The President of Nigeria, Bola Ahmed Tinubu, on July 6, 2023 signed four Executive Orders.
The Orders changed and reversed some policies made by the Buhari led administration to bring temporary relief to Nigerians. Additionally, the executive orders mean Nigerians would not have to pay more for certain critical goods and services.
Breakdown of the Executive Orders (What you should know)
Finance Act Order 2023
The Finance Act 2023 was signed by former President Buhari during his administration and the effective date stated was May 1, 2023.
However, the new order signed by President Bola Ahmed Tinubu postponed the effective date to September 1, 2023.
The 2023 budget speech states that the Act focuses on:
=> tax equity reforms
=> climate change/green growth
=> job creation/economic growth
=> reforming tax incentives
=> revenue generation/tax administration
Key Changes in Finance Act Order 2023
=> Taxation of gains on the disposal of digital assets including cryptocurrency at the rate of 10 percent
=> Deletion of investment allowance on plant and equipment
=> All services including telecommunication services are liable to excise tax at rates to be prescribed by the president
=> Imposition of 0.5 per cent levy on goods imported into Nigeria from outside Africa
=> Companies appointed to withhold Value Added Tax (VAT) at source are to remit such VAT to the Federal Inland Revenue Service (FIRS) on or before the 14thday of the following month among others.
Customs Excise Tariff (Variation) Amendment Order 2023
The president under this Order moved the commencement date of the Customs and Excise Tariff from March 27, 2023, to August 1, 2023.
The tax changes in the customs excise tariff include an increase in excise duty on alcoholic beverages. The previous administration also introduced an excise duty of N10 per litre on aerated water, beer, and alcoholic wines and stout, whisky, brandy and vodka.
5 Percent Excise Tax on Telecommunication Services Order
In Nigeria, the telecommunication excise tax took effect on April 1, 2022, with a 90 days grace period granted for the implementation. Based on the order, the tax is chargeable on all services regulated by the Nigerian Communications Commission (NCC) listed as prepaid and postpaid services at the rate of five per cent for 2022, 2023 and 2024 but the newly signed executive order by the president suspends the 5 per cent telecommunication excise tax.
Note: Excise duty is a tax on certain goods produced or sold within a country and other activities as may be specified in the enabling law including services.
Green Taxes Suspension Order
The Buhari administration introduced a 10 per cent excise duty on Single Use Plastics (SUPs) such as plastic containers, films, and bags but President Tinubu suspended the tax in order to create a business-friendly environment for Nigerians.
Summary list of the Four (4) Executive Orders
- The Finance Act (Effective Date Variation) Order: This order deferred the date of commencement that was contained in the Act from May 23, 2023, to September 1, 2023.
- Customs Excise Tariff Amendment Order, 2023: The President’s new executive order, which moved the commencement of the date of tax changes from March 27, 2023, to August 1, 2023.
- 5% Excise Tax on Telecomm. suspended: The president also signed an executive order that stopped the 5% Excise Tax on telecommunication services and the excise duty on locally made products. Suspension of
- Green Tax: The newly introduced Green Tax on single-use plastics and Import Tax Adjusted levy on certain vehicles were suspended by President Tinubu.
