As part of the process to improve the Nigerian tax environment and promote fiscal equity and uniformity in line with global best practices, the Finance Bill 2019 (“the Bill”) was presented to the National Assembly by President Muhammadu Buhari GCFR on 08 October 2019 and was passed by the House of Representative on 28 November 2019.
The Bill is intended to cure incidence of multiple taxation that exist under our tax framework. It seeks to do this by amending sections of our various Tax Laws to bring about uniformity and create an enabling environment to actualize the ease of doing business initiative of the Federal Government.
Efficiency and integrity of the legal process in Nigeria
Nigeria is unarguably the largest economy in Africa with an estimated population of about 200 million. The country operates a federal system of government, which allows devolution of power amongst the Federal Government and the 36 federating States. Patterned after the English legal system, Nigerian laws derive majorly from: (i) Nigerian legislation; (ii) received English laws (comprising Common law, equitable principles and Statutes of General application); (iii) Nigerian case laws (judicial precedent); (iv) Nigerian customary laws; (v) Islamic laws; and (vi) international laws and principles. The applicability of English laws and principles is subject to the provisions of Nigerian legislation and courts’ decisions. The Nigerian Court system is centralised with all appeals from State and Federal High Courts going to the Court of Appeal and then to the final Appeal Court being the Nigerian Supreme Court.
In Nigeria, there was a void in the corporate sector due to the absence of a comprehensive legislation in corporate governance regime. However, this absence was mitigated for by sector-specific corporate codes issued by their respective regulators to address this challenge. In order to consolidate the various codes of different sectors and establish a unified corporate governance framework, the Financial Reporting Council of Nigeria (“FRCN”), released the National Code of Corporate Governance 2016. However this was suspended as there were questions relating to its legality and how it may negatively impact the ease of doing business in Nigeria.