List of New Tax Nigerian Government Is Set to Implement for Businesses and Individuals
- The Federal government is determined to boost its non-oil revenue as debt continues to gulp a huge chunk of its oil revenue
- Experts have continuously warned that the current level of Nigeria's non-oil revenue is not enough
- Various tax reforms are set to be implemented while others are already in place for individuals and businesses
In its bid to boost Nigeria's non-oil revenue, the Federal Government is looking at implementing various taxes.
On Monday, 8th August 2022, the Budget Office of the Federation revealed that FG will begin implementing its proposed excise duties on telecommunication services and beverages in 2023.
The Budget Office of the Federation, which is under the Ministry of Finance, Budget and National Planning, revealed its plan in its ‘2023 – 2025 Medium Term Expenditure Framework and Fiscal Strategy Paper.
Source: Facebook
According to the ministry, this was in a bid to boost its non-oil revenue streams. The minister further said that it expected excise duty revenue to grow exponentially because of the introduction of telecom service charges, Punch reports.
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Discussing the tax, which is under the purview of the Nigeria Customs Service, the government said the NCS would introduce frameworks for recovering duties, taxes, and appropriate fees from transactions conducted over electronic networks.
Although the Minister of Communications and Digital Economy, Isa Pantami, and the Manufacturers Association of Nigeria have resisted the move, it seems all could be set for implementation has been announced.
Pantami had, during the maiden edition of the Nigerian Telecommunications Indigenous Content Expo organised by the Nigeria Office for Developing the indigenous Telecom Sector, slammed the five per cent tax on telecoms services.
He said,
“The Ministry of Communications and Digital Economy is not satisfied with any effort to introduce excise duty on telecommunication service
Two taxes causing generating controversy
- Imposition of excise duty at N10 per litre on non-alcoholic, carbonated and sweetened beverages.
- 5% per cent inclusive excise duty on telecommunications services(telephone recharge cards and vouchers) in Nigeria approved by President Buhari.
List of taxes in Nigeria
Companies Income Tax (CIT) is a tax imposed on a profit of a company from all sources. The rate of tax is 30% of the total profit of a company.
Personal Income Tax
The rate of the tax ranges from 7% to 24%, depending on the amount of chargeable income- Individuals are subject to a minimum tax of 1% of gross income where the income is less than N300,000 per annum.
A person who fails to file a return shall be liable on conviction to a fine of N5,000 and a further sum of N100 for every day during which the failure continues or imprisonment of six (6) months or both.
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While any employer who fails to file a return shall be liable on conviction to a penalty of N500,000 for the corporate body and N50,000 in the case of an individual.
Withholding Tax (WHT)
This is a method used to collect Income Tax in advance. Varying rates range from 5% to 10%, depending on the transaction.
The penalty for late filing of returns is N25, 000 for the first month it occurs and N5, 000 for each subsequent month the failure continues
VAT
This is a consumption tax paid when goods are purchased its rate is 7.5%
Personal Income Tax- The tax is imposed on the income of individuals, corporate sole or body of individuals, communities, families and trustees or executors of any settlement.
The rate of the tax ranges from 7% to 24%.
Stamp Duty (SD)
It is administered on written documents only. t is administered by both FIRS, FCT and respective States' Internal Revenue.
Capital Gains Tax (CGT)
Capital Gains Tax is charged at a flat rate of 10% of chargeable gains.
National Information Technology Development Levy (NITDL)
The Levy is charged on specified companies with a turnover of N100 million and above. The Levy is charged at the rate of 1% of Profit before tax.
Tertiary Education Trust Fund
The rate of the tax is 2% of the assessable profit.
The first offence against the Act is liable on conviction to a fine of N1, 000,000 or a term of 6 months imprisonment or both. Second and subsequent offences attract a fine of N2, 000,000 or a term of 12 months or both.
Expert speaks
Meanwhile, Taiwo Oyedele, Fiscal Policy Partner and Africa Tax Leader at PwC, have lamented the excessive tax placed on companies’ profit in Nigeria.
In a Twitter post, he stated that it seems @nassnigeria is bent on taxing businesses out of existence.
FG releases names of 19,847 companies that can apply for its contract in 2022
In another report, the Federal Government produced a list of 19,847 Nigerian firms eligible to bid on ministry contracts.
The list was produced based on companies' compliance with employee pensions and insurance.
The companies listed are from media to health and agriculture and banks, among several others
Source: Legit.ng
