A new bill termed the Establishment of the Commission and Tribunal The Bill establishes a Federal Competition is being considered by the National Assembly and if passed will impose a 0.5% tax on Profit After tax of businesses.

According to a review of the law by PWC, the bill will establish a Federal Competition and Consumer Protection Commission (“Competition Commission”) to administer the Act and a Tribunal to handle issues and disputes arising from the operations of the Act.

The bill will also usurp some of the major powers of the Security and Exchange Commission such as approving mergers and will chargeable by other regulators for license applications, processing and issuance.

A recent tax alert from PWC threw more insight into several aspects of the law which you can read below;

Overview

The Bill applies to all businesses and all commercial activities within, or having effect within Nigeria and extends to undertakings in which the Federal, State or Local Government or any of their agencies have a controlling stake.

Highlights

Establishment of the Commission and Tribunal The Bill establishes a Federal Competition and Consumer Protection Commission (“Competition Commission”) to administer the Act and a Tribunal to handle issues and disputes arising from the operations of the Act.

Anti-Competition

The Bill prohibits agreements made to restrain competition such as agreements for price fixing, price rigging, collusive tendering etc. (with specific exemptions for collective bargaining agreements, employment, etc.).

Merger Applications

The Bill repeals the provisions of the Investment and Securities Act relating to mergers (effectively stripping the Securities and Exchange Commission of its power to approve mergers) and places the responsibility of approving merger transactions on the Competition Commission.

Payment from Other Regulators

If passed into Law, the Competition Commission would be entitled to receive a percentage of all the fees chargeable by other regulators for license applications, processing and issuance.

Regulated Prices

The Bill empowers Nigeria’s President to regulate the prices of certain goods and services on the recommendation of the Competition Commission.

Tax, Fines and Penalties

The Bill prescribes very stringent fines for non-compliance. A general fine imposed by this Bill for offences committed by companies is an amount up to 10% of the company’s annual turnover in the preceding business year. There are also indications that the updated version of the Bill imposes a tax of 0.5% of after-tax profits on all companies in Nigeria payable to the Competition Commission.

Takeaway

Some regulatory agencies have consumer protection oversight, and the ISA has provisions on competition, this Bill seeks to supersede such other regulations in Nigeria on the subject and will apply to all sectors of the economy.

The SEC and other agencies such as the Standards Organisation of Nigeria, the National Agency for Food, Drugs Administration and Control, which appear to have overlapping functions with the proposed Commission need to be carried along to ensure its smooth implementation if passed into law.

Given that anti-competition functions are currently being performed by various agencies, the existing source of funding should be redirected to the propose Commission rather than imposing a new tax which will increase the cost of doing business.

The National Assembly recently passed the Federal Competition and Consumer Protection Bill which is aimed at promoting a competitive market and protecting consumer rights.

 

Get the original publication from PWC here

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1 COMMENT

  1. Too many cooks stirring the stew.i have just read Hassan sommunu. words who is,one of Nigerian labour movement leader,he said the causes of lack of employment is the causes of lack of security and it’s ugly head,boko haram,fulani herdsmen,christians against moslem in kaduna state.
    Taxes after profit and what is for or why ?is this new proposed tax after profit after company or personal tax ?is this new tax aka sales tax / or vat ?
    In Nigeria,we have instiute of taxation,and most Nigerian chartered accountant are members of this instiute of taxation,and they cannot devises a form of tax in Nigeria for what it’s purposes is it for ?WHAT IS ON THE GROUND IN NIGERIA,WE NEED NEW TAXES IN NIGERIA,from all level of the executive arms of the govt.IS new tax is for to controls inflation as some form of tax could be a form of controlling the supply of money,eg cbn monetary policies is not enough or not effective in controlling inflation in Nigeria.is this taxation to balancing the economy ?is it for up-lifting the process of engising the macroeconomy ? is it for creating a form of having or creating equal opportunity in Nigeria,or up -lifting the poor in Nigeria.
    This new tax could be equitable,as most rich are willing to pay some form of tax,which is a form social obligation.damn all of them

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