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NIS Requires Expatriates to Present Evidence of Tax Payment for Renewal of Permits

Apr 11, 2021   •   by   •   Source: Proshare   •   eye-icon 1424 views

Sunday, April11, 2021 05:35 AM / by Wole Obayomi / Header ImageCredit:  FT

 

The Comptroller General of the Nigeria ImmigrationService, Mr. Muhammad Babandede, (CGNIS) has directed that effective from 1April 2021, all expatriates, including nationals of the Economic Community ofWest African States, must present evidence of tax payment in order to renewtheir resident and work permits by the Nigeria Immigration Service (NIS). This directive is in the exercise of the powers conferred on him by Sections 37and 39 of the Immigration Act, 2015.

 

Therefore, all applications for renewal of residenceand work permits must, in addition to other requirements, include copies ofvalid tax clearance certificates (TCCs), Personal Income Tax (PIT) remittanceschedules and evidence of payment of PIT due before the application can beprocessed.


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Comments

The CGNIS' decision to include submission of evidenceof tax payments as part of the requirements for renewal of residence and workpermits of expatriates working in Nigeria aligns with the government's drivefor tax compliance in Nigeria.

 

The new directive may affect the R11 Temporary WorkPermit (TWP) visa which allows foreign nationals to reside and work in Nigeriatemporarily for up to 6 months.  Although the process for the issuance ofthis category of visa is yet to commence at the Nigerian Missions Abroad, weexpect the NIS to issue further clarification in this regard.  Meanwhile,the NIS may need to review its directive to ensure consistency with Section10(1) of the Personal Income Tax Act (PITA), as amended, which exempts the incomeof an expatriate, who is employed temporarily in Nigeria (i.e., under a TWP),from tax where:


  • the duties of his employment are performed on behalf of a non-resident employerand his remuneration is not charged to the fixed base of the company in Nigeria;
  • he is not in Nigeria for an aggregate of 183 days or more in any twelve monthperiod; and
  • his income is taxable in the country of his employer. 

 

Consequently, such expatriates who are eligible forincome tax exemption under Section 10(1) of the PIT Act should not be requiredto present evidence of tax payments when renewing their TWP.  Otherwise,the NIS will be imposing a tax obligation where none exists in the taxlaw.  It is hoped that the NIS will be guided accordingly.

 

Credits

* Thisstatement was first published in the Issue 4.3/ April 2021 Newsletter of KPMGof Friday, April 09, 2021. For further enquiries, please contact the author, Wole Obayomi via [email protected]


 Proshare Nigeria Pvt. Ltd.


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Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.

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