The presidency debunked reports that the 2022 finance bill currently before the National Assembly would require Nigerians to have a tax identification number (TIN) to manage a bank account.
Recall that the leader of the Senate, Yahaya Abdullahi, had last week in his main debate on the bill, sent to the National Assembly by President General Muhammadu Buhari, said that the 2021 finance bill made it compulsory for commercial banks to require the TIN from anyone wishing to open an account with them.
Bill, he said, also allows banks to require TINs from existing customers if they wish to continue managing their accounts.
But a presidential source who pleaded for anonymity, claimed to have been involved in drafting the bill, said the news articles are “completely inaccurate, the bill does not contain such provisions for the individuals”.
The source outlined the main proposed changes in the bill that would be further defended this week in the Senate and House of Representatives:
“Capital gains tax at the rate of 5% applicable to the disposal of shares of a Nigerian company valued at 500 million naira or more during 12 consecutive months, except when the proceeds are reinvested in the shares of any Nigerian company in the same tax year. Partial reinvestment will attract tax proportionately. The transfer of shares within the framework of the regulated securities lending transaction is exempt.
“Lottery and gaming activities must be specifically taxable under the CITA, including betting, games of chance, promotional competitions, gambling, betting, video poker, roulette, craps , bingo, slot machines or games of chance and others.
“Companies engaged in petroleum operations, including intermediate and downstream operations, will not be eligible for the profit exemption in respect of goods exported from Nigeria. Downstream companies were previously eligible under the old Upstream and Downstream classification.
“FIRS will be empowered to assess the CIT on the turnover of a foreign digital company involved in the transmission, emission or reception of signals, sounds, messages, images or data of any kind, including e-commerce, app stores and online advertisements.
“The capital allowance payable on an asset is limited to the part used to generate taxable profits. Assets partially used to generate taxable income will be eligible for the pro rata capital allowance except when the share of non-taxable income does not exceed 20% of the company’s total income.
“Any capital deduction or unabsorbed deductions advanced by a small or medium-sized business, other than a pioneer business, should be considered to have been claimed and consumed in each of those valuation years.
“The reduction of the minimum tax rate from 0.5% to 0.25% of turnover (less franked investment income) must be applicable to two accounting periods between January 1, 2019 and December 31, 2021 at choice of taxpayer.
“The contested tax must be suspended until it is determined, while the uncontested tax must be paid within 30 days of service of the tax notice on the company, unless extended by FIRS. The reference to the provisional tax has been removed in recognition of the well-established self-assessment tax regime.
“Withholding tax on interest received by a mutual fund to be treated as final tax. Only the WHT on dividends is currently treated as a final tax for local companies.
“Deployment of technology to automate tax administration, including FIRS assessment and information collection, now includes third-party technology (previously only proprietary technology could be deployed). A penalty of 50,000 N is applicable when a company does not grant access to FIRS in more than 25,000 N for each day that the failure continues.
“The FIRS will be the principal agency of the federal government responsible for the administration, valuation, collection, accounting and enforcement of taxes owed to the Federation, the federal government and one of its organizations, unless otherwise authorized by the Minister of Finance.
“Any individual or agency of the federal government must refer matters requiring tax investigation, enforcement and compliance to FIRS. Relevant officers who break the rule face a sentence of N 10 million and / or 5 years’ imprisonment on conviction.
“Life insurance premium deductible for personal income tax purposes to exclude a deferred annuity contract.
“The Minister of Finance, subject to the approval of the National Assembly, regulates the taxation, administration, collection, remittance, including the distribution of arrears of stamp duty and currency transfer levies electronic collected between fiscal years 2015 and 2019.
“Higher education tax payable within 30 days of service of assessment (currently 60 days).
“Non-residents making taxable supplies to recipients in Nigeria have the primary obligation to invoice, collect and remit VAT to FIRS. Nigerian beneficiaries’ VAT withholding obligation is now limited to cases where the non-resident or his designated agent does not collect VAT.
“Exemption from VAT registration and compliance obligation applicable to small businesses with annual turnover of less than 25 million naira to exclude businesses engaged in upstream oil operations, regardless of their turnover.
“Appointment of FIRS to assess, collect and enforce the payment of the Nigerian Police Trust Fund Fee.” The law enacted in 2019 imposed a tax of 0.005% on the net profit of companies operating in Nigeria.
“Amendment of the Law on Infrastructure of the National Agency for Science and Engineering to remove the obligation for commercial enterprises to pay a tax of 0.25% of turnover annually to the Fund. The main sources of funds will be limited to 1% of the Federation account.
“Compulsory payment of gross revenues collected by federal ministries, departments or agencies to the account of the federation or to the consolidated revenue fund, as the case may be, unless otherwise authorized by law.” Any officer who violates this requirement may be liable, on conviction, to imprisonment for up to 5 years or a fine of 5 million Naira or both.
“Amendment of the Fiscal Responsibility Law to allow the government to borrow for” critical reforms with significant national impact. ” Currently, governments at all levels are empowered to borrow only for capital expenditure and human development. Capital expenditure is defined as the expenditure on an asset that lasts more than one fiscal year. Human development and critical reforms are not defined.