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Key reforms, incentives, and anti-avoidance measures shaping the future of taxation in Nigeria.

The Nigeria Tax Bill, 2024 proposes significant reforms to consolidate and modernise the country's tax framework. Key changes include:

1. Unified Fiscal Legislation: Under Sections 1 and 2, the bill repeals multiple existing taxation acts to create a unified legal framework for the taxation of income, transactions, and instruments. The repealed Acts are found in Section 197 and include the Capital Gains Tax Act, Cap. C1, LFN, 2004; (b) Casino Act, Cap. C3, LFN, 2004; (c) Companies Income Tax Act, Cap. C21, LFN, 2004; (d) Deep offshore and Inland Basin Act, Cap. D3, 2004; (e) Industrial Development (Income Tax Relief) Act, Cap. I17, LFN, 2004; (f) Income Tax (Authorised Communications) Act, Cap. I4, LFN, 2004; (g) Personal Income Tax Act, Cap. P8, LFN, 2004; (h) Petroleum Profits Tax Act, Cap. P13, 2004; (i) Stamp Duties Act, Cap. S8, LFN, 2004; (j) Value Added Tax Act, Cap. V1, LFN, 2004; and (k) Venture Capital (Incentives) Act, Cap. V2, LFN 2004. 
2. Introduction of Digital Asset Taxation: Gains from digital asset transactions are now explicitly recognised as taxable (section 4(1)(j)).
3. Taxation of Resident and Non-Resident Persons: Resident individuals and companies are taxed on income earned globally, with provisions for relief against double taxation (Sections 6-15). Non-residents are taxed on profits derived from activities in Nigeria, including digital services, shipping, and air transport (Sections 17-19).
4. Enhanced Rules for Multinational Corporations: Nigerian parent companies of controlled foreign corporations are required to pay taxes to meet a minimum effective tax rate if their subsidiaries abroad are taxed at a lower rate (Section 6(2)-(3)). The Bill implements strict transfer pricing rules to prevent profit shifting (Section 193).
5. New Incentives and Levies:  Tax incentives are made available for specific sectors, like mining and free trade zones (Sections 164-182). The Bill under Section 59 Introduced a development levy for designated purposes like Infrastructure Development, Education and Health and Economic Growth Initiatives
6. Value-Added Tax (VAT) Reforms: VAT applies to a broader range of taxable supplies, with adjustments to enforcement mechanisms and they are covered under Sections 142-148.
7. Stronger Anti-Avoidance Measures: The Bill contains enhanced provisions for taxing artificial and related-party transactions at arm's length prices. Thus, If a tax authority determines that a disposition has not been implemented or that a transaction aimed at reducing tax liability is artificial or fictitious, it may disregard the disposition or transaction. The authority can also make adjustments to the tax liability as necessary to counteract the reduction and issue an appropriate assessment or additional assessment (Section 192).