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Income Tax Exemption for Small Companies in Nigeria and the Albatross of Incongruous Provisions in The Finance Act
0₦2,500.00Dr Cyril Obika HOD International Law & Jurisprudence, Faculty of Law, Enugu State University of Science & Technology, in his article, Income Tax Exemption for Small Companies in Nigeria and the Albatross of Incongruous Provisions in The Finance Act, examines the provisions of the Finance Act that exempt small companies from the payment of several taxes. He considers the definitions of a ‘small company’ in various tax laws, noting the differences in the threshold to qualification as a small company in these laws. Dr Obika argues that categorising a company as ‘small’ can only be determined at the end of a relevant assessment year and effected in the tax year. He opines that the status of a small company should be presumed for the same company in subsequent years until proven to the contrary that the company has exceeded the threshold set by legislation.
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Nigeria’s Finance Act 2019 and the Significant Economic Presence Concept: Prospects and Challenges
0₦2,500.00Dr Jude Odinkonigbo of Templars, and a Senior Lecturer at the Faculty of Law University of Nigeria, and Emmanuel Onyeabor of Banwo & Ighodalo, in their article, Nigeria’s Finance Act 2019 and the Significant Economic Presence Concept: Prospects and Challenges, note that the emergence of the digital economy has significantly disrupted the existing international tax rules regulating cross-border transactions. They examine how Nigeria has tried to solve this problem by enacting the Finance Act 2019, which introduced the ‘significant economic presence’ test, with the objectives of ensuring that corporate incomes generated from Nigeria’s digital space are liable to tax. They note Nigeria’s unilateral adoption of the OECD ‘Significant Economic Presence Test’ on the taxation of Non-Resident Companies (NRCs) in the Finance Act. They consider the prospects and challenges the country might have enforcing the taxation of NRCs operating in the country’s digital space, including the possibility of retaliatory measures by other countries. They conclude with suggestions on how to enforce the provisions of the Finance Act.
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Intra-Group Loan Under the 2020 OECD Guidelines: When the Arm’s Length Defies Accuracy in Measurement, We May Look for a Formula
0₦2,500.00Christopher Okafor, Managing Partner, Fairgate Solicitors, Legal Practitioners and Tax Advisory Port Harcourt, Nigeria, in his article, Intra-Group Loan Under the 2020 OECD Guidelines: When the Arm’s Length Defies Accuracy in Measurement, We May Look for a Formula, argues that the worry about intra-group loan transactions is its amenability to abuse by the transfer of the cost of fund to high tax jurisdiction and the consequent transfer of earnings from interests to low or nil tax jurisdiction. The abuse distorts economic realities, and the arm’s length approach to transfer pricing is seemingly unable to fit in transactions on intangible mobile assets. Though the Organization for Economic Cooperation and Development (OECD) has produced a new Guidance in 2020 to regulate intra-group loan, it is moot whether the guidance is a veritable answer to the mobility and fungibility of financial assets. Christopher proposes an alternative to the arm’s length principle. In his words, intragroup loan deserves a second look and a comparative analysis on the levers of arm’s length principle and formulary apportionment–an excursion from what is, arm’s length principle to what we think should be, formulary apportionment.
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The Unsafeness of the Safe Harbour Provisions Under the Nigerian Transfer Pricing Regime
0₦2,500.00Daniel Olika of Kenna Partners and Rahman Apalara of Aluko & Oyebode in their article, The Unsafeness of the Safe Harbour Provisions Under the Nigerian Transfer Pricing Regime, note that a significant threat to a comprehensive tax regime in Africa is the tax planning, especially transfer pricing, strategy of multinationals. Multinationals have deployed the strategy to erode the tax bases of the countries where they carry out business. One way multinationals do this is by creating artificial transactions between related parties which have no economic value. With the emergence of the Organisation of Economic Cooperation and Development’s Base and Erosion Profit Shifting (OECD BEPS) project, tax authorities across the continent have enacted Transfer Pricing Rules to ensure that transactions carried out between related parties are treated at arm’s length. To ensure that the administration of the Transfer Pricing Rules is not cumbersome, various safe harbour regimes have been created to ensure that if related party transactions are conducted, parties do not have to file various reports should the transactions fall within pre-defined guidelines for related-party transactions. Daniel and Rahman analyse the safe harbour regime in Nigeria by comparing its provisions with the recommendations from the OECD on adopting a safe harbour regime.
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The Fundamentals of Business Tax Planning Administration in Nigeria
0₦2,500.00Dr Ademola Taiwo, Dr Adeyinka Ilori, and Budoka Oyagigiri all of Babcock University Ilisan Remo Nigeria, in their article,The Fundamentals of Business Tax Planning Administration in Nigeria, posit that the mechanisms to curtail or reduce a taxpayer’s burden to the barest minimum by seizing the opportunities created in tax laws and utilizing the incentives and allowances are the main focus of tax planning. Dr Ademola Taiwo et al examine the concepts of tax avoidance, tax evasion and tax planning for business entities. They consider the theories of tax planning and management, the essence of tax management, and forms and incidents of tax planning in the Nigerian tax administration.
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A Review of the Key Amendments to the Companies Income Tax Act by The Finance Act 2019
0₦2,500.00Dr Cyril Obika, Partner J-K Gadzama LLP and Lecturer, Faculty of Law, Enugu State University of Science and Technology (ESUT) Agbani Nigeria, in his article, A Review of the Key Amendments to the Companies Income Tax Act by The Finance Act 2019 examines significant changes to the CITA by the Finance Act including the taxation of the digital economy and online business platforms, formal introduction of the Thin Capitalisation Rule, the removal of total tax exemption on interest, and changes to the Excess Dividend Tax Rule.
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Legality of the Privatization of Personal Income Tax Collection in Nigeria Appraised
0₦2,500.00Chizoba Okeke-Ogugua, Research Fellow at the Nigerian Institute of Advanced Legal Studies Abuja Nigeria in her article, Legality of the Privatization of Personal Income Tax Collection in Nigeria Appraised, argues that though outsourcing of tax collection, which was rampant in the 1990s due to governments bid to shore up internally generated revenue, had been banned, given the high incidence of tax evasion among taxpayers in the informal sector, there are immense benefits in outsourcing tax collection in order to boost government revenue generation aggressively; with a caveat that measures must be implemented to monitor and supervise the activities of tax consultants or collectors.
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Imposition of Fines by Taxing Authorities in Nigeria: An Overview
0₦2,500.00Olagoke Odubunmi, Manager, Tax Services, Maples & Temples, Lagos Nigeria in his article, Imposition of Fines by Taxing Authorities in Nigeria: An Overview makes a distinction between ‘administrative fines’, which can unilaterally be imposed by a taxing authority, and ‘criminal fines’ which can only be imposed by a court of competent jurisdiction. He considers the legal implication of taxing authorities imposing fines without jurisdiction and concludes with a review of judicial authorities on the powers of government agencies in the imposition of ‘criminal fines’.
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An Analysis of the Power of the FIRS to Assess Tax on Turnover: A Review of Theodak v FIRS
0₦2,500.00Dr Cyril Obika of the Faculty of Law, Enugu State University of Science & Technology, Enugu Nigeria in his article, An Analysis of the Power of the FIRS to Assess Tax on Turnover: A Review of Theodak v FIRS posits that ordinarily the FIRS, under section 9 of the Companies Income Tax Act 1961 as amended (CITA) charges to tax the profits of a company on its income> accruing in, derived from, brought into, or received in Nigeria. Exceptionally, under section 30 CITA the FIRS may charge a ‘fair and reasonable percentage’ of the turnover of a company to tax where there is no assessable profit or the profit is less than expected of such a business. Again, the FIRS under section 65 CITA may use its ‘best of judgment’ to assess tax where a company fails to file a return. Can the property of a company let to tenants be its turnover? Dr Obika examines the interrelation of sections 9, 30 and 65 of the CITA in his review of Theodak v FIRS.
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An Overview of the Assessment and Determination of Employee Tax in Nigeria
0₦2,500.00Eti Herbert, Legal Practitioner and Researcher in his article, An Overview of the Assessment and Determination of Employee Tax in Nigeria, examines the provision of the Personal Income Tax Act (PITA)and other relevant laws on the assessment and determination of employee tax in Nigeria; what is chargeable to tax; the implementation of the Pay-As-You-Earn (PAYE) system and, reliefs and deductions. He highlights inconsistencies and inadequacies in the provisions of PITA and other existing laws and recommends a review of the laws.
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The Single Contract Basis of International Corporate Taxation: A Review of Saipem v FIRS
0₦2,500.00Okanga Okanga, Associate at Streamsowers & Kohn in his article, The Single Contract Basis of International Corporate Taxation: A Review of Saipem v FIRS, examines the tax liability of nonresident companies in single contracts, otherwise known as turnkey projects. He reviews the Court of Appeal’s decision in Saipem v FIRS to the effect that where a turnkey contract is executed by multi-jurisdictional members of a consortium, in so far as the obligations of the individual members are related components of the same project, the entire contract will be taxable in Nigeria irrespective of where the obligations of each member of the consortium were discharged. Okanga advocates a more distilling approach, like in India, such that the substantive intent of the consortium participants, rather than description, will determine liability to tax.
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Curbing Tax Avoidance Arising from Voluntary Pension Contributions: A Critique of the 2017 LIRS and JTB’S Public Notices
0₦2,500.00Dr Olumide Obayemi of the University of Lagos in his article, Curbing Tax Avoidance Arising from Voluntary Pension Contributions: A Critique of the 2017 LIRS and JTB’S Public Notices, observes that in order to increase its revenue to fund massive budget deficits, the Nigerian governments have introduced measures to curb tax avoidance mechanisms. One of such measures by the Lagos Internal Revenue Service and the Joint Tax Board is the capping of voluntary pension contributions at 1/3 of employee’s salary and limiting withdrawals from the Retirement Savings Account. Obayemi comprehensively reviews the legality of the measure within the gamut of laws regulating pension of employees in Nigeria and advocates reforms that will enhance clarity over chaos.
