The Nigerian Senate yesterday passed the 2021 Finance Bill, which was forwarded to the National Assembly by President Muhammadu Buhari on December 7, 2021.
According to The Nation, the passage through the Red Chamber of the National Assembly follows the examination of a report by the Joint Committee on Finance of the Senate; Customs, excise and customs tariffs; Trade and investment.
One of the main highlights of the bill is the aspect that gives the Federal Inland Revenue Service (FIRS) the power to assess non-resident businesses like Twitter, Facebook, Google, and Netflix, among others.
They should be imposed on the fair and reasonable turnover generated by digital services to Nigerian customers.
The budget bill further directs the FIRS to appoint persons for the purposes of collecting and remitting taxes from non-residents.
In his presentation, Joint Committee Chairman Senator Solomon Adeola said the bill seeks to support the implementation of the 2022 Federal Economic Growth and Sustainability Budget by proposing key specific taxation, such as duties customs duties, tax charges and other relevant laws.
Adeola, representing Lagos West, said a total of 12 laws were amended under the finance bill which contained 39 clauses.
He said the bill aims to promote tax fairness, align national tax laws with global best practices, introduce tax incentives for infrastructure and the capital market, and support small businesses for ” increase government revenues.
âThe 2020 finance law was essentially based on the absence of new taxes and new incentives due to the impact of COVID -19 on the economy, as such, it was structured into four major thematic areas; Adopt countercyclical measures and crisis intervention initiatives; Reforms of taxation, fiscal responsibility and public procurement; Reform tax policies to encourage job creation; ensure closer coordination of monetary, trade and fiscal policies and improve tax administration, âsaid Adeola.
According to the committee, it has been recommended that a five percent capital gains tax be imposed on share transfer transactions when the gains exceed 250 million naira in 12 months.
He also recommended that gambling and lottery companies be taxable, as applied to oil and gas companies.
The bill underscored the need for intermediate and downstream oil and gas companies to be subject to corporate tax, without benefiting from tax exemptions for companies exporting goods to earn foreign exchange.
The bill also called for more powers from the Federal Inland Revenue Service (FIRS) to collect Nigerian Police Trust Fund (NPTF) levies from Nigerian businesses and to streamline the collection of taxes and levies from Nigerian businesses in accordance with the ease of the administration in making trade reforms.
The committee noted the need for the Nigerian government to ensure that FIRS deploys proprietary and third-party technology applications to collect information from taxpayers, strengthen confidentiality and non-disclosure, and enable them to investigate evasion. tax and other crimes and to sanction tax offenders.
The bill further empowers the FIRS to assess and tax non-resident businesses on a fair and reasonable turnover basis on revenues generated by digital services to Nigerian customers, with an additional mandate to appoint individuals. for the purposes of collecting and remitting taxes from non-residents.