A top source at the Presidency has revealed that there are no provisions in the Finance Bill 2021 that makes it mandatory for Nigerians to have a Tax Identification Number (TIN) in order to operate a bank account. The clarification follows media reports a few days ago that the Federal Government in the 2021 Finance bill has a provision that banks will be required to request for TIN before opening bank accounts for individuals while existing account holders must provide their TIN to continue operating their accounts. The bill is, at present, before the National Assembly seeks to amend about 12 different laws. According to NAN, the Presidency source, who was involved in the drafting of the bill, said the news reports were totally inaccurate as the bill has no such provisions for individuals.
The Presidency source highlighted the main changes proposed under the bill to include; Capital gains tax at the rate of 5% to be applicable on disposal of shares in a Nigerian company worth N500 million or more in any 12 consecutive months except where the proceed is reinvested in the shares of any Nigerian company within the same year of assessment. Partial re-investment will attract tax proportionately. Transfer of shares under the regulated Security Lending Transaction is exempted. Lottery and Gaming business to be specifically taxable under CITA including betting, game of chance, promotional competition, gambling, wagering, video poker, roulette, craps, bingo, slot or gaming machines and the likes. Companies engaged in petroleum operations including Midstream and Downstream operations will not be eligible for exemption on profits in respect of goods exported from Nigeria. Downstream companies were previously eligible under the old Upstream and Downstream classification. FIRS to be empowered to assess CIT on the turnover of a foreign digital company involved in transmitting, emitting, or receiving signals, sounds, messages, images or data of any kind including e-commerce, app stores, and online adverts. The reduction of minimum tax rate from 0.5% to 0.25% of turnover (less franked investment income) is to be applicable to any two accounting periods between Jan. 1 2019 and Dec. 31, 2021 as may be chosen by the taxpayer.
Disputed tax assessment to be in abeyance until determination while undisputed tax assessment is to be paid within 30 days after service of the notice of assessment on the company except otherwise extended by the FIRS. Reference to provisional tax has been deleted in recognition of the well-established self-assessment tax regime. Withholding Tax (WHT) on interest earned from a unit trust to be treated as final tax; only WHT on dividend is currently treated as final tax for local companies. The deployment of technology to automate tax administration including assessment and information gathering by FIRS to now include third party technology (previously only proprietary technology may be deployed). A penalty of N50,000 to be applicable where a company fails to grant access to FIRS in addition to N25,000 for each day the failure continues.
The FIRS to be the primary agency of the Federal Government responsible for the administration, assessment, collection, accounting and enforcement of taxes and levies due to the Federation, the Federal Government and any of its agencies except otherwise authorised by the Finance Minister. Any person or agency of the Federal Government must refer matters requiring tax investigation, enforcement and compliance to the FIRS. Relevant officers who violate the rule to be liable to a penalty of N10 million and/or 5 years imprisonment on conviction. Tertiary Education Tax to be payable within 30 days of service of assessment (currently 60 days). Amendment of the National Agency for Science and Engineering Infrastructure Act to remove the requirement for commercial companies to pay a levy of 0.25 per cent of turnover annually to the Fund. Primary sources of fund to be limited to one per cent of the Federation Account.
Mandatory payment of gross revenue collected by federal ministries, departments or agencies to the federation account or consolidated revenue fund as the case may be except otherwise authorised by law. Any officer who violates this requirement may be liable on conviction to imprisonment of up to five years or a fine of N5 million or both. What you should know Recall that a few days ago, the 2021 Finance bill scaled second reading in Senate, following a presentation of the lead debate by the Senate Leader, Mr Yahaya Abdullahi at plenary.
