The Federal Inland Revenue Service (FIRS) has published a public notice on 11^th November 2016, which was issued by the Finance Ministry on the stakeholders’ forum. This forum had been convened from 7^th to 8^th November 2016 to discuss the draft revised National Tax Policy Document (NTP). Additionally, the draft revised NTP, a list of proposed changes to various provisions of the extant tax laws had been submitted to the Minister of Finance on 29 September 2016 for consideration. The list of proposed changes to the extant tax laws to be made by the Finance Ministry and the National Assembly include the following, inter alia:

Company income tax

• Sanctioning specific legislation on the taxation of real estate investment trusts;
• Arranging the requirement to get approval from the National Office for Technology Acquisition and Promotion along with the transfer pricing (TP) regulations in accordance with the deductibility of certain expenses.
• Cancelling the requirement to obtain ministerial or FIRS approval for the deduction of management expenses, expenses experienced outside Nigeria and for other expenses.
• Issuing guidance on the treatment of pre-incorporation expenses;
• Providing appropriate rates for the claim of capital allowances on ships, aircrafts and intangible assets.
• Establishing a preferential regime for holding companies to deal with intra-group transactions.
• Removing the rules, which apply on commencement and cessation of business and on a change of accounting date.
• Modifying the rules and applicable rates for minimum tax computation;
• Issuing guidance in respect of the insurance companies’ tax;
• Giving group tax loos relief facilities.

Withholding tax (WHT)

• Providing transparency on the applicable WHT rates to various payments in line with the economic circumstances of taxpayers.
• Issuing guidance on the WHT credit offset on franked investment income.

Stamp duties

• Cancelling and re-enacting the Stamp Duties Act to amend identified gaps.
• Clarifying the Stamp Duties Act’s applicability to instruments and transactions.

Capital gains tax

• Authorizing the capital loss deduction from the corresponding capital gains.
• Relieving transfers and disposals of assets within a group from CGT.

Value added tax (VAT)

• Cancelling and re-enacting the VAT Act in line with global best practices.
• Amending identified gaps in the execution and operation of the VAT system.

Pioneer incentive scheme

Evaluating the pioneer incentive scheme with a view to increased efficiency by:

• Executing a cost-benefit analysis to confirm that the pioneer incentive scheme in its current state results in a net benefit for the government;
• updating the existing list of pioneer products according to the prevailing economic circumstances;
• giving instructions on the taxation of incidental income not covered by the pioneer incentive;
• issuing guidance on the pre-pioneer loss treatment and capital allowances in the post pioneer time.

Petroleum profits tax

• Clarifying the definition of income incidental to petroleum operations.
• Giving an income tax rate for gas projects carried out under a production sharing contract.
• Clarifying the taxability of gas projects.
• Eliminating the restriction on the capital allowance amount claimable in a year of assessment.

General anti-avoidance rules (GAAR)

• Requiring the tax authorities to uniformly conform to the TP Regulations in the determination of the “arm’s length” price of transactions between related parties.
• Changing the GAAR on the taxation of excess dividends.

Administration

• Giving clarity on the computation of interest and penalties on unpaid taxes.
• Certifying that interest charges reflect prevailing commercial rates.
• Permitting the Tax Appeal Tribunal to decide the applicability of interest and penalties on unpaid taxes.
• Providing for the calculation of interest on tax refunds.