In May 2020, the Minister of Finance, Budget, and National Planning released the Value Added Tax (Modification) Order 2020 or Order. The Order contained comprehensive details of the items that are exempt from Value Added Tax (VAT). Section 38 of the VAT, Cap. V1, LFN, 2004 (as amended) gives the Minister of Finance the authority…
The Federal Government (FG) has inaugurated an Inter-Ministerial Committee for the Audit and Recovery of Back-Years Stamp Duties. FG also launched the Federal Inland Revenue Service (FIRS) Adhesive Stamp. Both events took place on 30 June 2020. Members of the Committee are persons from the Central Bank of Nigeria (CBN), Federal Ministry of Justice, FIRS,…
After the tax authority conducts an audit on business records, the next step is usually a tax audit reconciliation meeting. The purpose is to resolve any outstanding tax issues in a physical visit to the tax office. However, the COVID-19 impact has reduced the need for a face-to-face meeting, and tax authorities are gradually embracing…
May 2020 had the highest number of tax events compared to other months in the year. While the economy was opening after the post-COVID 19, the government was releasing several tax updates. The tax news came from tax authorities, Finance Minister, and President. Last month was the busiest in the Nigerian tax space for 2020….
Once upon a time, new companies in Nigeria paid taxes twice on the same profits. This unique tax provision, known as the commencement rule, applied to only new businesses in the first three years of operation. The three years of assessment will have two overlapping basis periods as below. 1st year – Date of commencement…
Introduction Physical presence in traditional service delivery is easy to monitor. Under this system, a tax authority can determine whether a non-resident person is taxable in a country based on factors such as fixed base, turnkey project, and dependent agent. Fairly straight-forward. All went well until the digital era jumped into the spotlight. If there…
Federal Inland Revenue Service (FIRS) will resume field audit, investigation, and monitoring exercises. The Federal tax authority suspended field reviews in April 2020 due to low business activities during the COVID-19 pandemic. As the Federal Government has given businesses the go-ahead to resume full operations, FIRS will be able to generate more fiscal revenue for…
Federal Inland Revenue Service (FIRS) extends the time for tax defaulters to enjoy penalty and interest waiver by one month. To enjoy the waiver of penalties and interests, a taxpayer must liquidate the outstanding tax liabilities on or before 30 June 2020. The waiver covers tax liabilities on; self-assessment filing, tax audit, investigation, and desk…
When a person supplies taxable goods and services, the value added tax rate in Nigeria is 7.5% except for zero-rated and exempt items. The Finance Act 2019 contains changes to several provisions of the VAT Act, including exempt items in the First Schedule. Effective 3 February 2020, the Finance Minister has issued the Value Added…
Nigerian tax system took a giant stride in 2020. Effective 13 January 2020, the Finance Act 2019 introduced significant changes to seven tax laws. It is the first move since Nigeria became a democratic state in 1999. Taxpayers also looked up to the tax authority for guidance on the administration of the new laws. Consequently,…