We can all agree that it’s been an eventful week, with Tinubu’s shocking cabinet reshuffle, the controversy surrounding Faithia Williams’ upcoming movie, “Efunroye” and the tragic death of Priscilla. But while all of these have happened, there has been little to no focus on the interesting tax developments made by the government in Nigeria. Here are the taxes that caught my attention:
The bill with an interesting name
First on the list is this bill with an interesting name, “A Bill for an Act to Repeal Certain Acts on Taxation and Consolidate the Legal Frameworks relating to Taxation and Enact the Nigeria Tax Act to Provide for Taxation of Income, Transactions, and Instruments, and Related Matters.”
The Bill which was obtained from the National Assembly is dated October 4, 2024. According to the bill, services such as telecommunications, gaming, gambling, betting, and lotteries will be subject to excise duties at the rates specified under the Tenth Schedule to the Act.
The Federal Inland Revenue Service (FIRS) will prescribe the manner in which these duties will be applied. It is vital to note that if this bill is passed, there will be a direct increase in the cost of using the services affected.
Bureau de change tax control
As provided in the Nigeria Tax Administration Act, where an exchange of currency transaction involving the naira is conducted within or outside Nigeria, the national assembly has suggested that the exchange rate must not exceed the prevailing rate at the official market, authorised by the Central Bank of Nigeria (CBN).
The legislature said where the exchange rate of the transaction exceeds the prevailing exchange rate at the official market authorised by the CBN, the excess should be payable as excise duty by the seller on a self-assessment basis.
Enugu state is taxing dead bodies
The Enugu State government has introduced mortuary taxes, which it said is not to generate revenue but to discourage people from taking their dead ones to mortuaries. The Enugu State Internal Revenue Service (ESIRS) approved the tax in line with the provisions of section 34 of the Birth, Deaths and Burials Law, Cap. 15 Revised Laws of Enugu State 2004.
It states that “The sum of N40.00 only is to be paid by owners of a corpse once it was not buried within twenty-four hours. The amount continues to count on a daily basis.”
The ESIRS executive chairman, Emmanuel Nnamani, explained that the tax was not new to the state, adding that it was within the Enugu State Mortuary Tax Law, which had been in existence for years.
“It is an indirect tax paid by mortuary owners, not deceased family, and it is just N40, not N40,000. Since its introduction, nobody has been denied burying their dead ones. It means that that corpse stays in the mortuary for 100 days, and the mortuary is expected to pay the state sum of N4,000.” Mr Nnamani stressed.
While he may have cleared up the question of who is being taxed, one would ask who truly bears the payment responsibility. The morgue owner who simply provides services or, the owners of the corpses in the morgue.
The proposed tax on rich Nigerians
While President Tinubu was away from the country on his annual leave in Paris, France and Vice President Shettinao an official assignment in Sweden, the minister of the federal capital Territory, Nyesome Wike, backed by the Federal Government proposed an imposed 25% effective tax rate on Nigerians earning ₦1.5 million Naira and above monthly in the country.
The former Rivers State governor made the proposition at the maiden edition of the Abuja Business and Investment Summit organised by the Abuja Investment Company Limited where he emphasised that the federal government needs money to provide services for Nigerians.
While most of these bills are currently under review by the legislature, there is no clear direction on whether they will be dismissed or how soon they will be passed into law but as proven by the recent occurrences, Nigeria happens when we least expect it.
