Nigeria – Expatriates Required to Prove Payment of Tax for Permits Renewals

NG – Tax Payment Proof Needed for Permits Renewals

Under new rules in Nigeria, effective from 1 April 2021, all expatriates, including nationals of the Economic Community of West African States, must present evidence of having made a tax payment in order to renew their resident and work permits by the Nigeria Immigration Service (NIS).

1000

CONTACTS

Related content

flash-alert-2021-112

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

WHY THIS MATTERS

Employers of foreign nationals coming to work in Nigeria, their global mobility managers, and immigration counsel should be aware that all applications for renewal of residence and work permits, in addition to other requirements, must include copies of valid tax clearance certificates (TCCs), Personal Income Tax (PIT) remittance schedules, and evidence of payment of PIT due before the application can be processed.  This could mean additional steps and documentation-gathering and coordination for those employers, employees, global mobility managers, and immigration counsel.

KPMG NOTE

The CGNIS’ decision to include submission of evidence of tax payments as part of the requirements for renewal of residence and work permits of expatriates working in Nigeria aligns with the government’s drive for tax compliance in Nigeria.

The new directive may affect the R11 Temporary Work Permit (TWP) visa which allows foreign nationals to reside and work in Nigeria temporarily for up to six months.  Although the process for the issuance of this category of visa is yet to commence at the Nigerian Missions Abroad, we expect the NIS to issue further clarification in this regard. 

Meanwhile, the NIS may need to review its directive to ascertain consistency with Section 10(1) of the Personal Income Tax Act (PITA), as amended, which exempts the income of 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 nonresident employer and 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 12-month period; and
  • his income is taxable in the country of his employer. 

Consequently, such expatriates who are eligible for income tax exemption under Section 10(1) of the PIT Act should not be required to present evidence of tax payments when renewing their TWP.  Otherwise, the NIS will be imposing a tax obligation where none exists in the tax law. 

FOOTNOTE

1  This development was announced in a press briefing in Abuja on 31 March 2021, with remarks from Comptroller General of the Nigeria Immigration Service, Mr. Muhammad Babandede.  For an additional report, see M. Olugbode, "No Renewal of Resident Permit without Proof of Tax Payment, Says NIS Boss," This Day (online), 1 April 2021 (https://www.thisdaylive.com/index.php/2021/04/01/no-renewal-of-resident-permit-without-proof-of-tax-payment-says-nis-boss/ ).  (Note that this is a 3rd party (non-governmental, non-KPMG) website. Providing this link does not represent an endorsement of this website by KPMG.)

RELATED ARTICLE

This article is excerpted, with permission, from Regulatory Alert (Issue 4.3/ April 2021), a publication of the KPMG International member firm in Nigeria.

*  Please note that KPMG LLP (U.S.) does not offer immigration services or labour law services. However, KPMG Law LLP in Canada can assist clients with U.S. immigration matters.

The information contained in this newsletter was submitted by the KPMG International member firm in Nigeria.

SUBSCRIBE

To subscribe to GMS Flash Alert, fill out the subscription form.

© 2022 KPMG Professional Services, a partnership registered in Nigeria and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.


For more detail about the structure of the KPMG global organization please visit https://home.kpmg/governance.

Flash Alert is an Global Mobility Services publication of KPMG LLPs Washington National Tax practice. The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

Connect with us

 

Want to do business with KPMG?

 

loading image Request for proposal

Stay up to date with what matters to you

Gain access to personalized content based on your interests by signing up today

Sign up today