According to the Infrastructure Concession Regulatory Commission, Nigeria has about 195,000 km of road network out of which about 32,000 km are federal roads and 31,000 km are state roads. In total, only about 60,000 km are paved leaving 135,000 km of road untarred. A large proportion of the paved roads are in bad conditions due to poor maintenance.

President Muhammadu Buhari on 25 January 2019 signed a 10-page Executive Order No. 007 known as the “Companies Income Tax (Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme) Order, 2019” described as a Public-Private Partnership intervention to enable government leverage private sector funding in a manner that creates value for money through private sector discipline. The Order is accompanied by an 11-page Regulation made up of First Schedule on the Administration and Operation of the Scheme while the Second Schedule contains a sample MoU for eligible road projects.

… if diligently implemented the Scheme can bring huge benefits to all stakeholders. It should prevent budget padding, reduce contract inflation, cut down political patronage and rent-seeking, ensure timely project completion, reduce abandonment of projects and address sub-standard quality of work. It should however be worthwhile for the private sector and not be at excessive cost to the government.

Read my article and our alert below for details. Also download a copy of the Order for ease of reference.

Download Let there be roads…Feb2019

Download PwC Tax Alert_Road Infrastructure Development Scheme_Jan2019

Download Executive Order. No. 007 of 2019