Nigerian Government to remove tax exemption on oil companies’ dividends

The federal government of Nigeria wants to remove the tax exemption on dividends paid from the profit of oil companies.

Okay.ng understands that this will happen if the National Assembly passes the finance bill submitted alongside the 2020 Budget proposal by President Muhammadu Buhari.

Zainab Ahmed, the minister of finance, budget, and national planning, disclosed this in a statement issued by her office on Tuesday.

She said, “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 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.”

Adding other details of the bill, Ahmed said the bill would provide efficiency in the administration of individual income taxes in Nigeria.

On Capital Gains Tax, she said the amendment would cover the taxation of business combination and prevent abuse of a provision of the Act on group restructuring.

Commenting on Stamp Duties, the minister said the new bill sought to increase revenue generation from duties on electronic stamps.