Nigerians in the diaspora have been seeking clarity on the implications of the country’s new tax reform laws. In response, the Presidential Committee on Fiscal Policy and Tax Reforms has issued a set of frequently asked questions and answers to address concerns. According to Taiwo Oyedele, a member of the committee, the new laws aim to make the tax system fairer and more friendly to Nigerians abroad.

One of the key concerns addressed is the taxation of remittances sent to Nigeria. Oyedele clarified that genuine personal transfers, such as family remittances, gifts, and community savings contributions, are not subject to tax. Only income earned or deemed to be income, such as wages, business profits, and investment returns, is taxable.

The new laws also exempt income earned abroad and brought into Nigeria by non-resident individuals from tax, regardless of whether tax was paid abroad or not. This move is expected to alleviate concerns about double taxation, which has been a major issue for Nigerians living and working abroad. Nigeria has Double Taxation Agreements (DTAs) with several countries, and the new tax laws provide for unilateral relief where a DTA does not exist.

In terms of tax residency, the 183-day rule applies, and non-residents are taxed only on income derived from Nigeria. Diaspora Nigerians living abroad who are not tax resident in Nigeria are not taxed on their foreign employment or business income. Dual citizenship has no impact on an individual’s tax status, whether resident or non-resident in Nigeria.

The new laws also provide clarity on investments, such as stocks, real estate, and bonds. Generally, income from investments in Nigeria is either exempt, subject to capital gains tax, or withholding tax as a final tax. Government bonds, including Sukuk, are tax-exempt, while dividends, non-government bond interest, and rental income are subject to withholding tax at 10% as final tax.

For Nigerians in the diaspora who require a Tax Identification Number (TIN), it can be obtained from the Joint Tax Board via tin.jtb.gov.ng. The new laws also provide incentives for diaspora-led investments in key sectors, such as agriculture, creative sector, and manufacturing.

The reforms aim to make the tax system in Nigeria more transparent and accountable, with measures in place to prevent corruption and ensure that tax revenues are used effectively. The government has also strengthened fiscal measures to link tax revenues to visible infrastructure and service delivery.

Overall, the new tax reform laws are expected to have a positive impact on Nigerians in the diaspora, addressing concerns about double taxation and providing clarity on tax obligations. The laws also aim to promote investments and economic growth in Nigeria, while ensuring that the tax system is fair and transparent.