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Legislative bills

National Assembly Passes Finance Bill 2021

Strategic Insights

— 2 min read

The National Assembly has passed the Finance Bill 2021, proposed by President Muhammadu Buhari, which aims to make significant changes to various taxation laws in Nigeria. The bill, which was transmitted to the National Assembly on December 7, 2021, proposes updates to 12 different Acts, including the Capital Gains Tax Act, Companies Income Tax Act, and Personal Income Tax Act. The bill seeks to promote fiscal equity, align domestic tax laws with global best practices, introduce tax incentives for infrastructure and capital markets, and support small businesses.

Key Takeaways:

  • The Finance Bill 2021 proposes to amend 12 different Acts, including the Capital Gains Tax Act, Companies Income Tax Act, and Personal Income Tax Act.
  • The bill seeks to promote fiscal equity, align domestic tax laws with global best practices, and introduce tax incentives for infrastructure and capital markets.
  • The Joint Committee on Finance; Customs, Excise and Tariff; Trade and Investment recommended a 5% Capital Gains Tax on shares' disposal transactions where gains exceed N250m in 12 calendar months.
  • The Committee also advocated for Gaming and Lottery Companies to be taxable, as well as Oil and Gas Companies.
  • The federal government will ensure that the Federal Inland Revenue Service (FIRS) has more powers to collect tax levies on Nigerian Companies on behalf of the fund.
  • The FIRS will be empowered to assess Non-Resident Firms to tax on a fair and reasonable turnover basis on Turnover earned from digital services to Nigerian customers.
  • The Committee pushed for close monitoring of unfolding development and policies on VAT, Tax Incentives, Projected increase Tariff on Tobacco, Alcohol and Carbonated drinks to fund vital expenditure on Health, Education and Security.
  • The National Assembly will also consider the possibility of introducing new taxes, tariffs and levies as the economy recovers.

Statistics:

  • 12 different Acts are proposed for amendment in the Finance Bill 2021.
  • The bill seeks to make significant changes to the Capital Gains Tax Act, Companies Income Tax Act, and Personal Income Tax Act.
  • 39 clauses are contained in the bill.
  • 5% Capital Gains Tax is proposed on shares' disposal transactions where gains exceed N250m in 12 calendar months.
  • The Joint Committee on Finance; Customs, Excise and Tariff; Trade and Investment recommended that Gaming and Lottery Companies and Oil and Gas Companies be taxable.
  • N250m is the threshold for Capital Gains Tax on shares' disposal transactions.

Sources:

  • THEWILL: National Assembly passes Finance Bill 2021
  • President Muhammadu Buhari: Finance Bill 2021
  • Senator Olamilekan Adeola: Report on a Bill for an Act to Amend the Capital Gains Tax Act, Companies Income Tax Act, Federal Inland Revenue Service (Establishment) Act, Personal Income Tax Act, Stamp Duties Act, Tertiary Education Trust Fund (Establishment) Act, Value Added Tax Act, Insurance Act, Nigerian Police Trust Fund (Establishment) Act, National Agency for Science and Engineering Infrastructure Act, Finance Control and management Act, Fiscal responsibility Act; and for Related Matters.

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