Tax & Business Matters - Nigeria

Attend PwC's Tax Academy session on the new Finance Act - practical implications

Benjamin Franklin must have anticipated situations such as the new Nigeria’s Finance Act when he said “An investment in knowledge pays the best interest”. From questions regarding commencement of the Act to transition issues and readiness, getting the implementation wrong could be costly.

Join us for our January Tax Academy as we provide an in-depth analysis of the Finance Act, the practical issues and implementation challenges to help you optimize your tax position under the new law.

Below is our Business School calendar of training programs for 2020. Register in advance for our subsequent monthly Tax Academy sessions and:

• Data & Analytics Academy
• Digital Risk and Cybersecurity Academy
• Finance Academy
• HR Academy
• IFRS Academy
• Internal Audit Academy
• Procurement Bootcamp

PwC Business School - 2020 Calendar

President Muhammadu Buhari has signed the 2019 Finance Bill into Law

President of the Federal Republic of Nigeria, Muhammadu Buhari, has signed the Nigerian Tax and Fiscal Law (Amendment) Bill 2019 otherwise known as the Finance Bill into law. The new law contains over 90 changes to 7 different tax laws including:

1. an increase in the rate of VAT from 5% to 7.5%
2. 0% CIT rate for small businesses and a lower rate of 20% for medium-sized companies
3. requirement for TIN to open and operate a business bank account
4. increase in the threshold of online transfers liable to stamp duty of N50 from N1,000 to N10,000
5. taxation of foreign entities involved in digital transactions with significant economic presence in Nigeria.

Effective date: It was intended that the Bill would be signed into law in December 2019 and take effect from 1 January 2020. However, there was a delay due to the need for harmonization of changes introduced by the Legislature and a further vetting process by the Executive. Technically the law takes effect from today unless a future date is stated when the law is published in the gazette. We however expect that the effective date will be in the near future (February 2020 or later) to enable smooth implementation by both the tax authorities and taxpayers.

The Finance Bill (now an Act) cannot be implemented based on speculations regarding its content and effective date. Therefore changes will not take effect until the new law has been published in the gazette or otherwise officially made public.

Read further details about the new law in our other publications below:

Highlight of the key changes

Analysis of impact on various sectors

How Nigeria's Common Reporting Standard Regulations will affect banks, insurance companies, asset managers and other financial institutions

Common Reporting Standard (CRS) is a set of rules for automatic exchange of financial account information between the tax authorities of countries that have opted to make such exchanges. To opt in, a country must first sign the Multilateral Competent Authority Agreement for the Automatic Exchange of Financial Account Information (“the MCAA”). The MCAA is an international framework agreement which operationalises information exchange relations already entered into by its signatories. Such relations may exist under bilateral treaties (such as double tax treaties) or multilateral treaties (such as the Convention on Mutual Administrative Assistance in Tax Matters).

Will Nigerian financial institutions be affected?

Broadly speaking, financial institutions such as banks, insurance companies, asset/portfolio managers, and investment funds/trusts could have reporting obligations under the CRS based on the following questions:

1. is the institution an entity?
2. is the institution in Nigeria?
3. is it a financial institution?
4. is it a Non-Reporting Financial Institution?

Read details in this article Download How Nigeria CRS will affect banks etc 

Transfer Pricing and the Trojan Horse in the 2019 Finance Bill

The amendments to section 27 will come as good news to many taxpayers. It will however be bad news or a mixed bag for some others. For now, the main casualties are taxpayers whose businesses are driven by the exploitation of IP and who must make payments to related parties for the rights to use the IP.

Read this article by Seun Adu, Partner and Transfer Pricing Leader at PwC Nigeria for insights into the subject matters.

Finance Bill Transfer Pricing Trojan Horse

Agenda for the new FIRS Leadership: Priorities and key areas of focus for a lasting impact

As the Chief Revenue Officer of the Federation and the face of the Nigerian Tax System to the outside world, the Chairman of the FIRS and by extension the Board must focus on strategic tax administration of which tax collection is only a component.

Read my article on Nigeria’s tax administration scorecard, the tax administration we want and what we need to do to get there.

Download Agenda for FIRS Leadership_Jan2020

Highlights of the major tax events that shaped 2019 and what to expect in 2020

Each time you blinked in 2019, something happened in the tax space, some positive, some not so positive while others were completely outrageous. The Finance Bill which introduces sweeping changes to different tax laws will have the biggest impact on the Nigerian tax environment in 2020 with MSMEs as the biggest winners.

Read my article below for the 2019 Tax Recap and 2020 Outlook.

2019 Tax Review & 2020 expectations