Did you know that the exemption of bonds and short-term government securities from income tax granted by the Federal Government by an Order dated 2nd January 2012 has expired?
The Federal Government of Nigeria (FGN) by the Companies Income Tax Exemption Order, 2011 dated 2nd January 2012 exempted the following from income tax for a period of 10 years –
- short term FGN securities, such as treasury bills and promissory notes;
- bonds issued by Federal, State and Local Governments and their agencies;
- bonds issued by corporate bodies including supra-nations; and
- interest earned by holders of the bonds and short-term securities listed in paragraphs (a) to (c) above.
The exemption has now expired, and the Federal Inland Revenue Service (FIRS) vide a public notice informed the taxpaying public of the expiration of the exemption. Accordingly, income tax would apply to income derived by companies from the above listed bonds and short-term securities effective 2nd January 2022, except for bonds issued by the FGN.