July 10, 2019

The Federal Government has directed the Central Bank of Nigeria, Nigeria Interbank Settlement System, the National Identity Management Commission to cooperate with the Joint Tax Board in the release of relevant individual records. Vice President Yemi Osinbajo stated this while inaugurating the new National Tax Identification Number Registration System on Monday in Abuja. The News Agency of Nigeria reports that new tax administration was built around data, adding that without credible and comprehensive data, an efficient tax system would be impossible. Osinbajo said that TIN gave the managers of the national tax administration systems the capacity to conveniently and efficiently access and connect information from multiple sources. He said, “(What) we seek to achieve is really to attract business and more importantly, local business; and it is local business investment that develops the economy the most. “If it is easy for the local person to do business, it becomes more attractive to the international business to come into the country. “All of these reforms attract the levels of investment and inflows the Nigerian economy requires for sustainable economic growth. “In the light of the foregoing, all agencies critical to the optimal success of this initiative, the CBN and NIBBS, National Identity Management Commission are hereby directed by the President to provide the fullest co-operation to the JTB especially in the release of the relevant individual records. “The JTB, led by its chairman, Mr Babatunde Fowler, all the partners and stakeholders who have made this possible, deserve our commendation for this giant leap. “The Nigerian business and economic environment are the better for your hard work and continuous innovation,” Osinbajo said.   Source: Investor King

A former Minister of Finance, Mrs. Zainab Ahmed, yesterday said the federal government was planning to increase the rate of value-added tax (VAT) to 7.5 per cent from the current five per cent by 2020. This is as the government seeks to shore up falling revenue, according to Bloomberg. Speaking at the Bloomberg Emerging & Frontier Forum in London, the former minister, whose tenure ended with President Muhammadu Buhari’s first term on May 29, said that her main preoccupation while in office was how to raise government’s revenue with only 55 per cent of targets being met. Buhari, who was re-elected for a second four-year term, is yet to constitute a new cabinet. She said: “We have developed a strategic revenue growth initiative, which we have started to implement. “Our target is to increase revenue to 65 per cent minimum in 2019 so that in the next three years we are able to attain 80-85 per cent of our revenue target.” However, earlier plans by government to increase VAT had been vehemently opposed by Nigerians. In April, following a public backlash, Executive Chairman, Federal Inland Revenue Service ((FIRS), Mr. Babatunde Fowler, refuted reports it had proposed a 50 per cent increase in VAT when he appeared before the National Assembly to defend the agency’s 2019 budget. But Fowler maintained that his position was misrepresented as he actually recommended an increase in the number of Nigerians and companies paying VAT and not the other way around. A statement issued by his media department to debunk the claim stated: “Though he indicated that there should be an increase in the VAT rate by the end of the year, he never for once suggested a 50 per cent hike or any percentage increase at all. “Rather, he promised improved collection in CIT, Petroleum Profits Tax, PPT and VAT in 2019 relative to the collection performance of the service in 2018. “In 2018, FIRS collected the sum of N1.1 trillion in VAT; N1.42 trillion in Companies Income Tax (CIT); and N2.4 trillion in Petroleum Profits Tax (PPT).” Also, Ebonyi State Governor, Chief David Umahi, had further opposed the proposed plan by the federal government to lift Value Added Tax (VAT) from five per cent to 35 per cent, stressing that it would put the country in difficult situations. The governor had said that the plan, which was proposed by the federal government in order to pay workers’ salary with the implementation of the N30,000 minimum wage, was like digging a hole to fill a hole. According to the National Bureau of Statistics (NBS), the federal government generated N1.10 trillion as VAT in 2018, representing a growth of 13.96 per cent (year-on-year) when compared to the N972.34 billion collected in 2017.   Source: Investor King

The Tax Appeal Tribunal, South East Zone, has said that gratuities are tax exempted under the Personal Income Tax Act. The tribunal made the declaration while delivering judgement in the appeal Nigerian Breweries Plc brought against Abia State Board of Internal Revenue, challenging the decision of the Board to tax gratuities paid to its employees. The Appellant in appeal No. TAT/SEZ/002/17 set out three grounds of appeal, among which are “that Respondent (ASBIR), erred in law when it assessed the Appellant’s employees to tax on gratuities paid by the Appellant.” The Appellant, through its counsel, Moshood Olajide, contended that under the finance (Miscellaneous Taxation Provision) No. 2 Decree 1996 amended section 3(1)(b) of PITA 1993 by deleting gratuities as income chargeable to tax. That by the clear wording of the 1996 Decree, gratuities are no longer taxable, and, therefore, remained the extant position in the PITA 2011 (as amended). He, therefore urged the Tribunal to discharge the assessment notice issued by the Respondent and a declaration that by the virtue of Decree 1996 all gratuities are tax exempt. But the Respondent, through its counsel, Obike Onyemeru, urged the tribunal to dismiss the appeal and sustain the demand notice. While he argued that there was no law expressly exempting gratuity in excess of N100,000 from tax, he contended that item 18(b) of the 3rd schedule to the PITA, CAP P. 8 LFN, 2011 (as amended) “has not been repealed and remains the extant law.”   Source: Investor King