In 2023, Nigeria experienced a transformative shift in its fiscal landscape, driven by a combination of political and legislative advancements. The Federal Government, keen on bolstering revenue, initiated significant changes, including the enactment of the Business Facilitation Act 2023 and the Finance Act 2023.
Legislative Developments
- Business Facilitation Act 2023 (BFA): Enacted in February 2023, the BFA aimed to streamline business operations and enhance the ease of doing business in Nigeria. It reformed 21 business-related laws, impacting tax regulations and legislations. Amendments included raising the minimum employee threshold for mandatory contributions to the Industrial Training Fund (ITF) and affirming the supremacy of financial reporting guidelines as adopted by the Financial Reporting Council Act.
- Finance Act 2023 (FA): Signed into law by former President Buhari, the FA 2023, effective from September 2023, aligned taxation with economic reforms and global standards. Key amendments included the inclusion of digital assets in the Capital Gains Tax Act, introduction of a new tax returns compliance regime for companies in transport business, and imposition of excise duties on all services provided in Nigeria.
- Other notable changes under the FA 2023:
- Inclusion of digital assets in the definition of chargeable assets.
- Repealing of certain incentives under the Companies Income Tax Act (CITA).
- Imposition of a 0.5% levy on eligible goods imported into Nigeria.
- Introduction of excise duties on all services provided in Nigeria.
- Expansion of deductible expenses under the Petroleum Profits Tax Act.
- Distribution Formula Adjustment:
- Amendment of the distribution formula for revenue from the Electronic Money Transfer Levy.
- VAT Act Amendments:
- Redefinition of “building” to mean any structure permanently affixed to land.
- Change in the statutory due date for filing VAT returns.
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