In a recent engagement with some Nigerians in the diaspora, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele explained the key provisions of the new tax laws, provided clarifications to the areas of concerns and explanation to the pressing questions.
Here is an extraction from the dialogue: Will the money I send to Nigeria (for family, upkeep, gifts, projects or other payment) be taxed under the new laws?
No, genuine personal transfers such as family remittances, gifts, refunds (e.g., flight tickets), or community savings contributions are not treated as taxable income.
Only income earned or deemed to be income (e.g., wages, business profits, investment returns) is subject to tax.
Every individual is required to self-report their income and pay tax where applicable. Tax authorities are expected to issue guidelines on how to distinguish taxable from non-taxable inflows.
Will I be taxed twice, abroad and in Nigeria, on the same income? No. Income earned abroad and brought into Nigeria by a non-resident individual is now specifically exempted from tax in Nigeria regardless of whether tax was paid abroad or not, for instance those who reside in countries with no personal income tax.
In addition, Nigeria has Double Taxation Agreements (DTAs) with several countries, and the new tax laws provide for a unilateral relief where a DTA does not exist to ensure that the same income is not taxed twice.
