Nigeria Finance Act 2023: Analysis of Key Amendments


Nigeria Finance Act 2023: Analysis of Key Amendments.

On May 28, 2023, the Finance Act, 2023 was signed into law by former President Muhammadu Buhari, bringing significant changes to various legislation in Nigeria. This article provides a detailed analysis of some key amendments introduced by the Act, including modifications to the Capital Gains Tax (CGT) Act, Companies Income Tax (CIT) Act, Tertiary Education Tax (TET) Act, Customs, Excise Tariff, Etc. (Consolidation) (CET) Act, and Personal Income Tax (PIT) Act.

Also, Petroleum Profits Tax (PPT) Act, Value Added Tax (VAT) Act, Stamp Duties (SD) Act, Corrupt Practices and Other Related Offences Act, Ministry of Finance Incorporated Act, and Public Procurement Act were affected. The effective date of the Act is also May 28, 2023.

Nigeria Finance Act 2023

Capital Gains Tax (CGT) Act:

1. Digital assets, including cryptocurrencies, non-fungible tokens (NFTs), and tokenized assets, are now considered chargeable assets for capital gains tax purposes. The rate of CGT on the disposal of digital assets is set at 10%.

2. The principle of tax-loss harvesting is incorporated, allowing the setoff of capital losses from the disposal of chargeable assets against capital gains from the disposal of assets of a similar class. Unabsorbed capital losses can be carried forward for up to 5 years and applied against future capital gains from the disposal of similar assets.

3. The qualifying assets for roll-over relief now include shares and stocks. However, the proceeds from the disposal of assets must be reinvested within the same assessment year.

Customs, Excise Tariff, Etc. (Consolidation) (CET) Act:

1. An import levy of 0.5% is introduced on eligible goods imported into Nigeria from outside Africa. The revenue from this levy will be used for capital contributions, subscriptions, and financial obligations to designated multilateral institutions.

2. Excise duties are introduced on all services provided in Nigeria, including telecommunication services, at rates to be prescribed by the President through an Order.

Companies Income Tax (CIT) Act:

1. The provision granting a 10% investment allowance on capital expenditure for plant and equipment is repealed, as it is considered redundant. However, companies can still enjoy investment allowances that were granted before the effective date until fully utilized.

2. Incentives such as rural investment allowances and exemption of 25% of income in convertible currencies derived from tourists by hotels are deleted. However, funds allocated for expansion purposes remain exempt from tax for 5 years or until fully utilized, whichever comes first.

3. International shipping and air transport companies are required to provide audited financial statements or submit a comprehensive gross revenue statement of their Nigerian operations, endorsed by a director and external auditor, along with supporting invoices when filing CIT returns.

4. Regulatory agencies must now request evidence of income tax filing and tax clearance certificates from shipping and air transport companies before processing and approving their business approvals and permits.

Personal Income Tax (PIT) Act:

1. Premiums paid by individuals to insurance companies for insurance or deferred annuity contracts on their lives or the life of their spouse become tax-deductible. However, any withdrawals made within 5 years will be subject to tax.

Petroleum Profits Tax (PPT) Act:

1. Decommission and abandonment contributions made by upstream companies to an approved fund, scheme, or arrangement by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) are now allowable deductions for PPT purposes, provided a Statement of Account of the fund is provided.

2. The basis for determining the chargeable crude oil price under the PPT Act is revised to the fiscal oil price per barrel. If no fiscal price exists for a crude stream, the NUPRC will establish a fair and reasonable fiscal price based on comparable Nigerian crude oil streams’ quality and specific gravity. If there are no comparable Nigerian crude oil streams, the fiscal price will be determined based on the official selling prices at international trading centres for crude oil of similar quality and gravity.

3. Companies engaged in upstream and midstream gas operations are now entitled to fully relieve their capital allowances against their assessable profits, similar to those in the manufacturing industry.

4. The late filing penalty for PPT default is revised to ₦10 million for the first day of default and ₦2 million for each subsequent day of default.

5. An administrative penalty of ₦10 million is introduced for non-compliance with the provisions of the PPT Act in the first month of default. A further penalty of ₦2 million per day, or as approved by the Minister of Finance, is applicable for each day the default continues.

Value Added Tax (VAT) Act:

1. Importers who purchase taxable goods from non-resident suppliers (NRS) through online electronic or digital platforms appointed by the Federal Inland Revenue Service (FIRS) must charge and collect VAT. To clear the goods at the port of entry into Nigeria without paying VAT, importers must provide proof of the NRS’s registration or appointment, along with evidence of VAT charged on the sales invoice.

2. The definition of “building” is revised to include structures permanently affixed to land for most or all of their useful life, excluding easily removable fixtures or structures such as masts, transmission lines, vehicles, and mobile homes.

3. The due date for filing VAT withheld at source by appointed VAT collection agents is revised to the 14th day of the month following the transaction.

Stamp Duties (SD) Act:

The sharing formula for the Electronic Money Transfer (EMT) levy is revised to allocate 15% to the Federal Government, 50% to State Governments, and 35% to Local Governments.

Tertiary Education Tax (TET) Act:

The TET rate is increased from 2.5% to 3%.


The Finance Act of 2023 introduces crucial amendments to various tax-related legislation in Nigeria. These changes reflect the government’s efforts to address specific issues, promote transparency, and generate revenue.

The Act brings digital assets under the purview of capital gains tax, modifies tax provisions for companies, increases the Tertiary Education Tax rate, introduces new provisions for petroleum profits tax and value-added tax, and imposes import levies and excise duties. These amendments will have significant implications for businesses and individuals operating in Nigeria’s tax landscape.

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