• Wednesday, July 24, 2024
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Reps approve 7.5% VAT, strip NIPOST duty to collect N50 stamp duties

As VAT rate of 7.5% commences

House of Representatives has approved the increase in the Value Added Tax (VAT) from 5% to 7.5% on services rendered in Nigeria, regardless whether a person is physically present or not, as well as services rendered within Nigeria or outside.

Read Also: Insights from the sectoral distribution of value added tax (VAT)

The House also stripped the Nigerian Postal Commission (NIPOST) of the responsibility of the collection of N50 Stamp Duties and transferred it to Federal Inland Revenue Service (FIRS).

These actions followed the consideration of the report on the Finance Bill with the long title of: “A Bill for an Act to Amend the Companies Income Tax Act, Value Added Tax Act, Customs and Excise Tariff etc. (Consolidation) Act, Personal Income Tax Act, Capital Gains Tax Act, Stamp Duties Act and Petroleum Profit Tax Act to Provide for the Review of Tax Provisions and make them more Responsive to Tax Reform; and for Related Matters”, presented by the chairman, House Committee on Finance James Faleke on Thursday during plenary.

The report stipulates that, the N50 one-off stamp duties, however, exempts all electronic receipt or transfer for money deposited in any bank or with any banker, on any type of account, to be accounted for amounting from N10,000 upwards, except that monies paid into one’s account or transferred electronically between accounts of the same owners by the owner within the same bank.

The bill provides that: “a taxable person who fails or refuses to register with FIRS within the time specified in the bill shall be liable to pay N50,000 fine for the first month, N25,000 for each subsequent month of default.

“Where a taxable person permanently ceased to carry on a trade or business in Nigeria, the taxable person shall notify the Service of its intention to deregister for tax purposes within 90 days of such cessation of the trade or business.

“A non-resident company is also under the obligation to be taxed on the invoice for the supply of taxable services while the person to whom the services are supplied in Nigeria shall withhold and remit tax directly to the Service in the currency of payment

The amendment to Customs and Excise Tariff, etc, (Consolidation), Act empowered Nigeria Customs to impose a duty on “goods manufactured in Nigeria and specified in the Fifth Schedule to this Act shall be charged with duties of Excise at the rate specified under the Duty Column.”

It also provides that goods imported and those manufactured in Nigeria shall be charged with duties of Excise at the specified rates in the Duty Column, in order to protect the local industries and make their prices competitive and avoid double taxation.