In a show of commitment towards reducing the tax burden and improving the ease of doing business for taxpayers, the Federal Executive Council (FEC or the Council) has approved two Executive Orders and five Amendment Bills touching on key provisions in the Nigerian tax and regulatory legislation. This communication was released by the Minister of Finance, Mrs. Kemi Adeosun, after the Council meeting on Wednesday, 6 June 2018.
The approval follows recommendations of the National Tax Policy Implementation Committee (NTPIC or the Committee), set up in April 2017 to carry out reviews of tax laws and regulations in accordance with the revised National Tax Policy. The overall aim of the new Executive Orders and amendment bills is to improve the ease of doing business in Nigeria by simplifying tax payment which will increase government revenue and ultimately grow the economy.
The approved Executive Orders and Amendment bills are listed below:
|Executive Orders||Value Added Tax Act (Modification) Order|
|Review of Goods Liable to Excise Duties and Applicable Rates Order, 2017|
|Amendment Bills||Companies Income Tax Act (Amendment) Bill|
|Value Added Tax Act (Amendment Bill)|
|Customs, Excise, Tariff etc. (Consolidation) Act (Amendment) Bill|
|Personal Income Tax Act (Amendment) Bill|
|Industrial Development (Income Tax Relief) Act (Amendment) Bill|
By virtue of the provisions of the Value Added Tax Act (Modification) Order, residential property leases or rentals, transport services for use by general public and life insurance premiums are now exempt from Value Added Tax (VAT).
Also, the Review of Goods Liable to Excise Duties and Applicable Rates Order provides legislative backing to approved changes to the rates and bases for levying excise duties on alcoholic beverages and tobacco, amongst others. The changes were earlier communicated via a circular issued by the Minister of Finance, which became effective on 4 June 2018 (see link to our tax alert on this).
While the modifications contained in the two Executive Orders will take effect as communicated in the Orders, the Bills will not have the force of the law until they have been reviewed and enacted by the National Assembly. We therefore advise taxpayers and other stakeholders to review the proposed amendments in more details to ensure all relevant and crucial issues are raised before the Bills are enacted.
Click here for our earlier alert on major recommendations of the Committee in respect of the Bills/Orders. We will provide further analysis and thoughts on the changes made once a copy of the Orders and Bills become available.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.