The 2019 Finance Bill (now referred to as “the Bill”) which was presented to the Legislature by President Muhammadu Buhari along with the 2019 Budget seeks to introduce several amendments to various tax laws such as Companies Income Tax Act (CIT Act), Personal Income Tax Act (PIT Act), Value Added Tax Act (VAT Act), Capital Gains Tax Act (CGT Act), Stamp Duties Act (SDA) and Customs and Excise Duties Act (C&ED Act).
The Bill intends to actualize the following objectives:

  1. Promoting fiscal equity by mitigating instances of regressive taxation;
  2. Reforming domestic tax laws to align with global best practices;
  3. Introducing tax incentives for investments in Real Estate and Capital Markets;
  4. Supporting small businesses in line with the ongoing Ease of Doing Business Reforms and
  5. Raising revenues for Government, by various fiscal measures including a proposed increase in the rate of VAT from 5% to 7.5%.
    We will endeavour to critically look at the provisions of the said Bill with the aim to understand how it may affect local and foreign companies, and to discover if the Bill will achieve its strategic objectives.
    The primary consideration of the Bill was on the workings of CIT Act amending, inserting and deleting/repealing several of the provisions of CIT Act.1
    The Bill, under Section 2 amends Section 10 of CIT Act by adding a subsection (2) which makes it mandatory for all Banks to request for TIN of any company intending to operate a bank account or for continued operation of the bank account.2 Although, this has been the practice but giving it a statutory backing makes it possible to expand the Tax net in Nigeria so far as active corporate entities are concerned.
    Similarly, Banks are now mandated to get individuals TIN in opening an account or continuing operation of one. This basically widens the tax net of the federal government.
    Furthermore, the Bill tends to expand tax revenue sources by bringing to the fore digital services rendered by companies other than Nigerian company and create nexus for taxation of services rendered offshore by non-resident services4 thus:
    “The profits of a company other than a Nigeria company from any trade or business shall be deemed to be derived from Nigeria or otherwise be taxable in Nigeria:
    (c) if it transmits, emits or receives signals, sounds, messages, images or data of any kind by cable, radio, electromagnetic systems or any other electronic or wireless apparatus to Nigeria in respect of any activity, including electronic commerce, application store, high frequency trading, electronic data storage, online adverts, participative network platform, online payments and so on, to the extent that the company has significant economic presence in Nigeria and profit can be attributable to such activity.

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