Pursuant to the approval given by the Federal Executive Council in 2016, the Federal Government of Nigeria signed a double taxation treaty (DTT) with the government of Singapore on Wednesday, 2 August 2017. The DTT is aimed at eliminating or providing relief for double taxation on income of companies and individuals that are resident in either country.
One of the critical focus of the new tax policy in Nigeria is to widen Nigeria’s tax treaty network. The benefits of the DTT to both countries cannot be overemphasized given the history of trade relations and prospects. However, the treaty is yet to be ratified by the National Assembly and thus remains inactive in Nigeria until ratified. It is expected that the treaty will be ratified speedily to support the ongoing efforts of government at improving the ease of doing business and particularly of paying taxes in Nigeria.
There are currently a number of signed DTTs between Nigeria and other trade partners which are pending ratification. A case in point is the DTT with Mauritius which was signed in 2012 but still pending ratification by the National Assembly. It is expected that efforts will be unified across the various arms of government to fast track the ratification of the DTT with Singapore as well as other pending treaties. Delay in the ratification of any treaty gives room for uncertainty amongst the treaty’s stakeholders and could impact the efforts at getting the buy-in of other intending countries.
We will keep monitoring this space and provide updates as soon as they become available to us.