July 12, 2019

From July, you will start paying VAT for stock exchange transactions

Investors and dealing members will begin to pay value-added tax for transactions carried out on the Nigerian Stock Exchange (NSE). This is due to the expiration of the Value-Added Tax (Exemption of Commissions on Stock Exchange Transactions) Order of 2014. During her tenure as coordinating minister for the economy and minister of finance, Ngozi Okonjo-Iweala had exempted VAT deductions from commissions earned on the traded value of shares, commissions payable to the Securities and Exchange Commission, commissions payable to the Nigerian Stock Exchange and commissions payable to the Central Securities Clearing System. At the time, Okonjo-Iweala said the purpose of the exemption was to encourage investments in the Nigerian capital market. VAT is a type of consumption tax placed on a product at every stage of processing/value addition. The cost is usually paid by the consumer. The order, which was a result of the powers conferred on the minister of finance in section 38 of the Value Added Tax (VAT) Act, was to be effective for five years. The section of the act empowers the minister to amend the rate of tax chargeable; and amend, vary or modify the list of exempted goods and services set out in the first schedule to the act. The five-year period lapses on July 25. Except there is an order from the ministry of finance extending the exemption, transactions carried out on the stock exchange will be eligible for VAT deductions. In an interview on Tuesday, Zainab Ahmed, former minister of finance, said the federal government has plans to raise VAT from the current 5% to 7.5% by 2020.   Source: The cable

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Fg increase VAT by 2020 ex finance minister.

Mrs Zainab Ahmed, former minister of finance, says the federal govt is planning to increase VAT from the current five percent to 7.5 percent by 2020 – The development comes amidst reports that the government is seeking to shore up falling revenue – Ahmed said the government had developed a strategic revenue growth initiative which was being implemented. The federal government is planning to increase the rate of value-added tax to 7.5 percent from the current five percent by 2020, says the former finance minister, Mrs Zainab Ahmed. The ex minister made the disclosure on Tuesday, June 25 at the Bloomberg Emerging & Frontier Forum in London, ThisDay reports. The development comes as Bloomberg reported that the government is seeking to shore up falling revenue. Nigerians had previously opposed earlier plans by the federal government to increase VAT. Ahmed, 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 percent of targets being met. She said: “We have developed a strategic revenue growth initiative, which we have started to implement. “Our target is to increase revenue to 65 percent minimum in 2019 so that in the next three years we are able to attain 80-85 percent of our revenue target.” Recall that Legit.ng previously reported that the Federal Inland Revenue Service (FIRS) on Wednesday, March 20, refuted reports of a planned increment of Value Added Tax (VAT) by 50 percent to meet up payment of the newly proposed minimum wage. The head, Communication and Servicom Department, Wahab Gbadamosi, made this known in a statement in Abuja. He said that contrary to reports in the media, the FIRS chairman called for a reduction in Companies Income Tax (CIT) rate for small businesses so as to improve compliance.   Source: Legit

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Deadline For Filing Income Tax And Transfer Pricing Returns

The deadline for filing of income tax and transfer pricing (TP) returns with Federal Inland Revenue Service (FIRS) is fast approaching for corporate taxpayers whose financial year-end is 31 December. The Companies Income Tax Act (CITA) and Income Tax (Transfer Pricing) Regulations 2018 (the TP Regulations) require corporate taxpayers to file annual companies income tax (CIT) and TP returns within six (6) months after their financial year-end (i.e., due date for filing). Failure to do so attracts administrative penalties. While the penalty for failure to file CIT returns on the due date is ₦25,000 for the first month of default and ₦5,000 for each subsequent month, the penalties for failure to file TP returns on the due date have been revised upward as follows: Failure to file the TP declaration form (if applicable) within the stipulated time attracts a penalty of ₦10 million for the first month of default and ₦10,000 for every day the failure continues. Failure to file the TP disclosure form within the stipulated time attracts a penalty of ₦10 million or 1% of the value of the controlled transaction(s), whichever is higher, for the first month of default and ₦10,000 for every day the failure continues. CITA and the TP Regulations allow taxpayers to apply for an extension of the due date for filing of their CIT and TP returns, respectively, where they are unable to meet such due date. While taxpayers are only required to show good cause when applying for an extension of the due date to file TP returns, taxpayers are required to meet certain stringent conditions when making an application for extension of the due date to file CIT returns. However, it should be noted that the grant of extension of the filing date is solely at the discretion of FIRS. In view of the above, taxpayers are advised to ensure that their CIT and TP returns are filed at their respective tax offices on or before 28 June 2019 in order to avoid the administrative penalties.   Source: Mondaq

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Dame Simplice elected 14th President of CITN

The Chartered Institute of Taxation of Nigeria has elected new officers to steer the affairs of the th Institute for the next two years. Following the successful conduct of the 27 Annual General Meeting of the Institute, the leadership baton of the Institute was officially passed on to Dame. Gladys Olajumoke Moyosoreoluwa Ayinke Simplice, by Chief (Dr.) Cyril Ikemefuna Ede, FCTI, who has immediately taken over the position of the Immediate Past President. Dame Simplice was unanimously elected the 14th President of the Institute at an Extra-Ordinary Council Meeting held at the Secretariat of the Institute. Other elected officers of Council included: Mr. Adesina Adedayo, FCTI – Vice President, Barr. Samuel Olushola Agbeluyi, FCTI – Deputy Vice President and Mr. Innocent Ohagwa, FCTI was elected as the Honorary Treasurer. Dame Gladys Olajumoke Simplice started her academic career at Araromi Baptist School, Moloney, Lagos while her secondary education was at the Methodist Girls High School, Yaba, Lagos and Premier Grammar School, Lafenwa, Abeokuta. She commenced her Higher School Certificate (HSC) with Adeola Odutola College, Ijebu-ode and finished at the Saint Gregory’s College, Obalende, Lagos. Thereafter, she proceeded to Ahmadu Bello University, Samaru, Zaria where she graduated with a B.Sc in Economics. Dame Simplice commenced her tax career with the Federal Inland Revenue Department, (now Federal Inland Revenue Service) and retired after 27 years of a fulfilling and meritorious service. Due to her diligence during her service years, she was given a contract appointment as Head, Channels Management of the Corporate Communication Department of FIRS in 2009. She made a lot of improvement in the Department and initiated the idea of a Revenue Museum which is still a work in progress at FIRS.   Source: Sun News

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MAN Urges FG to Halt 50% Increase in VAT

The Manufacturers Association of Nigeria has called on the Federal Government to jettison the idea of increasing the Value Added Tax by 50 per cent. MAN President, Mansur Ahmed, made this call on Wednesday, during the 35th Annual General Meeting of the Rivers/Bayelsa Branch of the association, held in Port Harcourt. Ahmed explained that the insistence on upward review of VAT would be counterproductive, especially in the light of the non-implementation of the long-awaited minimum wage. He also said that MAN had discussed with the Federal Inland Revenue Service with a view to addressing the numerous challenges in the tax system, adding that the result of such engagement was currently being felt in the nation’s business environment. ‘’We have advised the government to jettison the idea of increasing VAT by 50 percent as recommended by the Federal Ministry of Finance. We have clearly stated that such move will be counterproductive especially in the light of the still awaited minimum wage,’’ he stressed. The MAN president lauded President Muhammadu Buhari for consulting widely before signing the African Continental Free Trade Area Agreement in Niamey, Niger Republic. Ahmed assured MAN members that the Federal Government was committed to enhancing the capacity of Nigeria’s manufacturing sector to take advantage of the opportunities inherent in the continental free trade area and to mitigate the numerous risks. Earlier in his remarks, the MAN Chairman, Rivers/Bayelsa Branch, Senator Adawari Pepple, observed that the manufacturing sector was going through many challenges, including poor electricity supply and double taxation. Pepple explained that the theme of the AGM; ‘Redeeming our Economic Potential through Manufacturing’, was necessitated by the fact that manufacturing had continued to be the key driver of rapid economic growth and the creation of employment. He expressed the need for the country to revamp its critical industries, saying, “If we ignore the role of manufacturing in Nigeria as a tool for redeeming our economic potential, such act will be at our own peril. “However, the role of manufacturing in stimulating employment, directly or indirectly, is complex and requires careful analysis. Manufacturing plays an irreplaceable role in driving growth and economic development.’’ Explaining that the solution to unemployment lies in manufacturing, Pepple urged government at all levels to always reach out to MAN when policies with direct bearing on the manufacturing sector and the economy were being designed.   Source: Investor King

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