BY PETER EGWUATU

The Federal Inland Revenue Services (FIRS) has disclosed that the implementation of the new national tax policy for the country has commenced following the approval of the final draft of the regulation by the Federal Government which was gazetted on September 21, 2012.

Director, LTD (OIL & GAS) of FIRS, Mr. Ayayi Bamidele, who disclosed this in Lagos at a workshop organised by Ernst and Young, tagged Transfer Pricing, said, “The Nigerian Income Tax (Transfer Pricing) Regulations No.1, 2012 have been released by the FIRS. The initial draft of the regulations was issued in April 2012, and subsequently the final draft was approved and gazetted on 21 September 2012.

“So in effect, its implementation has continued depending on the accounting period of individual organisations. For instance, if an organisation’s accounting period ends in December 2012, it means from January it will begin to apply the new policy.”

He further said that, “Nigeria, being an integral part of the larger world that wants to be one of the 20 most developed countries in the year 2020 cannot afford to be left behind in tax development. In the era when cross border businesses are on the increase, the share of the apple should not be allowed to be skewed against Nigeria. The international community requires certainty in our tax system to meet one of the canons of taxation and to gain their confidence in doing business with Nigeria.”

While commenting on Transfer Pricing regulation,  Bamidele noted  that the regulations gave effect to the provisions of-(a)section 17 of the Personal Income Tax Act, CAP P8, Laws of the Federation of Nigeria, 2004 (as amended by the Personal Income Tax (Amendment) Act, 2011);(b) section 22 of the Companies Income Tax Act, CAP C21, Laws of the Federation of Nigeria, 2004 (as amended by the Companies Income Tax (Amendment) Act 2007; and (c) section 15 of the Petroleum Profit Tax Act, CAP 13, Laws of the Federation of Nigeria, 2004.

The  objectives, according to him, include: to ensure that Nigeria is able to tax on an appropriate taxable basis corresponding to the economic activity deployed by multinational enterprises in Nigeria, including in their transactions and dealings with associated enterprises; to provide the Nigerian authorities the tools to fight tax evasion through over or under-pricing of controlled transactions between associated enterprises etc.