Nigeria’s Finance Bill 2022: Key Changes You Need to Know

The 2022 Finance Bill is currently undergoing legislative consideration. The Bill seeks to amend the following laws:

1. Capital Gains Tax Act (CGTA)
2. Companies Income Tax Act (CITA)
3. Customs, Excise Tariff, Etc (Consolidation) Act
4. Personal Income Tax Act (PITA)
5. Petroleum Profits Tax Act (PPTA)
6. Stamp Duties Act (SDA)
7. Value Added Tax Act (VATA)
8. Corrupt Practices and Other Related Offences Act
9. Public Procurement Act

Summary of the Key Changes

1. Increase in Tertiary Education Tax (TET) rate from 2.5% to 3%. It is instructive that the rate was only recently increased from 2% to 2.5% via the 2021 Finance Act.

2. Amendments to change the name of the FIRS to Nigeria Revenue Service and separate the Board from the Service with the latter to be headed by a Commissioner General.

3. Deletion of the proposed taxation of Gaming and Lottery businesses under the Companies Income Tax Act (CITA).

4. Capital losses deductible for Capital Gains Tax purposes may be carried forward for a maximum of 5 years.

5. The proposed 50% Investment Tax Credit for investment in gas utilisation has been changed to investment allowance of 10% and 5% per annum for non-associated and associated gas respectively subject to attaining a cumulative production of 300 billion cubic feet.

6. Exemption of companies engaged in upstream and midstream gas operations (along with Agro Allied businesses and manufacturing companies) from the annual restriction of capital allowance utilisation to 2/3rd of assessable profits.

7. Commencement date of the Bill changed from 1st January 2022 to 1st January 2023