How will the Finance Bill of 2022 affect you?

How will the Finance Bill of 2022 affect you?

The presidency denied on Sunday that the 2022 Finance Bill, which is presently before the National Assembly, would make Taxpayers Identification Numbers (TIN) mandatory for bank account holders in Nigeria. According to a top Presidency source, there are no such provisions in the Finance Bill 2022 currently before the National Assembly requiring Nigerians to have a Tax ID number in order to operate a bank account.

According to a top House official involved in the bill’s drafting, the news reports are “completely inaccurate,” adding that “the bill has no such provisions for individuals.”
The new Bill imposes a fine of N10m or 5 years imprisonment, or both, on relevant officers who violate the rule to be liable to a penalty of N10m and/or 5 years imprisonment on conviction for failing to expose a person or agency of the Federal Government requiring tax investigation, enforcement, and compliance to the FIRS.
According to news reports that incorrectly cited the bill, “banks will be required to request for TIN before opening bank accounts for individuals, while existing account holders must provide their TIN to continue operating their accounts.”
According to the source, several other changes proposed under the bill, which will be defended further this week in both the Senate and the House of Representatives, show that capital gains tax at the rate of 5% is to apply on disposal of shares in a Nigerian company worth N500m or more in any 12 consecutive months, unless the proceeds are reinvested in the shares of any Nigerian company within the same year of assessment.
Partial reinvestment will be taxed proportionally. The transfer of shares in a regulated Security Lending Transaction is exempt.
The new Bill also provides that the Lottery and Gaming businesses, including betting, a game of chance, promotional competition, gambling, wagering, video poker, roulette, craps, bingo, slot or gaming machines, and the like, will be specifically taxable under the Company Income Tax Act (CITA).
According to a business sources, companies engaged in petroleum operations, including midstream and downstream operations, will not be eligible for profits on goods exported from Nigeria. Previously, downstream companies were eligible under the old Upstream and Downstream classification.
The Bill also states that the Federal Inland Revenue Service (FIRS) will be given the authority to assess CIT on the turnover of a foreign digital company involved in transmitting, emitting, or receiving signals, sounds, messages, images, or data of any kind, including e-commerce, app stores, and online advertisements.
The proposed Bill limits the capital allowance claimable on an asset to the portion used to generate taxable profits. Assets that are partially used to generate taxable income are eligible for pro-rata capital allowance, unless the proportion of non-taxable income exceeds 20% of the company’s total income.
If passed, the Bill will amend the Fiscal Responsibility Act to allow the government to borrow for “critical reforms with significant national implications.”
Currently, all levels of government can only borrow for capital expenditure and human development. Capital expenditure is defined as spending on a long-term asset that will last more than one fiscal year. There is no definition of human development or critical reforms.

ALSO, READ Nigerian banks have surpassed N34 trillion in customer deposits as a result of a forceful deposit drive.

Joshua Isibor

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