7 Major 2022 Tax Updates in Nigeria

7 Major 2022 Tax Updates in Nigeria

The Nigerian tax administration experienced a lot of ups and downs in 2022, especially in its strive to generate revenue and regulate its taxation activities.

The 7 major 2022 tax updates in Nigeria is a summary of the momentous 12 months calendar year for the Nigerian Tax Administration. The administration experienced major changes that impacted collection amidst irregularities reported.

7 Major 2022 Tax Updates in Nigeria

Journey with us as we recall 7 major 2022 tax updates in Nigeria below as reported by www.africataxreview.com

Lagos lives up to Revenue Challenge

One of the major tax highlights of 2022 was when the Lagos State Internal Revenue Service (LIRS) issued a public notice stating that it was providing for a digital facility that would generate an e-Tax bill reference which would ease the payment of taxes such as the pay-as-you-earn (PAYE), withholding tax (WHT) among others.

It was said to have been in accordance with the digitalization policy of LIRS and was slated to begin implementation on August 1st, 2022.

According to the new directive, taxpayers in Lagos are required to carry out five major steps in compliance as stated by the public notice.

The five major steps are thus:

1. Visit https://etax.lirs.net

2. Input your payer ID and password to log in

3. Select revenue type, and upload schedule (for PAYE & Withholding Tax)

4. Generate a bill reference

5. Make a payment on any of the multiple channels available, using the generated bill reference.

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Whistle Blower Policy on Tax Defaulters

Second on our list of the 7 major 2022 tax updates in Nigeria details a move where the nation’s commercial capital launched a state-wide Whistle-Blower initiative which kicked off on Friday 5th, of August.

The initiative was meant to open up a window where employees, stakeholders, and the general public can report irregularities such as violations, misconduct, or unethical behavior by officials of the agency across the state.

In summary, Africataxreview.com gathered that the new initiative will help the state government further prevent loopholes in the system, ensuring that revenue collection is effectively optimized.

According to the LIRS Executive Chairman, Ayodele Subair, the platform is anonymous and confidential, and the objective here is to guarantee transparency, accountability, and confidentiality to all taxpayers and stakeholders in general.

There is also a guarantee that whistle-blowers would be protected from the victimization of any kind.

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Tax Holiday Spree!

To entice foreign investors and increase private capital inflows into the country, President Muhammadu Buhari reopens talk on tax holidays in Nigeria.

He implored them to take advantage of Nigeria’s fiscal investment incentives which include three to five years of tax holidays for enterprises for pioneer industries; tax-free operations and no restrictions on expatriate quotas in Nigeria’s free trade zones, among others.

While speaking at a meeting with the BCIU at the Nigeria International Economic Partnership Forum, held on the margins of the 77th UN General Assembly in New York, the president defined the United States as Nigeria’s major trading partner.

He also revealed that since signing the African Continental Free Trade Agreement, Nigeria has solidified its position as a gateway to an integrated continental market, comprising 1.3 billion consumers with an aggregate GDP of $ 3.4 trillion.

He noted that his administration was focused on developing Nigeria’s manufacturing sector, which is why it has formulated seventeen operational special economic zones, Fourteen out of them are general economic zones that aid export processing, large-scale manufacturing, and more.

The president explained that since the country is largely gifted with natural resources, a technological partnership is required to turn this natural endowment into high-value goods.

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Ridiculous Levy on Burial Banners

Another unforgettable event in 2022 was when the less than a year-elected Governor Charles Soludo imposed new levies on activities surrounding the public announcement of burials in the state.

In specifics, the families of the deceased are expected to pay ₦100,000 as a levy to paste posters or display banners of any size of a deceased in the state.

Consequently, the Managing Director/Chief Executive Officer (CEO) of Anambra State Signage and Advertisement Agency, Mr. Tony Odili Ujubuon͂u formally communicated it to the different community leaders in the state.

The tariff of what is payable according to sizes, description, amount, and duration of the taxes are: 4 X 6FT ₦5,000 for 2 weeks; 8 X 10FT ₦20,000 for 2 weeks; above 10FT square are ₦100,000 monthly; and ₦5000 for posters for 2 weeks.

The governor through the signage agency has communicated that the new policy is informed by the growing spate of the environmental deface caused by the indescribable paste of these posters that have threatened the aesthetics of buildings across communities.

The levy which began implementation on November 1st, 2022 received varying reactions, especially in the social media space.

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Agric-Sector’s 5-Year Tax Break

The federal government offered numerous tax breaks in 2022, and another memorable one was the 5-year tax break that was used as an incentive to improve the country’s agricultural produce and encourage high-level private sector participation in Agriculture, production, and processing in the country.

The government also mentioned plans to grant tax-free agricultural loans with a moratorium period of over 18 months and a repayment period of not more than seven years, and zero-tariff rates on the importation of agrochemicals.

According to the Minister of Agriculture and Rural Development, Dr. Mohammad Abubakar, the agricultural growth in Nigeria has increased from 3.48% in 2015 to 6.48% as of 2020, and there are plans to make it better.

There were also talks of addressing areas such as beef and dairy production and processing, veterinary drugs and vaccine production, and others.

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Clamour for More Taxes

Another memorable tax occurrence in the previous year was when the Federal Ministry of Finance and National Planning blamed the nation’s underground economy on Nigerians’ ‘lackadaisical attitude’ towards tax payments.

According to the Minister of Finance, Zainab Ahmed, Nigerians’ poor attitude towards tax payment is drawing the economy back which is in turn affecting the average Nigerian’s living standards.

She then went ahead to propose numerous solutions:

1. Enlighten Nigerians on the importance of paying their taxes.

2. Pay more attention to the agriculture sector and grow it on an exponential basis.

3. Mobilize external resources by designing programs that will be used to motivate diasporans to bring their resources to Nigeria and invest in the development of certain projects.

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Grow in VAT

Lastly, on our list of 7 major 2022 tax updates in Nigeria, we reported that at a time when the economy was not in great condition and there was an urgent need to fund the public purse, Nigeria recorded 4.21% Growth In VAT.

In 2022, NBS revealed that the Federal government generated ₦625.39 billion as Value Added Tax (VAT) in the third quarter of 2022 and explained that the number depicts a growth rate of 4.21% quarter-on-quarter basis from ₦600.15 billion in Q2 2022 and a 24.95% increase year-on-year from Q3 2021.

The sectors with the highest contribution in Q3 2022 were manufacturing at 31.08%, information and communication at 18.52%, and mining & quarrying at 10.95%.

As part of the total figure, local payments recorded were ₦367.93 billion, Foreign VAT Payments were ₦121.85 billion, while import VAT contributed ₦135.61 billion in Q3 2022.

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Closing Statement

Those are 7 of the major tax updates that we reported in the year 2022.

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