Dividends from Oil Firms to Lose Tax Exemption Status

crude oil prices

By Adedapo Adesanya

Nigeria’s Minister of Finance, Mrs Zainab Ahmed, has disclosed that dividends paid from the profits of oil companies will no longer be exempted from taxes. However, she said this proposal has to be approved by the National Assembly in the finance bill presented to the parliament by President Muhammadu Buhari when he presented the 2020 budget last month.

In a statement signed by the Minister’s Special Adviser on Media and Communication, Mr Yunusa Abdullahi, on Tuesday in Abuja, it was stated that, “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,” she said further.

Business Post reports that the bill has already passed the second reading at the Senate.

The Minister further said that the 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, noting that with the new bill, there would be measures put in place to generate revenue electronic stamp duties.

President Buhari during the presentation of the bill to the legislature said that it would mitigate regressive taxation bringing about fiscal equity; reform domestic tax laws to align with global best practices and introduce tax incentives for investments in infrastructure and capital markets.

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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