Copyright tribuneonlineng
The Federal Government has moved to allay the fears of Nigerians in the diaspora regarding the impact of the new fiscal policy and tax reforms, providing extensive clarity on how foreign income, remittances, and residency will be treated under the revamped laws. Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, in a document obtained on Thursday, clarified a series of concerns, assuring non-resident Nigerians that the reforms are designed to be “fairer and more friendly” and to eliminate the possibility of double taxation. Addressing the critical issue of personal transfers, Oyedele confirmed that money sent back home is not subject to taxation. “No, genuine personal transfers such as family remittances, gifts, refunds (e.g., flight tickets), or community savings contributions are not treated as taxable income,” he stated, emphasizing that “only income earned or deemed to be income (e.g., wages, business profits, investment returns) is subject to tax.” On the fear of paying tax in two jurisdictions, the chairman provided a firm denial. “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,” he clarified. He added that the country utilises Double Taxation Agreements (DTAs) and provides for unilateral relief where no such treaty exists “to ensure that the same income is not taxed twice,” he explained. The official defined tax residency based on the physical presence rule: “Residency is based on the 183-day rule (cumulative days of physical presence in Nigeria within 12 months).” He stressed that non-resident Nigerians are not taxed on their foreign earnings: “Diaspora Nigerians living abroad who are not tax resident in Nigeria are not taxed on their foreign employment or business income.” Their tax obligation is limited only to income derived from Nigeria, such as rental income, dividends, or business profits. Furthermore, remote workers and recipients of foreign stipends and pensions were assured of their tax status, with Oyedele stating that “only income that arises in Nigeria is taxable for non-residents. Pensions and stipends from abroad are not taxed in Nigeria unless received for work done in Nigeria.” For investments in Nigeria, the government bonds, including Sukuk, are entirely tax-exempt. Other investments, such as dividends and rental income, are generally subject to a 10% withholding tax as a final tax. The committee noted that Nigerians abroad do not require a Tax Identification Number (TIN) or need to file annual tax returns “unless you earn employment or business income from Nigeria,” simplifying compliance for those whose income remains foreign-sourced. Oyedele concluded that the overall aim of the new laws is to “align Nigeria with global best practice, simplify and provide clarity where tax is payable or filing obligation is applicable.” ALSO READ TOP STORIES FROM NIGERIAN TRIBUNE
