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5 Key Changes To Nigeria’s Tax Law You Must Know by BounceNigeria: 10:47am On Nov 10, 2017
As you may know, Nigeria’s tax law as regards the Personal Income Tax Act (PITA) has been amended.

The need for the change became glaring as provisions of the 2004 Act are archaic and do not meet the requirements of modern tax administration.

Here are 6 key updates you need to be aware of, to stay aware from the taxman’s hammer.

1. Tax Identification Number & Tax Clearance Certificate Are Prerequisite To Transact With Govt

If you have any dealings with the government, you must now keep handy your tax identification number, TIN and tax clearance certificates, TCC.

You can read more about how to obtain TIN here and TCC here

The new law requires Ministries, Departments and Agencies, MDAs, and banks to demand TCCs - and by extension a TIN - in respect of certain transactions.

A TIN must be quoted on every TCC issued by a tax authority. There is a penalty of 5 million naira or imprisonment or both upon conviction for any defaulting authority.


2. Nobody Is Exempted From Paying Tax

You see, in the previous law, some people including the President, Vice President and all other political office holders were exempted from paying taxes. They must now do so.

3. Insurance, Pension Make Up Major Part of Tax Deductible Income

The new law provides more opportunities for people to reduce their tax burden.

As a matter of fact, “taxpayers can take advantage of these allowable deductions as there is no ceiling to the amount an income earner can contribute.

"It can be used as a tax avoidance scheme to the detriment of tax authorities,” said the Joint Tax Board in a note explaining the new changes obtained from it website."

The new act provides for the following as tax deductible income: National Housing Fund Contribution, National Health Insurance Scheme, Life Assurance Premium, National Pension Scheme and gratuities.


4. Statutory Reliefs Have Been Increased

In the old Act, 5,000 naira plus 20% of earned income was the statutory relief.

This has been replaced with a Consolidated Relief Allowance (CRA) to be computed as the higher of 200,000 naira or 1% gross income plus 20% gross income.

The CRA has also substituted the previous relief allowances.

These include: Housing allowances (N150, 000), transport allowance (N20, 000), entertainment (N6, 000), children allowance (N5, 000) etc.

In the new regime, the consolidated relief allowance has replaced all that.

5. You Will Pay Tax For Benefit-In-Kind

A benefit-in-kind is any non-cash benefit of monetary value that employees have access to.

They include such benefits as official accommodation, subsidized transport and meals.

Since these benefits have monetary value, they must now be treated as taxable income.

The new PITA provides that Benefit-in-Kind (BIK) is to be considered in determining an employee's gross emolument for consolidated relief allowance.

The import of this provision, according to the Joint Tax Board, “is that Political Office Holders with a retinue of domestic staff, official cars and occupying official quarters, for instance, will have to pay taxes in respect of these benefits”.

Source: http://news.bounce.ng/Content/bouncetaxthursday-5-key-changes-to-nigerias-tax-law-you-must-know-20171110

cc: lalasticlala, r231, freiburger

Re: 5 Key Changes To Nigeria’s Tax Law You Must Know by pappy4real(m): 1:19pm On Nov 10, 2017
and some clueless law makers would squander taxpayer money

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