Tax & Business Matters - Nigeria

The Federal Government of Nigeria has issued COVID-19 Regulations, 2020

The Regulations were signed and dated 30^th of March 2020 but did not state a specific commencement date. However, based on the content it can be inferred that the Regulations commenced on the 30^th of March 2020. The President has directed the cessation of movements in Lagos, Ogun and FCT for an initial period of 14 days with effect from 11pm on Monday 30 March 2020.

Citizens are to stay in their homes and all businesses and offices should be fully closed while travel to other states should be postponed. Restriction of movement is not applicable to:

• hospitals and related medical establishments;
• health care related manufacturers and distributors;
• food processing, distribution and retails companies;
• petroleum distribution and retail entities;
• power generation, transmission and distributions companies;
• private security companies;
• urgent court matters as may be directed by the Chief Justice of Nigeria;
• financial system and money markets; and
• workers in telecom companies, broadcasters, print and electronic media staff who can prove they are unable to work from home 

Below are other key measures introduced under the Regulations:

1. Seaport shall remain operational while vehicles conveying essential cargoes from the ports will be screened before departure
2. All passenger aircrafts both commercial and private jets are suspended. Special permits will be issued on a need basis.
3. Government will deploy relief materials to residents of satellite and commuter towns and communities around Lagos and Abuja whose livelihood will be affected by the restrictive measures. Also, the school feeding program will be sustained without compromising social distancing policies
4. A 3-month repayment moratorium will be granted for all TraderMoni, MarketMoni and FarmerMoni loans. In addition, moratorium will be granted for all FG funded loans issued by the Bank of Industry, Bank of Agriculture, and Nigeria Export Import Bank.
5. Unspecified conditional cash transfers and food rations will be provided for the next 2 months to the most vulnerable and internally displaced persons.
6. Nigerians are encouraged to take personal responsibilities to support those who are vulnerable within their communities.
7. All FG stadia, pilgrims’ camps and other facilities will be converted to isolation centers and makeshift hospitals.
8. The Presidential Task Force is to coordinate the COVID-19 response including donations and contributions

Download FG Covid-19 Regulations

Lagos State Infectious Diseases (Emergency Prevention) Regulations 2020

The Lagos State government has issued the "Infectious Diseases (Emergency Prevention) Regulations 2020 effective from 27 March 2020. It ratifies all acts done to curtain Covid-19 prior to the Regulations and empowers the Governor or anyone duly authorized by him to:

1. request self-isolation of adults or a child (person under 18)
2. restrict movements except movements of and for essential supplies of food, water, pharmaceutical products, medical supplies and medicines including movement of essential services personnel
3. restrict gathering of persons including conferences, meetings, festivals, private events, religious services, public visits except with prior written approval by the Governor
4. order the temporary closure of event centers, markets (other than for food, water or stores), bars, places of worship, educational institutions etc
5. impose restrictions on the number of persons that may be present in a place
6. direct security agencies to breakup any gathering and take into custody for the purpose of screening and assessment and if necessary, for isolation
7. restrict trade, business and commercial activities in whole or in part
8. direct that no one shall hoard foods, drugs and other essential items or refuse to provide essential services
9. specify how the remains of infected person shall be transported, stored and disposed of including cremation of the remains
10. prohibit the transmission or dissemination of false information regarding Covid-19
11. prohibit promotion of unverified, untested or unapproved cures, vaccines or other medicinal items
12. order any person to stay at home, deploy law enforcement officers to enforce directives, allocate spaces as isolation centers, etc, and temporarily take possession of property for use as isolation centers, storage of pharmaceutical and medical equipment etc subject to adequate compensation

It shall be an offence to artificially inflate prices of foods, drugs and essential goods and services. In the event of a breach, the Governor may direct the seizure and forfeiture of foods, drugs and other essential items and may be utilised for the purpose of alleviating the supply needs.

Violations liable to fine and/or imprisonment in line with Quarantine Act, Public Health Law or any other existing law.

Download Infectious Diseases Regulations 2020

Download FG Covid-19 Regualtions

Covid-19: FCT IRS extends deadline for filing tax returns by 3 months

The Federal Capital Territory Internal Revenue Service (FCT-IRS) has announced the extension of deadline for the filing of personal income tax returns by 3 months from 31st of March to 30th of June 2020. This is in response to the challenges brought about by the Covid-19 pandemic. 

LIRS extends deadline for filing personal income tax returns by 2 months

The Lagos State Internal Revenue Service (LIRS) has announced the extension of the deadline for filing personal income tax returns by 2 months from 31st of March to 31st of May 2020.

This is in response to the Covid-19 pandemic and restrictions on movement imposed by the Lagos state government to contain the spread of the virus.

The extension is applicable to all individuals including employees and self employed persons.

Nigeria’s Covid-19 Fiscal Policy Measures: A review of government’s interventions and what else to consider!

Conservative estimates suggest that Covid-19 may be with us for at least 3 months while the worst-case scenario could be up to 18 months. Whatever the estimates, one thing is certain, when we finally get rid of coronavirus, the economic impact would linger for perhaps twice as long. Our ability to cope with the attendant challenges will depend on how we respond now to prevent a free fall rather than trying to stop it once it has started.

There have been a number of interventions from various government quarters ranging from the adjustment to the 2020 budget, the stimulus package by the CBN, the downward adjustment of the pump price of petrol, reliefs announced by the FIRS and the “Emergency Economic Stimulus Bill” introduced by the National Assembly.

The measures so far introduced will help to a great extent but not enough. Some of them appear unhelpful or may be at a much greater cost than the attendant benefits. Although most of the interventions are by design short term or temporary in nature, government should nonetheless use this opportunity to make some long-term decisions that are necessary to improve the country’s preparedness to deal with future economic challenges. For instance, government should use this opportunity to fully deregulate the price of petrol.

Nigeria’s economic challenges predate the Covid-19 pandemic. Beyond the humanitarian crisis posed by the virus, the economic impact is just as important. Any policy response being introduced needs to be evidence-based rather than a trial prescription program which could worsen the crisis. Ultimately, the crisis presents another opportunity for reforms which should not be wasted.

Read my article for what else government needs to do and why the response to Covid-19 must be robust and coordinated:

Download Nigeria's Covid19 Fiscal Measures_What works and what doesn't

PwC Nigeria introduces Digital Tax Assistant (TaxTim) for filing tax returns

Tax authorities previously focused only on PAYE tax but are now asking questions regarding other incomes from rental, 'side-hustle', trading or professional activities that individuals need to declare.

The Personal Income Tax Act (PITA) requires every individual to file a return of their income on or before 31st March every year. This applies to all individuals whether self-employed, high net worth individuals under direct assessment or those in paid employment under the PAYE regime. The individual filing obligation is separate from the PAYE tax returns which the employer makes in respect of employment income paid to staff.

The deadline for personal tax returns is 31st March but this has been extended in Lagos by the LIRS for 2 months till 31st of May. We recommend that you file much earlier as the tax authority’s server may not be able to deal with the rush towards the last day. Non-compliance is liable to penalties, you can read about the LIRS intention to penalise late filing here.

TaxTim, a web-based chat bot, can help taxpayers correctly compute their taxes online with the help of a virtual assistant called Tim, so that they can file the correct amount to the tax authorities.

If you require assistance identifying all your income, available incentives and all your deductions, as well as computing what your tax should be on your total income, PwC Nigeria's online tax assistant called 'TaxTim' is here to help.

This is a subscription based, fully automated web application / chat-bot. The logic is developed by tax professionals. Personal data is kept in a secure server with no third-party access. The application helps you prepare your personal tax computations and completes your tax returns.

By answering simple questions that do not require any tax knowledge, Tim will convert your answers into a fully completed tax return, which you can then submit to the relevant Internal Revenue Services. The entire process can be completed within 20 minutes.

For states that offer online filing (like Lagos and Rivers), you would need to upload the pdf of the completed returns on to their platform. For states that have no online platform, you would need to print and submit at their offices.

The solution comes at an important time given the Covid-19 “stay at home order” as the deadline of 31^st March for filing tax returns under section 44 of the Personal Income Tax Act (PITA) approaches.

If you want to use TaxTim, sign-up here: https://pwc.taxtim.com/ng/

Nigerian lawmakers propose “Emergency Economic Stimulus Bill 2020” to fight Covid-19

Nigeria’s House of Representatives has proposed a Bill for an Act to provide for tax relief, suspension of import duty on selected medical goods and deferral of residential mortgage obligations. The measures are expected to protect jobs and alleviate the financial burden on citizens in response to the economic downturn occasioned by the outbreak of COVID-19 disease.

The main objectives of the Bill are:

1. To provide temporary relief to companies and individuals and alleviate the adverse financial consequences of a slowdown in economic activities as a result of Covid-19
2. To protect the employment status of Nigerians who might otherwise become unemployed
3. Provide a moratorium on mortgage obligations for individuals
4. Eliminate additional fiscal bottleneck on the importation of medical equipment, medicines, personal protection equipment etc
5. Cater to the general wellbeing of Nigerians pending the eradication of the pandemic and a return to economic stability

Fiscal stimulus provided under the Bill:

1. Job protection - any employer duly registered under the Companies and Allied Matters Act Cap C20 LFN 2004 which maintains the same employees status without retrenching their staff as at 1^st of March 2020 till the 31^st of December 2020 shall be entitled to 50% income tax rebate on the total amount due or paid as PAYE under the Personal Income Tax Act Cap C8 LFN 2004 as amended (it is unclear whether this will be a refund of PAYE tax paid by the state or a corporate income tax refund by FIRS using PAYE as the basis). Reduction in number of employees due to death arising from natural causes, voluntary disengagement, or disengagement by virtue of a breach of the Labour Act Cap L1 LFN 2004 are exempted. Also, companies that are partly or wholly under the Petroleum Profit Tax Act are not eligible for this relief. The period may be extended by the President if the COVID-19 disease persists subject to ratification by a majority of the members of the National Assembly.
2. Deferral of mortgage payment - This relief applies to mortgage payments under the National Housing Fund. The Bill provides that all payments of mortgage obligations on residential mortgages obtained by individual contributors to the National Housing Fund will be deferred for a period of 180 days effective from 1^st of March 2020. This may be extended by the President for a further period not exceeding 180 days subject to a majority vote by members of the National Assembly.
3. Import duty waiver - Effective from 1^st of March 2020 to 31^st of December 2020, the Act will grant waiver of import duty on medical equipment, medicines, personal protection equipment and other medical necessities required for the treatment and management of Covid-19 disease in Nigeria. The import duty waiver period may be further extended by the President in exercise of his powers under the Customs & Excise Tariffs etc (Consolidated) Act.

Coverage

In line with Section 2 of the Bill, the provisions of the Act (when enacted) shall apply throughout the Federal Republic of Nigeria.

Read our alert for further details Download PwC Tax Alert_Nigeria Covid Economic Stimulus Bill

Here is a copy of the Bill Download Economic Stimulus Bill

Taiwo's Channels TV interview to dissect the Bill

FIRS Grants Tax Concessions in Response to COVID-19

In response to the Covid-19 crisis, the Federal Inland Revenue Service on 23 March 2020 announced certain measures.

Filing of returns, correspondences and communications

1. Use of e-platforms for filing of tax returns, payment of taxes and application for Tax Clearance Certificates
2. Taxpayers who are registered on e-filing platform can submit all their returns via efiling.firs.gov.ng
3. Electronic mail (e-mail) may be used for correspondences with the FIRS
4. For other issues, taxpayers may contact the FIRS Contact Centre on 0909 74444444 or 0909 71111111

Visits and physical meetings

Those who wish to visit FIRS offices are to adhere strictly to globally recommended social distancing rules. The following hygiene practices will be applied:

• All meetings with taxpayers are limited to a maximum of ten (10) people at a time
• All FIRS offices are being equipped with infrared temperature measuring devices, hand washing soaps and sanitizers. Floors, work surfaces and shared facilities will be regularly cleaned and sanitized
• FIRS officers, taxpayers and all visitors entering FIRS premises will be screened with a temperature scanner at all entry points. Persons with temperatures higher than 37.5°C may be denied access.  
• FIRS staff will be provided with protective gear such as gloves and face masks where required.

Tax audits

The Service plans to publish information requests for desk reviews and tax audits on its website and create a portal where such information can be uploaded by taxpayers for online review by the FIRS. 

Concessions

To limit the impact of Covid-19 pandemic on taxpayers, FIRS is offering the following palliatives:

1. Extension of time for filing VAT and withholding tax from 21^st to the last working day of the month, following the month of deduction
2. The due date for filing Companies Income Tax returns has been extended by one month 
3. Taxpayers may file returns using unaudited accounts but must subsequently submit audited accounts within two months after the revised due date of filing.

Read our alert for details: Download PwC Tax Alert_FIRS Grants Tax Concessions in Response to COVID-19

FIRS introduces electronic platform for transfer pricing filings

On 17 March 2020, the Federal Inland Revenue Service (FIRS) organized a stakeholder’s event for the official launch of its electronic filing solution for Transfer Pricing (TP) called E-TP PLAT 2.0. This electronic filing solution will allow taxpayers with TP and Country by Country Reporting (CbCR) obligations to file their annual TP and CbCR returns electronically.

The platform will be used for the electronic filing of the following returns:

• TP declaration forms;
• TP disclosure forms;
• CbCR notification forms; and
• CbC reports.

The E-TP PLAT 2.0 can be accessed via transferpricing.firs.gov.ng. Read our alert below for further information.

Download PwC Tax Alert_FIRS electronic TP filing platform_Mar2020