After the “Renewed Hope Budget”, Nigeria’s first quarter of 2024 stayed busy on the fiscal front. The Federal Government and its agencies kept working to increase revenue and ensure optimum tax compliance. These Q1 2024 tax updates for Nigeria fall into three themes.
- Incentives for growth: new incentives for oil and gas companies are driving a surge of investment in the petroleum industry. They form part of a broader strategy to stimulate economic growth in the sector.
- Simplifying tax compliance: the Federal Inland Revenue Service unveiled the TaxPro-Max self-registration portal to make tax registration and compliance more straightforward.
- Insights from the Tax Appeal Tribunal: key decisions and administrative actions by the tax authorities shaped Nigeria’s tax landscape in Q1 2024.
Judicial developments in the Q1 2024 tax updates
FBN Insurance Limited v. FIRS. On 1 March 2024, the Lagos zone of the Tax Appeal Tribunal (TAT) dismissed the insurer’s appeal against additional assessments for 2017 and 2018. The Tribunal held that section 16 of the Companies Income Tax Act (CITA) applies specifically to insurance companies. It found no conflict with section 19, which applies to all Nigerian companies. FIRS therefore rightly assessed the insurer under section 19, and it must pay ₦917,234,580.
Accion Microfinance Bank v. Anambra State Board of Internal Revenue. The Anambra State Internal Revenue Service issued demand notices totalling ₦36,000,000 for the bank’s alleged failure to file monthly returns of new customers from 2016 to 2021. The bank argued that section 49 of the Personal Income Tax Act imposes a penalty that only a criminal conviction can trigger. The TAT set aside the demand notices.
The newsletter also covers TAT rulings on FIRS’ power to treat a company’s undistributed profits as distributed, and on the relevant tax authority for itinerant workers.
Government policies in Q1 2024
- the Oil and Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order, 2024;
- the suspension of the Expatriate Employment Levy by the Federal Ministry of Interior;
- FIRS’ migration of transfer pricing and country-by-country filings to the TaxPro-Max platform, and its new self-registration module;
- the postponed VAT compliance guidelines for non-resident suppliers;
- FIRS and NEPZA tax compliance guidelines for export processing zones;
- a Customs and Joint Tax Board MoU and a 90-day window to regularise import duties on vehicles; and
- the President’s directive to implement a streamlined tax system.
Next, read our Q2 2024 Nigeria tax updates. To read the full Q1 newsletter, use the download button below.
