On 6 November 2019, the Finance Bill 2019 passed its second reading at the Senate. Main proposed amendments are given below:
- A lower (i.e. 20%) corporate income tax rate (CIT) applies for companies with turnover between NGN25-million and NGN100-million. However, businesses with a turnover below NGN25-million are to be exempted from CIT rate;
- Additional dividend other than profits are exempted from tax and franked investment income only to un-taxed distributions;
- Minimum tax provisions are amending to 0.5% of turnover;
- granting a bonus of 2% of tax payable to medium-sized companies and 1% to large companies for the early payment of companies income tax;
- introducing thin-capitalization requirements of an interest deduction is equivalent to 30% of EBITDA for loans received from non-resident associated parties, with any additional interest expense allowed to be carried forward up to five years;
- subjecting a deemed tax presence for non-residents with respect to imported technical and management services to a final withholding tax rate of 10%; and
- introducing an annual VAT registration threshold of NGN25-million.
