IMPORTANT NOTIFICATION IN THE TAX LAWS AS AMENDED THROUGH THE FINANCE ACT 2023

IMPORTANT NOTIFICATION IN THE TAX LAWS AS AMENDED THROUGH THE FINANCE ACT 2023

In the latter period of the administration of the former president of The Federal Republic of Nigeria, Muhammadu Buhari signed the Finance Bill 2023 into law on Sunday, May 28, 2023, and by implication, the Act amended specific provisions of the Tax laws.

THE EFFECTIVE DATE

The effective date of the Finance Act 2023 is 1 May 2023.

CAPITAL GAIN TAX ACT: The Act amended three Capital Gain Tax Act sections.

  • Taxation on Gain on the Disposal of ‘Digital Asset’ including cryptocurrency at the rate of 10%
  • On the Deduction of capital losses on assets for capital gains tax purposes, may be carried forward for a maximum of 5 years immediately succeeding the year in which the loss was incurred.
  • ­Replacement of Business Assets, Rollover relief on the sale of shares is subject to reinvestment of the proceeds within the same year of assessment.

COMPANY INCOME TAX ACT

It stipulates that any companies in air Transport and shipping operating in Nigeria shall submit details of gross revenue statements of its operation that will fully show the sum earned during this period.

CUSTOMS, EXCISE, TARIFF ETC (CONSOLIDATION) ACT

  • The Act imposes a 0.5% levy on goods imported into Nigeria from outside Africa.
  • All services provided including telecommunication services shall be deemed for duties of excise at the rate specified and by the order of the president of the Federal Republic of Nigeria.

PERSONAL INCOME TAX ACT

The Act Provided that any portion of the deferred annuity before the end of the five (5) years from the point of withdrawal, therefore, imposition of tax on individuals, spouses, life, and contract on premium paid for insurance.

STAMP DUTIES ACT

The Act provides Sharing of Electronic Money Transfer (EMT) levy of 15% to Federal Government, 50% to State Governments, and 35% to Local Governments.

 VALUE-ADDED TAX ACT

  • Application of transfer pricing rules to VAT on transactions between connected persons considered to be artificial or fictitious.
  • Companies appointed to withhold VAT at source are to remit such VAT to the FIRS on or before the 14th day of the following month.
  • Where taxable goods imported in Nigeria were purchased through an online electronic or digital platform, operated by a non-resident supplier that FIRS has appointed for collection of the tax, the importer shall at the point of clearing such goods, provide proof of such registration or appointment, and such goods shall not be further subjected to tax before clearing by Nigeria Customs Service, also subject to modalities between FIRS the Nigeria Customs Service.
  • ‘Building’ is a new definition of ‘Building’ as a structure permanently affixed to land for all or most of its useful life.

TERTIARY EDUCATION TRUST FUND (ESTABLISHMENT ETC) ACT

The Act replaces the initial rate of 2.5% with 3%. It signifies an upward increase of 0.5% in the Tertiary Education Tax Rate. Thus, the current rate is 3%.

Comments

comments

Leave a Reply

Your email address will not be published. Required fields are marked *

*

This site uses Akismet to reduce spam. Learn how your comment data is processed.