1. Obtain general understanding of the legal and regulatory framework applicable to the entity and the industry, and how the entity is complying with the framework.
Use the auditor’s existing understanding of the industry.
Update the auditor’s understanding of the laws and regulations that directly determine reported amounts and disclosures in the financial statements.
Enquire of management on laws and regulations that may have fundamental effect on the entity’s operations.
Enquire of management on the entity’s policies and procedures regarding compliance laws and regulations.
Enquire of management on policies or procedures adopted for identifying, evaluating and accounting for litigation claims.

2. Inquire of management and those charged with governance as to whether and how the entity is in compliance with such laws and regulations.

3. Verify compliance by reviewing correspondence with the appropriate licensing or regulatory agencies.

4. Remain alert to the possibility that other audit procedures applied may bring instances of non-compliance to the auditor’s attention.

5. Obtain written representation from the directors that they have disclosed to the auditors on all events of which they are aware, which involve possible non-compliance with the actual or contingent consequences that may arise from such non-compliance.


1.) Inquire with management about penalties to be imposed.
2.) Inspect correspondence with regulatory authorities to identify the consequences.
3.) Inspect board minutes for management discussions on actions to be taken regarding the non-compliance.
4.) Inquire with the company’s legal department on the possible impact of the non-compliance.


1.) The auditor must understand the nature of the act and the situations in which it has occurred.

2.) Obtain further information to evaluate the possible effect on the financial statements.


1.) The auditor should communicate non -compliance with management except prohibited by law ISA 250.

2.) If the auditor believes the non-compliance is intentional and material,the matter must be communicated with those charged with governance.

3.) If auditor suspects those charged with governance are involved, it must be communicated to the audit- committee or supervisory board.

4.) If non-compliance has a material effect on the financial statement, a qualified or adverse opinion must be issued.

5.) The auditor must consider if they have legal, regulatory or ethical responsibilities to report non-compliance to third parties like regulatory authorities.


Reasons why external auditor could withdraw audit engagement that is, resign as auditor are: If

1.) Management or directors do not take remedial action that the auditor considers inappropriate or
2.) Non-compliance arouse doubt about the integrity of management or those charged with governance.

Ethical requirements may require a predecessor auditor to provide information on compliance to an incoming auditor.


An external audit is an independent assessment of an organization’s financial statements, accounting records, and internal controls conducted by an external auditor who is not an employee of the organization.

The primary objective of an external audit is to assurestakeholders, such as investors, lenders, and regulators, that the financial statements are free from material misstatements, errors, or fraud, and that they are presented by generally accepted accounting principles (GAAP) or international financial reporting standards (IFRS).

The execution of the audit assignment is predicated on three tripods; Audit plan, Audit procedures and Audit programme.

An audit plan is the first step of an audit which details the phases or steps with the timing and manpower requirement of the audit exercise from commencement to conclusion. It is aimed at providing the schedule of resource allocations and cost implication of the exercise.

Audit procedures refer to the steps undertaken by an auditor to achieve the specific objectives of an audit when conducting the fieldwork phase of the audit. These objectives include ensuring the organization’s risks are identified and managed effectively, ensuring that employees comply with the organization’s regulations and policies and that the assets of an organization are acquired properly and used efficiently.

An audit programme is a detailed written statement highlighting the work to be accomplished, the audit tests and procedures to be followed, the persons responsible for the accomplishment of the work, and the time within which the work is to be accomplished.

During an external audit, the auditor will examine the organization’s financial records, including its income statement, balance sheet, cash flow statement, and any accompanying notes to these financial statements. The auditor will also evaluate the organization’s internal controls, such as its processes and procedures for financial reporting and compliance with relevant laws and regulations.

Once the audit is completed, the auditor will issue an audit report that expresses an opinion on the fairness of the financial statements and the effectiveness of the organization’s internal controls. This audit report is an important tool for stakeholders to assess the organization’s financial health and performance, and to make informed decisions about investing, lending, or regulating the organization.

The primary purpose of an external audit is to provide an independent assessment of the organization’s financial statements, internal controls, and compliance with applicable laws and regulations.

Corporate governance refers to the system of rules, practices, and processes by which a company is directed and controlled. It encompasses the relationships among the board of directors, management, shareholders, and other stakeholders and sets out the framework for the company’s decision-making and operations.

The primary objective of corporate governance is to ensure that the company is managed in the best interests of all stakeholders and that it operates responsibly and ethically. This includes ensuring transparency and accountability, promoting ethical behaviour and corporate social responsibility, managing risks effectively, and maintaining compliance with applicable laws and regulations.

Good corporate governance is essential for building trust with stakeholders and maintaining the company’s reputation. It can help to attract investment, enhance shareholder value, and reduce the risk of legal and financial penalties.

Some of the key components of corporate governance include:

1.Board of directors: The board of directors is responsible for overseeing the company’s management and making strategic decisions.

2.Management: The management team is responsible for executing the company’s strategy and managing its operations.

3.Shareholders: Shareholders have a vested interest in the company’s performance and governance and have the right to vote on major decisions.

4.Ethics and corporate social responsibility: Companies are expected to operate in an ethical and socially responsible manner, taking into account the impact of their operations on the environment and society.

5.Risk management: Companies are expected to identify and manage risks effectively to protect their stakeholders and the business itself.

Here are some ways in which an external audit can impact corporate governance:

1.Increased transparency: External audits promote transparency by providing an objective view of the organization’s financial statements and internal controls. This can enhance the organization’s reputation and increase stakeholders’ confidence in its operations.

2.Improved accountability: External audits can help to identify weaknesses in the organization’s internal controls and provide recommendations for improvement. This can increase the organization’s accountability to its stakeholders, including shareholders, customers, and employees.

3.Compliance with regulations: External audits can ensure that the organization is complying with applicable laws and regulations. This can help to reduce the risk of legal and financial penalties, as well as reputational damage.

4.Identification of risks: External audits can identify potential risks and vulnerabilities in the organization’s operations, which can help the organization to take proactive measures to mitigate those risks.

5.Enhanced decision-making: External audits can provide valuable information and insights to the organization’s management team and board of directors, which can inform strategic decision-making.

Overall, external audits play a crucial role in ensuring that an organization’s financial statements are accurate, reliable, and compliant with applicable regulations. This can help to promote good corporate governance and increase stakeholders’ trust in the organization.


The objective of pension is to provide post-retirement monetary benefits for employees. In an ideal organization, an employer offers a pension plan to each employee by setting aside a certain amount from their gross income, and that money grows over the years.Often, the employee has the choice of taking either a lump sum on retirement or access only 25% of the funds when leaving the company before retirement (usually four months of being unemployed) or may be inheritable by a surviving spouse or children.

Prior to the enactment of the Pension Reform Act2004, Nigeria operated a system known as the Defined Benefit Pension Scheme. The scheme was referred to as Pay As You Go (PAYG) and it was poorly funded, non-contributory and mainly dependent on budgetary allocations. Under this Scheme, the amount an employee is paid as pension is majorly dependent on the number of years of service and grade level at retirement. It was primarily operational in the public sector with minimal compliance from the private sector due to poor structural frameworks and regulatory institutions. Given this circumstance, the government was faced with the predicament of massive pension debts that had accumulated over time, and only fewindividuals were able to access the pension funds afteryears of waiting and spending hours on a long queue.

Under the PRA 2004, only judicial officers were exempted from the Pension Contribution Scheme. However, this was amended by the Pension Reform (Amendment) Act 2011 that included members of the Armed Forces, the intelligence and secret services of the Federation under Section 217 of the Constitution. In accordance with the PRA 2004, both the employer and the employee must contribute a minimum of 7.5 percent of their combined monthly emoluments, and in cases where the employer assumes entire responsibility for the contributions, it shall be liable to contribute not less than 15 percent.

On July 1,2014, President Jonathan signed the Pension Reform Act 2014. The Act was enacted to replace the 2004 Act in a bid to regulate the administration of the uniform contributory pension scheme for both the public and private sectors in Nigeria thereby ensuring easy access to retirement benefits as and when due. Under Section 4(1) of the PRA 2014, an employer is under obligation to contribute a minimum of 10 percent, while the employee is entitled to contribute at least 8 percent of his monthly emolument. Where, however, the employer wishes to bear full responsibility of the Scheme, it shall contribute not less than 20 percent of the employee’s monthly emoluments.

An employer is under a duty and subject to guidelines issued by Pension Commission to request a Pension Fund Administrator to open a nominal Retirement Savings Account where an employee fails to open one within a period of six months after assumption of duty under Section 11(5) of the PRA 2014. In addition, every employer is expected to maintain a Group Life Insurance in favor of each employee for a minimum of three times the employee’s annual total emoluments.

Under Section 5(1) of the PRA 2014, the categories of persons mentioned in section 291 of the Constitution of the Federal Republic of Nigeria 1999 as well as members of the Armed forces, the intelligence and secret services of the Federation are exempt from the contributory pension scheme.

Conclusively, pensions revolve around the retirement benefits of an employee. The PRA 2014 undoubtedly offers numerous benefits to employees as they are the bedrock of pensions. However, the purpose of this Act may be defeated if not properly enforced, especially in the private sector. After retirement, aged individuals may resort to being entirely dependent on their offspring’s and as a result be a burden to them while others may be subject to abject poverty.


Withholding Tax is basically an advance payment of income tax. It is an advance payment to be applied as tax credit to settle the income tax liability of the years of assessments to which the income that suffered the deduction relates. There are varying rates of WHT ranging from 2.5% to 10% for companies and 5% to 10% for individuals depending on the transaction.

The introduction of the WHT regime came about in order to address the problem of tax evasion although, there is the overriding objective of full disclosure, transparency, predictability and fairness.

The Companies Income Tax Act and the Personal Income Tax Act provides for withholding of tax from payments due to companies or individuals whether resident in Nigeria or not, that provides goods and services to individuals or companies in Nigeria.

Key Points:

1. The period for filing WHT is 21 days after the duty to deduct arose for deductions from companies.

2. Companies filing monthly WHT returns are required to submit, in electronic form, a schedule of all their suppliers for the month showing the tax identification number (TIN), address of the suppliers, the nature of the transaction, WHT deducted, and invoice number.

3. The rates of withholding tax in Nigeria varies among individuals, companies, and corporate bodies. It can be 2. 5%, 5% or 10% depending on the type of transaction and the tax authority responsible for the collection of the tax (Federal Inland Revenue Service or State Inland Revenue Service).

4. The penalty for failure to deduct or remit tax will result in 10% of the amount, either not deducted or remitted.

5. WHT for individual & partnerships are remitted to the State Internal Revenue Service, while WHT for companies are remitted to the Federal Inland Revenue Service (FIRS).

It is imperative for companies to submit in electronic form a schedule of all their suppliers for the month showing the tax identification number (TIN), address of the suppliers, the nature of the transaction, WHT deducted, and invoice number.

Relevant Documents Required for Filing Withholding Tax Returns

1. Evidence of payments to an authorized banks – e-ticket.
2. Schedule of WHT deducted showing:
Period covered.
Name of supplier.
Nature of supply.
Gross amount.
WHT rate.
WHT amount.
TIN of agent making remittance.
TIN of beneficiary (taxpayer).

Withholding Tax Coverage

The withholding tax (WHT) deduction covers the following transactions or areas:

All aspect of the building, construction, and related services.
All types of contracts and agency arrangement, other than outright sale and purchase of goods and property in the ordinary course of business.
Consultancy, Technical and Professional services
Management services
Interest and Royalty

Types of payment

WHT for companies (%)

WHT for individuals (%)

Dividends, interest, and rents



Directors’ fees



Hire of equipment






Commission, consultancy, technical, service fees



Management fees



Construction (roads, buildings, and bridges)



Contracts other than sales in the ordinary course of business



Income Subject to Withholding Tax

The WHT provisions seek to collect taxes that may otherwise have been lost through evasion and/or avoidance. The aim is to ensure that taxpayersare correctly taxed but it must be understood that transactions that are ordinarily not liable to tax in Nigeria are also not liable to WHT.

The residence of the taxpayer is generally not relevant for the purpose of determining liability to tax or the application of WHT, but it is important to consider whether the provider/supplier of the goods or services is liable to Nigerian tax.

The FIRS provides direct explanations in respect of incomes that are and not liable for WHT, which are explained below.

1.Rents: This includes rental income on both real and personal property. As a general rule, income on a property (rent, hire or lease payments or rights (royalties) situated in Nigeria is liable to tax in Nigeria, the place of payment notwithstanding. Where a person rents or hires property/services from another, WHT at the rate of 10% will apply. But where a person provides services to another for e.g. air/land transport service, using its own equipment/facilities, the transaction becomes a contract of services rather than rental or hire.

2. Interest: This is income from investments of every kind. WHT is applicable to income from government securities and income from bonds or Treasury bills. Interest on loans paid by a Nigerian company is often not subject to WHT.

3. Dividends: Refer to income from shares. The income is subject to tax whether it is received by a Nigeria company or a non-resident company. The tax imposed is regarded as a final tax, but corporate bodies are allowed to recoup WHT deduction where the dividend is to be redistributed as Franked Investment Income (FII). The Petroleum Profit Tax Act (PPTA) however exempts dividends payable by oil-producing companies on petroleum operations from WHT imposition.

4. Royalty: This refers to unearned income which accrues to the owner from past endeavors. Permission must be obtained before it can be used. It is the payment of any kind as a consideration for the use of or the right to use any patent, trademark or right.

5. Consultancy/Professional/Management/Technical Services: These are specialized services rendered by persons with the required knowledge and skills. The mere fact that services are provided by a company which has consultancy as part of its name does not by itself render such service as consultancy. The real content of the services being provided must be examined and if it amounts to a consultancy service, then the appropriate rate would apply; the same treatment applies to Professional/Management services. For instance, if an engineering company is carrying out construction activity, the proper classification for the services would be ‘‘construction’’ as opposed to Professional/Technical services; similarly, the use of industrial machinery/equipment to provide a service does not render it to be ‘‘Technical’’ because the industry position requires that only arrangements that involve a transfer of Technology should be classified as technical.

6. All aspects of Building, Construction and Related Activities: Under this heading are all types of construction contracts, including laying of pipelines, maintenance activities and service charges. Drilling and related activities properly fall under this classification.

7. All types of Contract Activities and Arrangements, other than Outright sale and Purchase of Goods and Property.

8.Where there is a dual relationship between parties in a business transition.  An example of this contract is where a manufacturer/ producer requires raw materials from a supplier for its production. This is a dual relationship between both parties and the transaction will not be liable to WHT.


A farmer supplies groundnut to a manufacturer of groundnut oil.
A manufacturer of glass supplies bottles to a bottling company or soft drink manufacturer.
An oil marking company supplies diesel direct to a user.
Where there is a tripartite relationship between parties in a transaction.

9. Agency Transactions & Arrangements: Agency arrangement implies a contract between a principal and an agent. The reward payable for services rendered by the agent is Commission, which is subject to WHT of 10%. However, if the principal is a non-resident, any sales proceeds from the arrangement will attract5% WHT, where any of the conditions in Section 26(1) (b) of CITA holds.

Withholding Tax Implication on Foreign Transactions.

1. Non-Resident Companies/Enterprises:The Revenue practice in Nigeria is that non-resident companies are not empowered to deduct any type of WHT. These categories of enterprises are practically outside the regulatory monitoring and control of the FIRS. It will be impracticable for the Revenue office to inspect the accounting books of these companies in order to confirm due deduction and remittance of WHT.

2. Double Taxation Agreement (DTA): That are ordinarily not liable to tax in Nigeria are not liable to WHT in Nigeria. Thus, contracts and supplies of goods and services performed entirely outside Nigeria by non-resident individuals are not liable to WHT. Nigeria has treaty agreements with about eight (8) countries and these countries are granted a reduced rate of WHT deduction, usually at 75% of the generally applicable WHT rate. 7.5%. These countries include the UK, Northern Ireland, Canada, France, Belgium, the Netherlands, Pakistan, and Romania.

Permanent Establishment Principle Exists Under Nigeria Taxation

The rules construe a PE where:

The company has a ‘‘fixed base’’ in Nigeria.
The company operate in Nigeria through a dependent agent authorized to conclude contracts or deliver goods on its behalf,
The company is executing a turnkey project in Nigeria, or
The operation between the company and its Nigeria affiliate does not appear to be at arm’s length.

‘‘Fixed base’’ implies some degree of permanence and will include:

Facilities, such as a factory, office, branch, mine, oil, or gas well
Activities, such as building, construction, assembly or installation.
Provision of services in connection with the activities listed above.

Nigeria tax laws do not exempt the income of branch from tax. A branch is seen as a permanent establishment and its income is taxable in Nigeria. It, therefore, has WHT obligations.

3. Companies Operating within the Free Trade Zones/EPZ: These companies are granted exemption from the payment of Nigerian taxes by virtue of their status as operating outside the country. Even where they make purchases outside the Free Trade Zones such companies that they deal with are presumed to be resident within the Nigeria Customs Territory and such transaction are also not liable to Nigerian taxes.

Other Types of Income Not Liable to WHT

Insurance premium: By law, there are some incomes which do not attract WHT, by virtue of their nature. These incomes include:

Insurance Premium received by Insurers or Stockbrokers will not be liable to WHT, although the Commission earned by Insurance brokers is liable to WHT.

Turnover/Income from Dealership or Distributive trade: The income earned by distributors or dealers from their trading activities is regarded as arising from transactions in the ordinary course of business and such income is not liable to WHT, but the Commission paid to them by the companies they represent will be liable to WHT.

Telephone Bills are not subject to WHT

Pros of Withholding Tax in Nigeria

1. Withholding tax will help in boosting the revenue of the government that would be used in the development of the country.
2. Withholding tax can help to reduce the total amount of tax liability to be paid at the end of the year.
3. Withholding tax prevents tax evasion as withholding tax is paid before income is spent.
4. Withholding tax will help in the growth of businesses that has to do with contract of purchase.

Cons of Withholding Tax in Nigeria

The problem of withholding tax in Nigeria is the poor administration that leaves a loop hole in the system.


1. Withholding tax generate revenue for the government as well as reduce the rate of tax evasion or tax avoidance. It is a tax liable to income earners and it is collected by the purchaser in a contract of purchase.
2. Withholding tax enhances the collection efforts of Tax Authorities and it ensures that revenue is generated in advance. The deduction of the withholding tax does not relieve any company or individual the obligation of paying income tax.

Finally, a company or individual whose deduction of WHT is greater than the taxable amount when the tax obligation becomes due, is entitled to a refund.

Kindly drop your comment below.

#tax #taxeducation #nigeria


The Federal Inland Revenue Service (FIRS) Memorandum of Understanding (MoU) Lagos State Internal Revenue Service (LIRS) to establish a joint tax audit system that will address duplication of efforts and facilitate the exchange of data.

Highlights of the signed MoU;
The FIRS and LIRS will carry out joint audit and investigation as well as conduct automatic exchange of information for gathering data for the purpose of tax administration.

1. The two tax authorities will collaborate on Capacity Building and strengthen the tax administration in Nigeria.

2. Expectations for the need for an establishment of a Joint Audit and Investigation team in which the FIRS/LIRS will refer to them as the “JAIT” covering both the back-duty and investigation of any selected taxpayer.

3. Both agencies are to promotes confidentiality, protect the financial information of all taxpayers exchanged, alongside ensure transparency and accountability in its reports.


1. Allows for the smooth operations for the tax authorities, which tends to also bring about improved service delivery for taxpayers.

2. The joint operation between the agencies will bring about a reduction in compliance cost for taxpayers.

3. It is expected to ensure that there is an improved transparency in the tax administration process.

4. Also, a reduced administrative cost for both tax authorities (FIRS and LIRS).


This might bring about over-lapping of responsibilities amongst the agencies.


An important aspect is the legal backing of the MoU. Section 68(4&5) of the FIRS Establishment Act as amended allows such collaboration between the FIRS and other Federal ministries and parastatals, but can the same section be interpreted to allow such collaboration with states and local government?

While the collaboration efforts are commendable, it is important that all the legal and administrative framework required to ensure the smooth take off of the MOU is properly considered by both parties.

Details of the MOU are still sketchy as no copy of the signed document has been made public yet. Until then, discussion will remain limited.

Kindly drop your comments below.  #taxaudit #taxation

Key Changes in the Finance Act 2021

On December 31, 2021, the Nigerian President officially signed the 2021 Finance Bill into law, which becomes operative on January 1, 2022. The modifications are as follows:

The proposed modifications, according to the Finance Act, reflect on different taxes and agency acts, particularly

  • Capital Gain Tax Act.
  • Company Income Tax Act.
  • Custom, Excise Tariffs Act
  • Federal Income Revenue Service (FIRS) Act.
  • Personal Income Act.
  • Stamp Duties Act.
  • Tertiary Education Trust Fund Act.
  • Value Added Tax Act.
  • Nigeria Police Trust Fund Act.
  • National agency for science and engineering infrastructure Act.

Capital Gain Tax Act.

According to Section 30 of the capital gains tax, a 10% rate will now be applied to all proceeds from the sale of Nigerian government securities, stocks, and shares if the proceeds are reinvested in the same year of assessment in the acquisition of shares. Furthermore, the total disposal revenues in any 12 consecutive months are less than #100 million.

In light of the following requirement on proceeds from the sale of securities, it is envisaged that tax will be incurred proportionately on the proceeds that are not reinvested, and persons disposing of securities should file appropriate returns with the relevant tax authorities on an annual basis.

Section 30(b) contains long-term securities issued by the Nigerian government, as well as other securities previously specified in the Act.

Companies Income Tax Act:

  • Profit from Nigerian Companies: Section 13(2)(c) The profits of a Foreign digital company that has significant economic presence in Nigeria , shall be deemed to be derived from or taxable in Nigeria where it transmits, emits or receives signals , sounds , messages , images or data of any kind by any form of transmission apparatus to Nigeria in respect of any activity including electronic commerce, application store , electronic data storage , participative network platform , online payment etc.
  • Profit from Nigerian Companies: Section 13(2)(e) The profits of a trade or business that carries out technical, management, consultancy, or professional services outside of Nigeria to a resident in Nigeria shall be only charged withholding tax on the non-resident income.
  • Insurance Companies: Section 16
  • Profit Exempted from tax Section 23 (c): Educational activities are no longer exempted from company income tax regardless of whether such activities are of a public character.
  • Profit Exempted from tax Section 23 (q): do not exempt profit of companies engaged in upstream, midstream, and downstream petroleum operations in respect of goods exported from Nigeria.
  • Section 30
  • Section 31(1): Allowable Deduction shall be the amount relating to the Qualifying capital expenditure in relation to an asset that is only partially utilized in generating the taxable income such QCE shall be prorated only the portion relating to the taxable income shall be allowable as a deduction: provided that the provisions of this subsection shall apply only where the proportion of non-taxable income constitutes greater than 20% of the total income of the company.
  • Payment of Minimum Tax: Section 33(2) Minimum tax is reduced to 0.25% from a 0.5% available for only two accounting period between 1 January 2019 – 31stDecember 2021.
  • Gas Utilization (downstream operations) : A revised section 39(1)(a)(i-iii) declares an initial tax-free period of 3 years extended to an additional two years if the service is impressed with the performance of a downstream business as long as this incentive is claimable only once by the same company and this would not apply to any company formed from reorganisation, restructuring, buy back or other similar schemes out of a company which has already enjoyed this incentive or any company that has claimed an incentive for trade or business of gas utilization under any law in Nigeria, including the Petroleum Profits Tax Act or the incentives under the Industrial Development (Income Tax Relief) Act.”
  • Returns and provisional accounts: Section55(7) states that any company that claims the minimum tax relief in Section 33(2) but do not comply with the timing of filing returns would be liable to pay penalty that is equal to the reduction claimed.
  • Time within which tax (including provisional tax) is to be paid Section 77
  • Section 78
  • Deduction of Tax at source: Section 81(1-9) this section shall not apply to compensation payment made under a registered securities lending transaction.

Customs, Excise Tariffs (Consolidation Act):

  • Section 21(3) An excise duty of #10 per litre is charged on non- alcoholic, carbonated, and sweetened beverages.

Federal Inland Revenue Service (Establishment Act):

  • Section 25 (4) FIRS is empowered to make use of special technology for the automation and administration in order to access the taxpayer information provided a 30 days’ notice has been given prior to the assessment period. Taxpayers who do not grant access to the service or have not written in a good cause for an extension shall be liable to a liability of #25,000 for each day it fails to grant access.
  • Section 28 (3-4): introduces a penalty charge to N1,000,000 on banks for each of the quarterly returns or information not provided or incorrect returns or information provided.
  • Section 68 of this act empowers the FIRS to be the primary agency of the Federal Government responsible for the administration, assessment, collection, accounting, and enforcement of taxes and levies due to the Federation, the Federal Government and any of its agencies except otherwise authorized by the finance minister.


  • Personal Relief and Relief for Children, dependents: Section 33 adopts a new subsection (3) states that deductible life assurance premium for personal income tax purposes is to exclude a contract for deferred annuity. (This payment is allowed for deductions are at arm’s length).
  • Section 94(1) declares the penalty of #20,000 and a charge of #2,000 for everyday in which the failure continues where the taxpayer refused to provide returns, information or records required by the service.

Stamp Duties:

  • Section 89A (3): Finance minister has given the service the power administration, collection, accounting, auditing 2015-2018 ,electronic levy .

Tertiary Education Trust Fund

  • Section 1(2) of the Tertiary Education Trust Fund Act was amended to increase the tax rate to 2.5% of assessable profits of companies registered in Nigeria other than small companies.


Value Added Tax Act

  • Section 10 of the Value Added Tax Act was amended to make provision and give more clarity to the need for non-resident persons or companies who make taxable supply to Nigeria to register with the FIRS and obtain Tax Identification Number.
  • Ssection 14(3) of the Act was amended to empower the FIRS to appoint any person to withhold or collect taxes on behalf of the Service and remit same in the currency of the transactions.

Nigerian Police Trust Fund Act

  • Section 4 of the Nigerian Police Trust fund act was amended to empower the FIRS to assess, collect, account and enforce the payment of the levy imposed by subsection 1b of the Act

National Agency for Science and Engineering Infrastructure Act (NASENI)

  • Section 20 of the Act was amended so that the agency can get funded from the following sources:
  • 1% from the federation account
  • Levy of 0.25% on net profit of companies with annual turnover of N100,000,000 and above covering the banking, telecommunication, ICT, aviation, maritime and Oil & gas sector.
  • This levy is to be collected by the FIRS and remitted to the agency’s account as stipulated by the ACT.