FEC okays agreement to eliminate double taxation between Nigeria, UAE

Temitope Mustapha and Timothy Choji, Abuja

Last updated Jan 18, 2024

The Nigerian government has given approval to the signing of an agreement between Nigeria and the United Arab Emirates (UAE).

The approval is in respect of the elimination of double taxation as regards taxes on income and the prevention of tax evasion

The approval was given on Wednesday during the first Federal Executive Council (FEC) meeting for the year 2024, presided by President Bola Ahmed Tinubu at the Presidential Villa in Abuja, the nation’s capital.

The Council directed the Attorney General of the Federation, Lateef Fagbemi to work out an executive bill to deal with the issue of double taxation, to help Nigerian industries and encourage the flow of Foreign Direct Investment.

According to Fagbemi, “You’ll recall that a while ago, the president was in the United Arab Emirates. And one of the matters that came up for discussion and negotiation is the agreement for the elimination of double taxation with respect to taxes on income, and prevention of tax evasion and avoidance.⁣

“One of the major issues discussed was the issue of double taxation encouraging foreign direct investment. This time around, it’s about the relationship between the Nigeria and the United Arab Emirates.

“The Council noted that the agreement between both countries, that is, between Nigeria and the United Arab Emirates include personal income tax, company income tax, petroleum profit tax, information technology levy, tertiary education tax and capital gain tax. Because of the effect of this cooperation or the benefits that will accrue to Nigeria, the council agreed and directed that the agreement that had been signed already should be taken further by mandating authorising the Attorney-General and Minister of Justice to prepare a bill along this line to take to the National Assembly for ratification. “The Attorney General added.

Fagbemi further made known that FEC also approved the ratification of the agreement between Nigeria and the UAE on the reciprocal promotion and protection of investments.

Trade Agreement With UAE

The Council endorsed that the Investment Promotion and Protection Agreement (IPPA) between Nigeria and the United Arab Emirates be ratified by the National Assembly.

The Minister of Industry, Trade and Investment, Dr Doris Uzoka-Anite who disclosed this while briefing Journalists said this is to formalise the pact by the two countries as required by law.

“Council approved the ratification of the Investment Promotion and Protection Agreements (IPPA) between Nigeria and the UAE. With the approval, we can now send the already-signed IPPA to the National Assembly for ratification,” she said.

The Minister said she was directed to invoke a section of the agreement that will enable Nigeria make amendments to the treaty when the need arises.

“The council also approved that the Minister for Industrial Trade or Investment should also immediately invoke Article 26 of that agreement, which mandates that we can review and amend some sections of the IPPA to conform with the current IPPA model that we’re using, which is a 2016 model. So that has been approved for ratification and we will immediately proceed to invoke the section that will enable us to review and amend the sections that were not originally viewed to be favorable,” the Minister added.

Taxes

The Minister of Trade, also revealed that the Council deliberated on the rising cost of food items and the ease of doing business in the country, with a view to ameliorate the situation.

“Today Council noted the rising cost of goods and services in the country, as well as the rising cost of doing business in Nigeria and also noted the excitement and optimism of the real sector that the Renewed Hope Agenda will bring a prosperous 2024.

“We deliberated on how we can actually improve the business environment for manufacturers and industrialist. As you’ll recall, the priority of this government is to promote and protect local industries and manufacturers and this will mean that we must do all that is necessary to remove all the roadblocks and bottlenecks impeding or impacting business,” she stated.

Dr Uzoka-Anite went on to explain the steps being taken by the government to address the situation.

“As you’ll recall, the President already set up the Presidential Council on Industrial Revitalization, as well as the Presidential Council on Fiscal Reform and Tax Policy Review. The Presidential Council on Industrial Revitalization was set up in October and the Presidential Council on Fiscal Policy and Tax Review was set up in July 2023.

“His Excellency now mandated that this council must fast-track their reports and their reviews and come up quickly with their recommendations so that the real sector and the citizens can begin to feel the impact of the Renewed Hope Agenda.

“As you will recall, the Presidential Council on Industrial Revitalization includes the following: the Committee on Consumer Credit, Committee on Artisan Certification and Licensing, Committee on Trade Facilitation, Committee on Commodity Exchange, Committee on Mining and Solid Minerals, Committee on Oil and Gas, Creative Economy, Steel and Heavy Industries and now Healthcare has also opted to join the Presidential Council, as well as the Committee on MSMEs.

“The Federal Executive Council noted that when this committee finalizes its review and comes up with its reports, that we will be implementing policies that will jumpstart the economy again and see us experiencing a double-digit growth rate in the GDP, as well as being on track to achieve the vision of His Excellency to achieve a $1 trillion economy,” she explained.