Tax and Business Info

  Tax Administration   FISCAL FEDERALISM AND THE NIGERIAN TAX ADMINISTRATION SYSTEM The system of fiscal federalism explains the system of revenue generation and revenue distribution within a federal system. It bothers on financial and functions and responsibilities of components units within a federal structure.   STRUCTURE AND TAXING RIGHT OF DIFFERENT LEVELS OF GOVERNMENT The provisions of Nigerian constitutions, for the purpose of taxation divided Nigeria into three constituents – the federal, state and local government. The federal government is responsible for the assessment and collection of taxes due from all taxable corporate bodies, residents of FCT, personnel of Nigerian armed forces and employees in Nigerian foreign missions. Each State governments is responsible for the assessment and collection of the taxes due from all taxable person’s residents in the states with the exception of the personnel of the Nigerian armed forces, employees of the Ni...

  When messages such as “only 13% of taxpayers are compliant” go out to the public consistently, taxpayers interpret this to mean “nobody is paying taxes”, I had better not pay taxes too. This behaviour has been proven based on empirical studies about the power of social proof. Paul is serious about changing jobs. He has interviewed with 7 potential employers in the last 5 months. None of them has called him back. Today, he is sitting across the table from Anne; potential employer number 8. Paul spends about 5 minutes of his 25 minute interview slot telling Anne how 6 out of his previous 7 interviewers did not call him back. You are Anne. How likely are you to recommend Paul for the job? Even if his resume and experience are impressive, you will have your doubts. You will keep thinking: the previous interviewers did not think Paul was good enough could be enough reason for you to reject him. When public officials are trying to get taxpayers to pay their taxes, they often make e...

Proem The Tax Appeal Tribunal, Lagos Zone (“TAT””), on September 10, 2020, decided in Ess-Ay Holdings Limited v Federal Inland Revenue Service[1] (the “Decision”) that the lease of real property (commercial or residential) and payment of rent thereof, does not fall within the ambit of supply of goods or services for Value Added Tax (“VAT”) purposes.  The TAT also pronounced that information circulars issued by the Federal Inland Revenue Service (“FIRS”), are mere tools for administrative information to the general public. The TAT concluded that information circulars issued by the FIRS are not subsidiary legislation, and as such, do not have the force of law, and shall be construed and deemed to be null and void to the extent of their inconsistency with any existing law.   It was also hinted that the power of the Minister of Finance (the “Minister”), under section 38 of the VAT Act, to amend the list of items exempt from VAT under the First Schedule thereof; offends a...

On August 7, 2020, President Muhammadu Buhari assented to the Companies and Allied Maters Act, 2020 (“CAMA 2020”), which repeals and replaces the Companies and Allied Matters Act, 1990[1] (the “Repealed Act”).  As noted in our earlier Newsletter[2] which highlighted critical changes sought to be introduced by the new regime, shortly after the repeal and re-enactment bill was first passed by the National Assembly, this CAMA 2020 is undeniably a progressive development in the Nigerian business and economic landscape and a big boost to the Ease-of-Doing-Business (EoDB) campaign of the Government.  CAMA 2020 provides a robust framework for reforming identified onerous legal, regulatory and administrative bottlenecks which, for three decades, have made doing business in Nigeria substantially difficult (particularly for Micro, Small and Medium Enterprises (MSMEs)), and impeded investments into Nigeria.  In this article, we highlight key provisions in CAMA 2020 and their impact ...