Under the ‘Renewed Hope Agenda’, the second quarter of 2024 brought progressive government policies and judicial interpretations on how Nigeria’s tax legislation operates. We saw first-hand the Federal Government’s commitment to lessening the tax burden on individuals and business owners, through public interactions and exposure sessions.
The government also issued significant circulars affecting the revenue of individuals and of businesses in the oil and gas and financial sectors. In this edition of our tax newsletter, we follow the steps that the relevant institutions have taken in their drive for viable tax reforms. We hope you find this Q2 2024 Nigeria tax update engaging and insightful.
Judicial developments in the Q2 2024 Nigeria tax updates
Popham Walter Odusote Limited v. Bayelsa State Board of Internal Revenue. The Bayelsa Board demanded ₦1,131,999,976 in PAYE for 2017 to 2020, saying the company had deployed over 60 personnel to the Agbami field. The company argued that its tax base was Lagos State. The Tax Appeal Tribunal (TAT) held the assessments invalid, because the Board failed to meet the twin conditions precedent: a request to render returns and the expiry of the waiting period. However, the Tribunal also found that the company had a business presence in Bayelsa. It ordered the company to give the Board information on the employees it deployed to Agbami and its PAYE payments.
Max-Tratrix Engineering Limited v. FIRS. The company had ₦6,036,764.51 in VAT deducted at source from a Delta State Government contract payment. When it filed its April 2022 VAT return on TaxPro-Max, it entered that sum in the wrong box, which created an apparent VAT liability. FIRS refused to correct the error, and the company appealed. The TAT considered the proper procedure for resolving filing errors on TaxPro-Max.
The newsletter also covers two more TAT rulings. In Baker Hughes Nigeria Limited v. Delta State Board of Internal Revenue Service, the TAT ruled that tax assessments must have a legal basis. In Bayelsa State Board of Internal Revenue v. M.I Nigeria Limited, it ruled that an assessment becomes final and conclusive if the taxpayer fails to respond in time.
Government policies in Q2 2024
- CBN circular on implementing, collecting and remitting the cybersecurity levy;
- CBN direction to banks to suspend charges on deposits until September 2024;
- FIRS circulars on the Midstream Capital and Gas Utilisation Investment Allowance, on gas tax credits and allowances for non-associated gas greenfield development, and on the tax treatment of foreign exchange transactions;
- the Deduction of Tax at Source (Withholding) Regulations 2024; and
- the Presidential Fiscal Policy and Tax Reform exposure impact assessment session.
For the next quarter, read our Nigeria tax updates for Q3 2024. To read the full Q2 newsletter, use the download button below.
