Reps pass finance bill through third reading

The House of Representatives, on Thursday, passed the finance bill which seeks to ensure upward review of various taxes in the country, through the third reading.

The bill includes the review of the Companies Income Tax Act, Value Added Tax, Customs and Excise Tariff, Personal Income Tax, Capital gains Tax, Stamp Duties, Petroleum Profit Tax, respectively.

The report which was laid on the 28th of November, 2019 was passed at the Committee of the Supply without any dissenting voice.

According to Chairman, House Committee on Media and Public Affairs, Hon Benjamin Kalu confirmed that Nigerian Postal Commission (NIPOST) has been stripped from the responsibility collection of N50 Stamp Duties and transferred it to Federal Inland Revenue Service (FIRS).

According to the report obtained exclusively by Tribune Online, the N50 one-off stamp duties, however, exempts all electronic receipt or transfer for money deposited in any bank or with any banker, on any type of account, to be accounted for amounting from N10,000 upwards, except that monies paid into one’s account or transferred electronically between accounts of the same owners by the owner within the same bank.

The House also approved the increase of VAT from 5% to 7.5% on services rendered in Nigeria regardless by a person physically present or not, as well as services rendered within Nigeria or outside.

On the sanction, the bill provides that: a taxable person who fails or refuses to register with FIRS within the time specified in the bill shall be liable to pay N50,000 fine for the first month, N25,000 for each subsequent month of default.

Where a taxable person permanently ceased to carry on a trade or business in Nigeria, the taxable person shall notify the Service of its intention to deregister for tax purposes within 90 days of such cessation of the trade or business.

A non-resident company is also under the obligation to be taxed on the invoice for the supply of taxable services while the person to whom the services are supplied in Nigeria shall withhold and remit tax directly to the Service in the currency of payment.

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Any taxable person who fails to notify the Service of a change of address of business or trade shall be liable to a fine of N50,000 for the first month and N25,000 for the subsequent month of default.

Any taxable person who fails to submit returns shall be liable to a fine of N50,000 for the first month and N25,000 for the subsequent month of default.

On the amendment to the Customs and Excise Tariff, etc (Consolidation), Act, the House empowered Nigeria Customs to impose a duty on “goods manufactured in Nigeria and specified in the Fifth Schedule to this Act shall be charged with duties of Excise at the rate specified under the Duty Column.”

It also provides that goods imported and those manufactured in Nigeria shall be charged with duties of Excise at the specified rates in the Duty Column.

According to the remarks, the provision was aimed at protecting the local industries and make their prices competitive and avoid double taxation.

The Companies Income Tax amendment also affects real estate investment companies, dividend, interest, rent or royalty paid by companies.

Section 23 of the report however exempts profits of any company being a statutory or register friendly society in so far as such profits are not derived from a trade or business carried on by such society.

Others include profits by a cooperative society, profits of any company engaged in ecclesiastical, charitable or educational activities of a public character, a company sponsoring sporting activities and profits generated by registered Trade Unions.

In the bid to encourage diversification of the economy into agriculture, the bill also provide for incentives for “any company engaged in agricultural production and processing in addition to other incentives.

“An initial tax-free period of 5 years which may subject to satisfactory performance of the agricultural business, be renewed for an additional maximum period of 5 years.”