The Lagos State Internal Revenue Service (LIRS) has issued Public Notices pursuant to recent tax law changes, highlighting compliance requirements from taxpayers and other relevant parties resident in the state.
The relevant tax law changes include:
- The Capital Gains Tax (CGT) Act historically exempted gains on the disposal of Nigerian government securities, stocks and shares from CGT. The Finance Act 2021 has amended the CGT Act to introduce CGT on the disposal of shares, subject to certain conditions.
- The Minister of Finance (MoF) issued a Notice effective from 2 January 2012, exempting interest and other income earned from government, corporate and supranational bonds from PIT. The MoF Notice highlighted that the exemption was for a period of 10 years (i.e until 1 January 2022), except for FG bonds which will continue to be exempt. The 10-year period has now lapsed, and the LIRS communicated that the exemptions have expired.
- CGT In line with powers granted under PITA, the LIRS has appointed Stock Brokers and other Capital Market Operators as agents for the purposes of filing CGT returns on transactions involving individuals and other unincorporated entities (i.e beneficiaries) resident in Lagos.
- Such returns are to be submitted to the LIRS and should include particulars such as the name of the investor, the date of disposal and the sales proceeds amongst others.
- The returns must be submitted by June and December every year in line with the CGT Act. Beneficiaries are also required to submit returns by 31 March of the following year (i.e together with their PIT returns).
- The Public Notice also highlights that the beneficiaries should make relevant CGT payments within 30 days of making the disposal. PIT
- The Public Notice highlights that eligible agents are required to deduct WHT on interest on short-term securities paid to beneficiaries.
- Sums withheld should be remitted to the LIRS within 30 days of such deduction through the e-tax platform.
- Beneficiaries should declare the relevant income in their annual PIT returns.
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