Presidency Announces Plan to Tax Foreigners Earning in Nigeria

The Nigerian government has announced plans to tax foreigners earning income within the country under a proposed amendment to the National Identity Management Commission (NIMC) Bill, 2024. This was revealed by Mr. Bayo Onanuga, Special Adviser to the President on Information and Strategy, during a media briefing in Abuja on Wednesday.

Onanuga explained that the proposal is part of the Economic Stabilisation Bills recently approved by the Federal Executive Council (FEC) and will soon be forwarded to the National Assembly for legislative consideration. The bills aim to address various economic challenges and include amendments to several existing laws.

“The amended NIMC bill will mandate that all residents in Nigeria, including foreigners, be registered and assigned a tax identity,” Onanuga stated. “Once this is in place, anyone earning income in Nigeria will be required to pay taxes under our system. Previously, foreigners were exempt from this registration and thus were not taxed,” he added.

In addition to the NIMC bill, Onanuga highlighted another key amendment aimed at revising the financial operations of the Nigerian Maritime Administration and Safety Agency (NIMASA) and the Nigerian Ports Authority (NPA). Under the new proposal, these agencies will charge fees, levies, and fines in Naira, rather than U.S. dollars, using the applicable exchange rate.

“Currently, these agencies charge exclusively in dollars. However, the new amendment aims to promote the use of our national currency by requiring payments to be made in Naira. This is part of the government’s broader effort to reduce the dollarisation of the economy,” he said.

Onanuga also discussed changes to the Tertiary Education Trust Fund (TETFUND) as part of the Economic Stabilisation Bills. A proposed amendment to the TETFUND Act would see 30% of the fund’s revenues allocated to the Nigerian Education Loan Fund. This amendment is expected to provide sustainable funding for student loans.

“The government has been keen on addressing how it will fund student loans. By redirecting a portion of TETFUND’s revenue, a ready-made source of financing for the Nigerian Student Loan Fund has been created,” Onanuga explained.

The Federal Executive Council’s approval of the Economic Stabilisation Bills is seen as a significant move towards improving Nigeria’s fiscal policies. The bills include amendments to key legislation such as the Foreign Exchange Act, the Companies Income Tax Act, and the Fiscal Responsibility Act, aimed at fostering a more stable and conducive economic environment.

The National Assembly is expected to deliberate on the bills in the coming weeks.