The drive to increase government revenue through tax collection will not likely abate in the years to come as revenue from oil, which the government had been heavily depended on in the past is constantly declining.

The government has further confirmed this position in recent times through its tax amnesty programmes and other policies. The Voluntary Assets and Income Declaration Scheme (VAIDS) was extended by three months to June 30, 2018, in order to draw more taxpayers into the tax net, while the Voluntary Offshore Assets Regularisation Scheme (VOARS), signed into law by a presidential executive order on October 8, 2018, targets Nigerians who own offshore companies to encourage voluntary tax compliance. Currently in force, VOARS shall remain effective until October 2019. The recently published new transfer pricing rules which prescribed heavy penalties on tax defaulters also indicate that the government is focusing more on tax as a major source of revenue. The government aims at increasing the tax-to-GDP ratio from 6% to around 10-15%.

The implementation of VOARS, coupled with the various multilateral competent authority agreements on automatic exchange of financial information already enforced in Nigeria, will also impact the tax compliance drive. VOARS is expected to record appreciable success similar to VAIDS, which was formally launched by the federal government on June 29, 2017.

While we believe that all taxpayers may not be immediately affected, it is advisable that taxpayers should undergo an internal review of their records on the components of their offshore assets and income and ascertain that they are not at default either by not fully disclosing, not fully paying or not fully remitting taxable income and taxes due to the relevant tax authorities.

In the same spirit, following the signing of the Multilateral Competent Authority Agreement on January 27, 2016, Nigeria has recently published Country-by-Country Reporting (CbCR) Regulations 2018 which will allow for the exchange of relevant information of OBG would like to thank Grant Thornton for its contribution to THE REPORT Nigeria 2019 multinational enterprises (MNEs) activities in order to combat transfer mispricing, base erosion and profit shifting by MNEs. The CbCR Regulations became effective on January 1, 2018 and have the following key provisions:

• MNE groups whose ultimate parent entity (UPE) is a tax resident in Nigeria are required to file an annual CbCR with the Federal Inland Revenue Service (FIRS).

• The deadline for filing shall not be later than one year after the end of each accounting period to which the reports relates.

• Information required for each constituent entity in the jurisdiction of tax residence where the entity operates shall be: a) Amount of revenue; b) Profit or loss before income tax; c) Income tax paid; d) Income tax accrued; e) Stated capital; f) Accumulated earnings; and g) Number of employees.

• Tangible assets other than cash or cash equivalent;

• The UPE of MNE groups headquartered in Nigeria with consolidated revenue of N160bn ($517.3m) and above shall submit a CbCR with FIRS.

• Where the UPE of an MNE group is not a tax resident in Nigeria, the constituent entity that is a tax resident is required to file the CbCR. This may not be the case where another constituent entity has been appointed to file a CbCR on its behalf.

• A qualifying Nigerian tax resident is also required to notify FIRS of the identity of the entity within the MNE group that will file the CbCR, while the deadline to submit the notification shall not be later than the last day of the reporting accounting year of the MNE group.