Abuja — A new bill seeking to abolish Nigeria's involvement in double taxation with South Korea, Spain and Sweden was on Tuesday sent to the Senate by President Muhammadu Buhari.
Specifically, the bill seeks to promote trade relations between Nigeria and any of the three countries by ensuring that any businessman and woman involved in trade relations within the countries will only be taxed in just one country.
Explaining the objective of the bill in a letter addressed to Senate President Bukola Saraki, Buhari said any businessman involved in business between Nigeria and Sweden for instance, could only be taxed in one of the two countries while he enjoys tax holiday in the other country.
He explained further that Nigeria entered into an agreement with the three countries between 2004 and 2009, noting that domesticating the agreement had become imperative if it must secure the force of law. He added that the bill would stimulate foreign direct investment in Nigeria.
The letter read: "The Senate is invited to note that agreements for the avoidance of double taxation between countries facilitate inter-states trade, economic and business activities as well as enable prospective investors to know the income tax obligation in each country and tax incentives available. They also ensure stable and reliable tax regimes and improve the cooperation between tax authorities through exchange of information among others.
"Pursuant to the above, the Federal Government of Nigeria entered into agreement for the avoidance of double taxation with the Kingdom of Sweden, Republic of South Korea and Kingdom of Spain which were duly executed on November 18 2004, November 6, 2006 and June 23, 2009 respectively after series of negotiations between Nigeria and each of these countries.
"For the agreements to be enforceable in Nigeria, they must be domesticated in line with the provisions of section 12 (1) of the constitution of the Federal Republic of Nigeria 1999 (as amended) which states that no treaty between the federation and any other country shall have the force of law to the extent that such treaty has been enacted into law by the National Assembly.
"Bearing in mind the interest of Nigeria and each of the three countries to these agreements vis-a-vis the economic vision of this governmnt, the coming into the force of these agreements will no doubt facilitate the interchange of direct foreign investment."