In case you missed my #FinanceBill discussion yesterday on @NigeriainfoFM with @wemimospot and @SheriffQuadry, this thread gives you a quick overview of the session. 
The Nigeria Tax and Fiscal Law (amendment) Bill popularly known as the Finance Bill is the first of its kind in Nigeria since 1999.
It contains 56 sections seeking to make about 98 amendments to 7 different tax laws - CITA, PPTA, PITA, CGTA, VATA, CETA, and SDA
Key objectives of the Bill are (1) ensure fiscal equity (2) support MSMEs (3) incentivise infrastructure and capital market (4) reform Nigeria's tax laws to global standards and (5) raise revenue for govt.
Fiscal equity requires that all taxpayers are treated fairly without discrimination while taxes should be progressive so that people pay according to their abilities.
In this regard the restrictions on losses and expense deductibility; and the special minimum tax for insurance companies have been removed.
Also the double taxation of new companies during commencement and the minimum tax on companies based on their assets and share capital have been removed. Min tax now 0.5% of turnover with exemption for small companies.
Excess dividend tax provision that discourages a holding company structure in Nigeria and taxes companies on their retained earnings etc has been amended to eliminate the incidence of double taxation.
SMEs with annual turnover less than N25m to be exempted from VAT registration and company income tax. Companies with turnover between N25m and N100m to pay 20% CIT and be entitled to a 2% bonus for early filing and payment of their income tax.
The multiple layers of taxes on unit trusts, security lending transactions and real estate investment companies have been removed. Also introduced stamp duty exemption on shares and securities.
VAT and CGT on company reorganisation to be removed while emails can now be used for official correspondence with tax authorities. Deductibility of interest on related party loans to be subject to a cap of 30% of earnings (EBITDA).
VAT exemption granted on services rendered by micro finance banks, people's banks and mortgage institutions.
Fines for tax violation have been increased, while WHT at 10% will apply on dividends from petroleum profits. Children & dependent relatives allowances have been removed while expenses incurred to earn tax exempt income will be disallowed.
Incentives regarding gas utilisation and WHT reduction on foreign loan interest have been rationalised. Definition of supply for VAT purposes has been expanded to include all transactions except land, money, securities and employment services.
To raise revenue, VAT rate will increase from 5% to 7.5%. Imported services to be liable to VAT while foreign providers of services and digital transactions with significant economic presence in Nigeria will be liable to income tax.
S.30 of the Bill states that "every person engaged in banking shall require that a person intending to open a bank account for the purpose of its business operations must provide a TIN as a precondition for opening such bank accounts or continued operation of a bank account."
Tax Identification Number (TIN) will be required to open and operate a business bank account by companies and individuals. The requirement does not apply to all bank accounts.
In any case, every individual is required by law to register for TIN which is free. Obtaining a TIN doesn't mean taxes must be paid. Payment of taxes is based on taxable income. To simplify the process, govt should liaise with banks to do TIN registration for their customers.
TIN registration can be done via jtb.gov.ng or nearest tax office. Bank account holders can verify their TIN via tinverification.jtb.gov.ng
The stamp duty of N50 on money transfer including POS transactions will now apply only on transactions worth N10,000 and above as opposed to the current threshold of N1,000.
Basic food items - bread, cereal, roots, vegetables, fish, flour & starch, meat, milk, nuts, salt, water, etc and tuition are now VAT exempt in addition to existing exemptions on baby products, medical services, etc
It is expected that the Bill will be signed into law before end of the year and become effective from 1st of January 2020.
