On 28 May 2023, the immediate past President, Muhammadu Buhari signed the Finance Bill-2023 into law as Finance Act, 2023(“the Act”). The act includes the following tax measures related to corporate taxation:
- “Digital assets” have been specifically included as taxable assets and are thus considered “property” to which the provisions of the CGTA would apply. Accordingly, all profits from the sale of bitcoins and other cryptocurrencies are now taxable under the CGTA.
- Businesses will no longer exercise investment allowance incentive purchased after Finance Act-2023 came into effect. Previously, companies investing in qualified plant and equipment were entitled to a 10% one-off investment allowance claim.
- Businesses making qualifying capital expenditures after Finance act 2023 came into effect will no longer be eligible for the Rural Investment Allowance.
- The previous tax exemption for hotels on foreign exchange earnings from tourists placed in a reserve fund for expansion purposes has now been removed.
- After Finance Act-2023 comes into effect, companies will no longer receive investment grants for plant and equipment purchased under a lease agreement. However, companies can claim an investment grant for leased plant and equipment purchased on or before the effective date of FA23.
- Non-Resident Companies (NRCs) that make profits from shipping or air transportation in Nigeria and do not provide separate financial reports on their Nigerian operations are now expected to provide a detailed gross sales statement of their Nigerian operations. The declaration must be certified by the company’s external auditor and at least one of its directors and must be accompanied by all invoices issued to its customers.
- In addition to the agricultural and manufacturing businesses, companies involved in the upstream and midstream gas businesses now also enjoy unrestricted capital grant entitlements.
The Finance Act 2023 shall come into effect on 1 May 2023 or such other date as may be determined by the National Assembly or by the President of the Federal Republic of Nigeria by consent or order.
