Country Profile: Nigeria

Financial Transactions Tax (FTT): Yes – tax in place

Stamp Duty/Financial Transaction Tax: Any entity or person with a “significant presence”, even if is is not physical is now subject to a Stamp Duty N50 on bank transfers from one account to another valued above N10,000, unless it is a person switching money between their own personal bank accounts and The Finance Bill 2019 amends sections 9, 10, 13, 16, 19, 20, 23, 24, 27, 29, 31, 33, 39, 40, 41, 43, 53, 55, 77, 78, 80, 81, and 105 of CITA. It will also amend the third and seventh schedules of the Companies Income Tax Act (“CITA”). The amendments mean that companies without their TIN cannot operate corporate accounts in the country, foreign companies engaged in the ‘digital’ economy would be subjected to the payment of tax in Nigeria, any digital company with a ‘significant economic presence’ in Nigeria, even without any physical presence in the country, but making some sort of financial trade is expected to pay tax (Udo 2019). Minimum Tax basis is levied and payable by a company for any year of assessment where, in ascertainment of total assessable profits from all sources a loss occurs, or tax on total profits is less than the minimum tax as determined below; where turnover is N500,000 or below, minimum tax payable shall be the highest of: 0.5% of gross profits, 0.5% of net assets 0.25% of paid-up capital , or0.25% of Turnover for the year. Where turnover is above N500,000, minimum tax payable shall be the sum of the highest factor in the above; plus 0.125% of turnover in excess of N500, 000. Exceptions to minimum tax are that it is not applicable to a company during the first four years of its commencement of business, it is also not applicable to agricultural trade or business as defined in Section 9 (8) of Companies Income Tax Act: and it is not applicable to any company with at least 25 per cent imported equity capital.

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