The Continental Free Trade Agreement: Is no deal the right deal for Nigeria?
On 22 March 2018 in Kigali, Rwanda, Heads of State of forty-four African countries, gathered to sign the African Continental Free Trade Agreement (“AfCFTA” or “the Agreement”), the landmark agreement which amongst others aims to liberalize trade across Africa.
Nigeria announces three-month extension of tax amnesty programme
President Muhammadu Buhari has approved the extension of the Voluntary Assets and Income Declaration Scheme (VAIDS or the Scheme) by three months. The Scheme which originally lasted for 9 months and expired on 31 March 2018 will now run till 30 June 2018. As the original deadline was premised on an executive order, a fresh executive order will be issued to give legal backing to the new timeline.
Nigeria’s new excise regime: Is this the right time?
Barring any last minute reversal, locally manufactured tobacco and alcoholic beverages (“Excisable Products”) will be subject to a new excise regime from 4 June 2018. This new regime is pursuant to Section 13 of the Customs, Excise Tariff Etc. (Consolidation) Act which enables the Nigerian President to impose, vary or remove any import or excise duty.
Lagos State Government announces changes to the Land Use Charge Law
The Lagos State Government (LASG) has announced revisions to provisions of the Land Use Charge Law 2018 (LUC Law); principally covering a reduction in land use charge (LUC) payable on various categories of property in Lagos State.
Federal Government approves changes to excise duty regime
The Federal Government of Nigeria (“FGN”), has approved changes to the rates and bases for levying excise duties on alcoholic beverages and tobacco. The new regime, communicated via the circular referenced 17642/II/172 and dated 6 March 2018 (“the Circular”), becomes effective from 4 June 2018 and the increase in taxes will be phased on a graduated scale from June 2018 to 2020.
Taxation of commissions payable to insurance brokers/agents – An obligation or a nightmare?
The insurance industry is one of the specialised businesses having a peculiar business model and corresponding distinct tax considerations in Nigeria. The core business of insurers/insurance companies, simply put, is to provide cover to another party (insured), against possible financial loss within a specified period. In return, the insured pays an insurance premium at the inception of the cover period, which forms part of the income reported in the books of the insurer. A critical aspect of the business expansion mechanism in the insurance industry revolves round brokers and agents. Insurance brokers/agents act as middle men; bridging the gap and linking insurers with potential insured parties seeking to hedge against risks. Insurance companies incur costs in sourcing the services of brokers/agents (commissions). Commissions are often calculated as a percentage of the insurance premium, depending on a number of factors such as coverage, the insurer and marketing methods, etc. Although the…
Nigerian Government chases after VIPs & HNIs to regularise their tax status
The tax landscape in Nigeria is changing fast and efforts at bringing taxable individuals into the tax net is gaining momentum. Those who have not been tax compliant in the past are being advised to take advantage of the 9-month tax amnesty scheme through Voluntary Assets & Income Declaration Scheme (VAIDS) before the door closes by 31 March 2018. As part of the implementation of VAIDS, many high net worth individuals (HNIs) and very important personalities (VIPs) have been receiving letters from Ministry of Finance (MoF) and various State Boards of Internal Revenue Services on their tax status, requesting them to take advantage of VAIDS to regularize their tax status. The first set of letters were issued last year following a special data mining project (“Project Lighthouse”) carried out by MoF in preparation for aggressive tax chase upon expiration of VAIDS. Data from sources such as Bank Verification Number (BVN),…
CBN restricts dividend pay-out by banks
The apex bank, Central Bank of Nigeria (CBN), has issued new guidelines to all banks including Deposit Money Banks (DMBs) and Discount Houses (DHs), on internal capital generation and dividend pay-out ratio. The new guidelines, issued via a circular (the Circular) referenced BSD/DIR/GEN/LAB/11/002 and dated 31 January 2018, becomes effective immediately.
PenCom issues public notices on administration of Life Insurance Policy
The National Pension Commission (PenCom), on Wednesday, 14 February 2018, issued two-pronged notices to both employers and employees on the administration of life insurance policy. The public notices are meant to serve as a reminder to the earlier issued guidelines for life insurance policy by PenCom.
LIRS to automate collection of consumption tax using Electronic Revenue Assurance system
The Lagos State Internal Revenue Service (LIRS) has introduced an Electronic Revenue Assurance (ERA) system for the collection of consumption taxes from hotels, night clubs and event centres (hospitality outlets) in Lagos State.