A Season of Change – Riding the Waves (1)

Welcome to the round up of H1 2023! Many new events have occurred over this first half of the year and we as business owners, breadwinners, community supporters, have to stay abreast of these changes and adapt our processes to meet the new demands.

While we still have half of the month of June ahead of us, let’s have a look at some of the changes we have seen so far in 2023 and what it can mean for us:

A. New Finance Act 2023

B. Floating of FX Rate

C. Digital Assets – Cryptocurrency, E-Naira

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Before we dive into these, a quick reminder on filing of tax and audited financials. As existing companies know (companies that are not newly incorporated), all companies with accounting year end of 31 December 2022, have a looming deadline of 30 June 2023 for filing their Companies Income Tax (CIT) and filing their audited financials with the Corporate Affairs Commission (CAC).

As you prepare for this, remember to keep your audits clean and your records in safe, accessible locations; ensure you file the correct records and file ON TIME on the required electronic platforms, as well as physically – if required – with both the tax authority and the CAC.

Filing correctly and filing on time save you from unwanted penalties and fines that eat into our already tight budgets in this highly inflationary climate.

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A. New Finance Act 2023

Signed into law on 28 May 2023, the Finance Act 2023 makes amendments to a number of existing laws. Specifically, the Capital Gains Tax Act, Companies Income Tax Act, Customs and Excise Tariffs Etc. (Consolidated) Act, Personal Income Tax Act, Petroleum Profit Tax Act, Stamp Duties Act, Value Added Tax Act, Corrupt Practices and other Related Offences Act, Tertiary Education Trust Fund (Establishment) Act, Public Procurement Act and Ministry of Finance (Incorporated) Act.

Let’s look at a few of these amendments.

For entities that are required to withhold / collect VAT, the date for VAT remittance has been changed from 21st of the month following the reporting period to 14th of the month following the reporting period, with effect from June 2023 i.e., while VAT on all qualifying transactions in May 2023 is to be filed on or before the 21st of June 2023, all VAT withheld or collected in June 2023 are to be remitted to the FIRS on or before the 14th of July 2023.

The new Tertiary Education Tax (TET) rate (up from 2.5% to 3% in the new Finance Act 2023) however, becomes effective in respect of accounting periods ending ON or AFTER 1 July 2023.

Reconstruction Investment Allowance on purchase of plant and machinery and Rural Investment Allowance, have been deleted from the Companies Income Tax Act. These changes take effect on tax returns for accounting periods ending ON or AFTER 1 July 2023.

What do these changes mean for us? Update your calendars and revise your templates / systems for tax calculation and allowances. Educate your teams, management and Boards on these changes and prepare simulations of the impact of these changes on your financial records. Stress test the impacts of fines and penalties and ensure you operate within your risk limits.

Change can be daunting, but it can also be a positive growth experience. Be at the front of the change, don’t play catch up.

Your online, virtual accountant and risk management team are ever ready to support you in managing and optimizing your financial and reporting needs.

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