Constitutional implications of Finance Bill 2024

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Nigeria's independent online newspaper

The constitutional validity of the Finance Bill 2024 which imposes a windfall tax of 70% on the realised profit from all foreign exchange transactions of banks and other financial institutions in the 2023 financial year raises significant concerns. Likewise, the Appropriation Bill which seeks to amend the principal act to provide and inject N6.2 trillion into the Appropriation Act also raises important questions.

There is an interesting and relevant decision of the federal high court that has an impact on this discussion; the case ofThe plaintiff in this matter received a corporate income tax assessment from the Federal Inland Revenue Service for the year 2019, based on amendments in the Companies Income Tax Act under the Finance Act 2019 . FIRS applied a minimum tax rule for companies with over N25 million turnover, but the plaintiff argued they were exempt under the old CITA, as they had 99.

As a result of this decision, it appears that the national assembly, in the new Finance Amendment Act, introduced a clause that purportedly addresses the defect highlighted in the Accugas case to seemingly comply with the decision of the federal high court. The Finance Act 2024 inserted a commencement clause intended to apply the Act retrospectively, but it did not clearly set out a retrospective clause.

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Company income tax paid by local firms surged by 249% in Q2 2024Tax payments from local companies in Nigeria saw a massive 249.2 percent jump in Q2 2024, according to the latest company income tax (CIT) report by the NBS.
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