President Muhammadu Buhari sent the Finance Bill 2021 to the National Assembly on December 7, 2021, and the Nigerian Senate passed it yesterday.
The Senate Joint Committee on Finance, Customs, Excise and Tariff; Trade and Investment, according to The Nation, passed the bill after considering a report by the Senate Joint Committee on Finance, Customs, Excise and Tariff; Trade and Investment.
One of the Bill's most notable features is the provision granting the Federal Inland Revenue Service (FIRS) the authority to assess non-resident companies such as Twitter, Facebook, Google, and Netflix, among others.
They will be taxed on the fair and reasonable revenue generated by digital services provided to Nigerian clients.
In addition, the Finance Bill instructs FIRS to appoint individuals to collect and remit non-resident taxes.
Senator Solomon Adeola, Chairman of the Joint Committee, stated in his presentation that the Bill aims to aid in the implementation of the Federal Budget for Economic Growth and Sustainability for 2022 by proposing key specific taxation measures such as Customs Duties, fiscal charges, and other relevant laws.
According to Adeola, who represents Lagos West, the Finance Bill altered a total of 12 Acts, containing 39 clauses.
He said the bill aimed to increase government income by promoting fiscal justice, aligning local tax rules with global best practises, introducing tax incentives for infrastructure and the capital market, and supporting small enterprises.
"Due to the COVID -19 impact on the economy, the Finance Act 2020 was structured across four broad thematic areas: Enacting counter-cyclical measures and crisis intervention initiatives; Tax, fiscal responsibility, and public procurement reforms; Reforming fiscal incentives policies for job creation; ensuring closer coordination of monetary, trade, and fiscal policies; and Enhancing tax administration."
According to the committee, a 5% capital gains tax should be applied on share disposal transactions with gains exceeding N250 million in a 12-month period.
It was also suggested that gaming and lottery corporations be taxed in the same way that oil and gas companies were.
The bill emphasised the importance of corporate taxation for midstream and downstream oil and gas enterprises, without the benefit of tax exemptions for businesses that export commodities to generate foreign currency.
The bill also seeks increased powers for the Federal Inland Revenue Service (FIRS) to collect NPTF levies on Nigerian enterprises and to streamline tax and levy collection from Nigerian businesses in line with the administration's ease of doing business policies.
The Nigerian government should ensure that FIRS uses both proprietary and third-party tech applications to collect information from taxpayers, enhance confidentiality and non-disclosure, and enable them to investigate tax evasion and other crimes and sanction tax defaulters, according to the committee.
The bill also authorises FIRS to assess and tax non-resident enterprises on revenue received from digital services provided to Nigerian clients on a fair and reasonable turnover basis, as well as appoint persons to collect and remit non-resident taxes.