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Nigeria’s Finance Act 2023

MORE parting tax changes by the last administration have emerged. The former President, Muhammadu Buhari signed the Finance Bill 2023 into law on 28 May 2023, the eve of his last day in office with an effective day of 1 May 2023. Below are the top changes:

1. Taxation of gains on the disposal of digital assets including cryptocurrency at the rate of 10%.

2. Deduction of capital losses on assets for capital gains tax purposes, may be carried forward for a maximum of 5 years.

3. Rollover relief on sale of shares is subject to reinvestment of the proceeds within the same year of assessment.

4. Deletion of investment allowance on plant and equipment.

5. Imposition of 0.5% levy on goods imported into Nigeria from outside Africa.

6. All services including telecommunication services are liable to excise tax at rates to be prescribed by the President.

7. Tax deduction restored for premium paid in respect of insurance on own life and spouse.

8. Sharing of Electronic Money Transfer (EMT) levy 15% to Federal Government, 50% to State Governments and 35% to Local Governments.

9. Application of transfer pricing rules to VAT on transactions between connected persons considered to be artificial or fictitious.

10. Companies appointed to withhold VAT at source are to remit such VAT to the FIRS on or before the 14th day of the following month.

11. VAT on goods purchased via electronic or digital platforms from a nonresident supplier appointed as an agent of the FIRS to be chargeable to VAT and paid by the importer unless the proof of appointment and registration with FIRS is provided.

12. Redefinition of building for VAT purposes to exclude any structure not permanently affixed to land for all or most of its useful life.

13. Increase in Tertiary Education Tax rate from 2.5% to 3% of assessable profits.

 14. Establishment of a Governing Council, Executive Board, and a Management Team for the Ministry of Finance Incorporated.

15. The Finance Act 2023 was signed into law on 28 May 2023 but the effective date is stated as 1 May 2023.

*Oyedele can be reached at @taiwooyedele

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