FG to remove tax exemption on oil companies’ dividends

Dividends paid from the profits of oil companies will no longer be tax-exempt if the finance bill submitted by President Muhammadu Buhari is passed by the national assembly.

This was contained in a statement released by Yunusa Abdullahi, special adviser on media and communication to Zainab Ahmed, the minister of finance, budget and national planning, on Tuesday.

“This bill seeks to improve revenue by removing the tax exemption granted for dividends or income received from companies charged under the petroleum profits tax act,” the minister was quoted to have said.

“The bill contains some changes to the companies income tax act, value-added tax act, petroleum profits tax act, personal income tax act, capital gains tax act, customs and excise tariff act and stamp duties act.

“The bill also seeks to address the taxation of industries, such as insurance, start-ups, and the capital markets, evaluated by the federal government as critical to the growth and development of the Nigerian economy with a view to stimulating activities in those sectors and fostering overall economic growth.”

The president had submitted the 2020 budget proposal to the national assembly alongside the finance bill.

The bill has already scaled second reading at the legislative chambers.

Providing other details of the bill, Ahmed said capital gains tax amendment will cover the taxation of business combination and seeks to prevent abuse of a provision of the act on group restructuring.

In the area of stamp duties, the minister said the new bill will work towards increasing revenue generation from duties on electronic stamps.

While presenting the bill, Buhari had said it would fiscal equity by mitigating instances of regressive taxation; reform domestic tax laws to align with global best practices and introduce tax incentives for investments in infrastructure and capital markets.