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Non Resident Companies Like Amazon, Others To Remit 6 Percent Tax On Income Generated From Nigeria Customers

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Company Income Tax - Investors King

The federal government of Nigeria has mandated digital Non-Resident Companies (NRC) to remit 6 percent tax on income generated from digital services rendered to Nigerian customers.

Non-resident companies can be defined as companies or entities that are not registered or incorporated in Nigeria but derives income or profits from Nigeria. These include Amazon, AliExpress, Twitter, Zoom Inc. and others.

At the public presentation of the 2022 approved budget held at Abuja on Wednesday, the minister of finance, budget and national planning, Ahmed Zainab revealed that the new tax policy has been included in the Finance Act signed into law on the last day of 2021 by the President Muhammadu Buhari.

The Finance Act empowers the Federal Inland Revenue Service (FIRS) to assess Company Income Tax (CIT) on the turnover of foreign digital companies involved in transmitting, emitting, or receiving signals, sounds, messages, images, or data of any kind including e-commerce, app stores, and online adverts. Also, Non-residents making taxable supplies to recipients in Nigeria have the primary obligation to charge, collect and remit VAT to FIRS.

The minister affirmed that section 4 of the Act made provisions for the taxation of e-commerce businesses by non-resident companies on a fair and reasonable turnover basis of 6 percent.

Ahmed said, “this provision empowers FIRS to access non-resident firms to tax on Fair and Reasonable Turnover Tax Basis on turnover earned from digital services provided to Nigerian customers. The rationale for this is to modernize the taxation of ICT and digital economy in line with current realities, and this is in conformity with the provisions of the national development plan of 2021.”

she added that “such digital services include apps, high-frequency trading, electronic data storage, online advertising and several others.”

According to the Finance Act, the digital Non-Resident companies are obliged, to collect VAT from their Nigerian customers and remit to the FIRS.

Ahmed further explained that “the mechanism that will be used is to restrict VAT obligations mainly to digital non-resident companies who supply individuals in Nigeria, who cannot themselves self-account for VAT.

“If you visit Amazon, we are expecting Amazon to add a VAT charge to whatever transaction you are paying. I am using Amazon as an example. We are going to be working with Amazon to agree to be registered as a tax agent for the FIRS. So Amazon will now collect this payment and remit it to FIRS, and this is in line with global best practices. We have been missing out on these revenue streams.”

Discussing non-resident taxpayers, Ahmed said the Finance Act puts into consideration reducing tax compliance orders on non-resident taxpayers who are not required to register for VAT in Nigeria.

“So they don’t really have to come and be registered companies in Nigeria. All they need is that arrangement with FIRS where they collect VAT on behalf of FIRS and remit to FIRS.

“And also, to clarify, that FIRS may appoint persons including non-resident companies for the purpose of VAT collection and to clarify again that appointed persons may collect and remit taxes to FIRS, pursuant to the relevant tax laws.

“The core rationale for this is to modernise the taxation of ICT and digital economy in line with the National Development Plan 2021-2025, to enhance administrative modalities for the taxation of non-resident taxpayers and also to reduce incompliance by non-resident payers to reduce the compliance burden.” She said.

According to the PWC Nigeria report, Nigeria’s Finance Bill 2021 seeks to amend 12 different laws, that become effective in the Year 2022. They are;

  • Capital Gains Tax Act (CGTA)
  • Companies Income Tax Act (CITA)
  • Federal Inland Revenue Service (Establishment) Act [FIRSEA]
  • Personal Income Tax Act (PITA)
  • Stamp Duties Act (SDA)
  • Tertiary Education Trust Fund (Establishment) Act [TETFEA]
  • Value Added Tax Act (VATA)
  • Insurance Act
  • Nigerian Police Trust Fund (Establishment) Act [NPTFEA]
  • National Agency for Science and Engineering Infrastructure Act (NASENI Act)
  • Finance (Control and Management) Act [FCMA], and
  • Fiscal Responsibility Act (FRA)

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Insurance

Heirs Insurance Group Unveils Revolutionary Website for Seamless Insurance Experience

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Heirs Life Assurance- Investors King

Heirs Insurance Group has launched a website designed to revolutionize the insurance experience for its customers.

With a focus on simplicity, accessibility, and personalized service, the new website aims to streamline the process of obtaining insurance coverage and empower customers to make informed decisions about their insurance needs.

The website boasts a range of innovative features that make navigating insurance options easier than ever before.

From simple and intuitive navigation menus to personalized insurance recommendations, the website is designed to guide customers through every step of the insurance process quickly and efficiently.

According to Ifesinachi Okpagu, the Chief Marketing Officer of Heirs Insurance Group, the new website embodies the company’s commitment to delivering exceptional customer service.

“Today’s customers want simplicity, and this new website delivers on that request,” Okpagu said. “We are empowering customers to take control of their lives, their businesses, assets, and their most cherished people.”

One of the key features of the website is its personalized insurance experience, which takes customers through a short journey to help them identify the best insurance plan for their needs.

Whether customers are looking for coverage for their home, car, business, or loved ones, the website provides tailored recommendations to ensure they find the right insurance solution quickly and easily.

With its user-friendly interface and innovative features, the new website from Heirs Insurance Group sets a new standard for the insurance industry, making it easier than ever for customers to protect what matters most to them.

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Banking Sector

Safaricom, Access Holdings Forge Partnership to Revolutionize Remittance Corridor in Africa

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Access bank

Safaricom, the leading telecommunications company in Kenya, has entered into a strategic partnership with Access Holdings, spearheaded by Aigboje Aig-Imoukhuede.

The collaboration aims to revolutionize the remittance corridor between East and West Africa, marking a significant step towards enhancing financial inclusion and empowering millions of individuals across the continent.

The partnership comes on the heels of Access Holdings’ recent acquisition of the National Bank of Kenya Limited, signaling the company’s ambitious expansion into the East African market.

Leveraging Safaricom’s extensive network and expertise in mobile money through M-Pesa, which currently dominates the mobile money market in Kenya, the alliance seeks to create seamless and efficient channels for remittance transactions.

Aigboje Aig-Imoukhuede, the driving force behind Access Holdings, expressed enthusiasm about the collaboration, highlighting its potential to transcend traditional boundaries and foster greater economic connectivity between East and West Africa.

He highlighted the fusion of collective expertise and resources between the two entities, underlining their shared commitment to driving financial inclusion and empowerment across the continent.

The partnership holds promise for addressing the challenges faced by millions of Africans in accessing affordable and reliable remittance services.

By connecting more than 60 million customers and 5 million businesses across eight countries, the collaboration aims to facilitate over $1 billion in daily transaction value, significantly boosting the flow of remittances within and outside Africa.

With the first phase of the collaboration focusing on key markets such as Nigeria, Kenya, Ghana, and Tanzania, stakeholders anticipate a transformative impact on the remittance landscape, paving the way for greater intracontinental trade and economic integration in line with the objectives of initiatives like the African Continental Free Trade Area (AfCFTA).

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Banking Sector

EFCC Urged to Repatriate Recoveries to NDIC for Depositors’ Relief

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The Nigeria Deposit Insurance Corporation (NDIC) has made a fervent plea to the Economic and Financial Crimes Commission (EFCC) to expedite the repatriation of recovered funds to its coffers to facilitate the timely reimbursement of depositors affected by bank failures.

During a recent meeting between the Managing Director of NDIC, Bello Hassan, and the Executive Chairman of the EFCC, Ola Olukoyede, at the NDIC headquarters in Abuja, Hassan stressed the importance of enhanced collaboration between the two agencies in recovering depositors’ funds lost due to bank failures.

Hassan emphasized that the return of recoveries made by the EFCC on behalf of the NDIC would significantly contribute to the prompt reimbursement of affected depositors.

He commended the EFCC for its unwavering efforts in combating corruption and financial crimes, highlighting its crucial role as a key member of the Taskforce on Implementation of the Failed Banks Act chaired by the NDIC.

The NDIC boss also highlighted the existing partnership between the two organizations, which led to the establishment of the NDIC Help Desk at the EFCC in 2022.

He disclosed that several high-profile cases referred to the EFCC were currently under investigation.

In response, Olukoyede reiterated the EFCC’s commitment to collaborating closely with the NDIC to combat financial crimes and safeguard the integrity of the Nigerian banking sector.

He pledged to intensify efforts to repatriate recovered funds promptly, acknowledging the interconnectedness between criminal activities and bank failures.

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