Tax Bill 2024: Lawmakers List Conditions for Tinubu to Approve or Repeal Tax Exemption Order

• Only the president of the Federal Republic of Nigeria can approve tax exemption for any company or group of companies
• This is one of the components of the new Nigeria Tax Bill 2024, which has received approval from the House of Representatives
• The lawmakers, however, listed some conditions for the President to approve or repeal tax exemptions

Legit.ng journalist Ruth Okwumbu-Imafidon has over a decade of experience in business reporting across digital and mainstream media.

The President of the Federal Republic of Nigeria will have the power to grant or repeal tax exemptions for a company or group of companies.

This is part of the provisions approved by the Federal House of Representatives on Thursday, after a clause-by-clause consideration of the bill.

The bill also stipulates requirements for the president of the Federal Republic of Nigeria to grant income tax exemptions.

It reads;

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“The President may, subject to the approval of the National Assembly, by order exempt from income tax.”

It adds further that the tax exemption order from the president must include the ground(s) on which the said company or class of companies are being exempted from tax payments.

The bill also gives the president the power to amend or repeal any existing tax exemption for any company or group of companies, TheCable reports.

Tax Bill amends deadline for filing tax returns

The deadline for filing tax returns for closed companies was reduced from six to three months, while newly incorporated companies have to file their returns not later than six months after the first accounting period or within 18 months from incorporation.

For companies that have been in business for more than one and a half years, the filing of tax returns must be done no later than six months after the end of the accounting period.

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The lawmakers equally approved that the office of the tax Ombud and the Tax appeal tribunal will be funded through the Consolidated Revenue Fund, as may be appropriated by the National Assembly.

This grants both bodies financial stability and independence to operate autonomously.

Tax Bill includes N10 million penalty for VASPs

Virtual asset providers like Binance, Coinbase and others could have their licenses suspended and be penalized up to N10 million fines if they default under the Nigeria tax administration bill 2024.

This includes all entities that facilitate the exchange and transfer of virtual assets like cryptocurrencies and fiat currencies.

Recall that there is an existing operational guideline from the Central Bank of Nigeria, issued in December 2023, that permits financial institutions to provide virtual asset providers with banking services.

According to the Tax bill approved by the House of Representatives, any virtual asset provider that defaults on the provisions would face a N10 million administrative penalty in the first month and N1 million for every subsequent month.

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Tax bill retains VAT at 7.5%

In related news, the House of Representatives has retained the Value-added tax charges at 7.5%.

Section 146 of the Nigeria Tax Bill had proposed a phased increment of the Value-Added Tax (VAT) from the current 7.5 percent, first to 12.5% in 2026, and finally to 15% by 2030, but the lawmakers discarded this, retaining it at the current 7.5%.

The lawmakers also modified the VAT sharing formula so that the federal government gets 10%, the state governments get 55%, and the local government get 35%.

Source: Legit.ng