Analysts say the Finance Bill of 2021 will impact negatively on lottery games next year, when the Bill is expected to have been passed into law and implemented.
“The Lottery and Gaming business is to be specifically taxable under CITA including betting, game of chance, promotional competition, gambling, wagering, video poker, roulette, craps, bingo, slot or gaming machines and the likes, a peep into the Bill revealed.
The Bill has 21 changes that will affect various sectors next year.
The list include capital gains tax at the rate of five per cent to be applicable on disposal of shares in a Nigerian company worth N500 million or more in any 12 consecutive months except where the proceed is reinvested in the shares of any Nigerian company within the same year of assessment.
It added, a partial re-investment will attract tax proportionately. Transfer of shares under the regulated Security Lending Transaction is exempted.
A research by PWC Nigeria added that companies engaged in petroleum operations including Midstream and Downstream operations will not be eligible for exemption on profits in respect of goods exported from Nigeria. Downstream companies were previously eligible under the old Upstream and Downstream classification.
According to the bill, FIRS is to be empowered to assess CIT on the turnover of a foreign digital company involved in transmitting, emitting, or receiving signals, sounds, messages, images or data of any kind including e-commerce, app stores, and online adverts.
Capital allowance claimable on an asset is limited to the portion used for generating taxable profits. Assets partially used to generate taxable income will be eligible for pro-rata capital allowance except where the proportion of non-taxable income does not exceed 20% of the total income of the company.
Added to that, any capital allowance or unabsorbed allowances brought forward by a small or medium company, other than a company under pioneer status, to be treated as having been claimed and consumed in each such year of assessment, the bill stated.
“The reduction of minimum tax rate from 0.5% to 0.25% of turnover (less franked investment income) is to be applicable to any two accounting periods between 1 Jan 2019 and 31 Dec 2021 as may be chosen by the taxpayer.
“Disputed tax assessment to be in abeyance until determination while undisputed tax assessment is to be paid within 30 days after service of the notice of assessment on the company except otherwise extended by the FIRS. Reference to provisional tax has been deleted in recognition of the well-established self-assessment tax regime,” it said.
