Nigeria last week signed a Double Taxation Avoidance Agreement, with the Government of Singapore that would enable investors from both countries attract investments through protection from Double taxation in their transactions. The Minister of Finance, Kemi Adeosun, signed the agreement on behalf of the Federal Government, while Singapore’s Minister of State for Trade and Investment, Dr Koh Poh Koon, endorsed the pact on behalf of his government.
Adeosun in her comments said the pact between Nigeria and Singapore has clearly spelt out taxing rights of each other in respect of different income, derived from each country;
The agreement according to the finance minister would facilitate inter-state trade as well as economic and business activities by ensuring that nationals or enterprises of the two countries are not taxed twice on the income from profits derived from the other country.
She added, “This agreement between Nigeria and Singapore will assist prospective investors know their income tax obligation in the other country as well as available tax incentives; and spells out clearly tax jurisdiction of each country in respect of all possible areas of business activities, which give rise to taxation.
“This treaty with Singapore is also important because it is consistent with Nigeria’s on-going efforts to expand its treaty network.”Providing further insights into the agreement, the finance minister explained that the negotiation of the avoidance of double taxation agreement between both countries was held in Singapore from 28th to 30th October 2013, which was concluded in October 2014, after all outstanding issues had been resolved.
She said following the resolution of all outstanding issues, the Federal Executive Council at its meeting of November 16, 2016, approved the content of the agreement and authorised her to sign the agreement on behalf of Nigeria.
Adeosun noted that Singapore was identified as a suitable tax treaty partner for Nigeria, because it is currently one of the fastest growing economies in the world with a highly developed and successful free-market economy.
For instance, she added that the country operates in a remarkably open and transparent environment, with stable prices, and a per-capita Gross Domestic Product that is higher than that of most developed countries.
She explained that relations between Nigeria and Singapore have been on the increase since 2012, adding that this culminated in the first Nigeria-Singapore Business and Investment Forum in 2013.
In addition, she noted that there is a Bilateral Air Services Agreement for cargo services, which has been operating between the two countries since 2012.
She put the volume of trade between the two countries from 2011 to 2015 at N846 billion, where the absolute Balance of Trade was N222 billionn in favour of Nigeria while Balance of Trade net of petroleum export stood at N42 billion in favour of Singapore.
In terms of the volume of Foreign Direct Investment from Singapore to Nigeria, Adeosun said between 2010 and March 2015 the figure stood at $908.8 million.
She listed some of the areas of economic cooperation between Nigeria and Singapore to include consumer electronics, information technology products, pharmaceuticals, and medical technology products, and financial services, among others.
In his comments at the event, the Singaporean trade minister said the agreement would send a strong signal to investors from both countries about the commitments of the two countries to stimulate investments.
“We hope that both governments will happily ratify both agreement so that it sends a strong signal to business communities from both sides that both our governments are committed to ease of doing business.
“This will enable companies to be able to look at investments from both sides with seriousness,” Koon added.Recall that last November, the Federal Executive Council approved a bilateral agreement for the avoidance of double taxation in business deals between Nigeria and Singapore.
The approval, ratified at the 22nd meeting of FEC, presided over by Vice President Yemi Osinbajo, would also prevent tax evasion on income and capital benefits between Nigeria and Singapore.