ACQUISITION INTERNATIONAL 35

SECTOR SPOTLIGHT:2012 Corporate Tax Return

2012 CORPORATE TAX RETURN— What can Nigeria and Belarus offer?

The global fiscal crisis has created financial upheaval on an unprecedented scale and still continues to reshape the economic landscape and create complications for most governments and countries around the world. It has taught us all just how closely investments are tied with politics and economics; the financial world moves extremely quickly and it’s essential to have the best and latest financial information to make well-informed decisions about risk and return. Acquisition International speaks to the experts.

Patrick Okonjo and Adetola Lawal are part of Okonjo, Odiawa & Ebie is a fully integrated and multi dimensional business law practice, providing legal services to local and international corporations, governments, institutions and individual clients.

WHAT ARE THE TAX PITFALLS A COMPANY MUST BE AWARE OF IN YOUR JURISDICTION?

Patrick Okonjo: “There are a number of challenges companies will face in Nigeria in terms of taxation. Nigeria has a three tier governmental system made up of the Federal, State and Local government. Unfortunately, this has led to cases of companies being taxed by all these tiers of government over the same matter. It is therefore important that companies get proper advice as to the applicable tax to be paid. Nigeria has double taxation treaties with only 12 countries. Invariably, the country is unable to offer unilateral relief where there is double taxation to a majority of foreign related companies operating within the country. There is also no clarity with regards to a number of tax related issues , for instance , even though the Free Trade zones regulations stipulate for tax exemptions for companies for companies in the zone, in practice it is still not clear exactly what taxes are exempt.”

HAVE THERE BEEN ANY RECENT CORPORATE TAX REFORMS AND TECHNOLOGICAL IMPROVEMENTS TO THE TAX SYSTEM WITHIN YOUR JURISDICTION?

Adetola Lawal: “The Government of Nigeria has continued to take steps to reform its tax administration procedures. It must be pointed out that these reforms apply to both personal and corporate tax. In December 2011, while presenting the 2012 budget, the Government announced a corporate tax waiver on all bonds and debt instruments. It also announced a review of the import duty regime and corporate tax reduction. Policy announcements were also made granting concessions and waivers to companies in social projects and community development. Tax rebates are also been extended to companies that create jobs.”

“Relatedly, technological improvements are also been implemented. Some of the new measures in this regard include;

• Automating the tax process • Issuance of readable tax cards as against paper tax certificates• Increased digitalisation of tax offices across the country.”

HOW CONDUCIVE IS YOUR JURISDICTION’S TAX SYSTEMS AND IS THERE ANY EVIDENCE THE TAX REFORMS ATTRACT INVESTMENT? PLEASE USE EXAMPLES TO ILLUSTRATE YOUR ANSWER.

Patrick Okonjo: “Nigeria offers an interesting investment designation to investors inspite of its shortcomings. The country offers extensive tax holidays, in some instances, up to 5 years to pioneer industry operators and others alike. At the onset of the GSM revolution, in Nigeria , mobile the telephone operators who won licenses to operate in Nigeria including MTN were given tax holidays which ensured that they did not pay tax for several years. The Government has also announced a number of tax related policies which provide for tax rebates in a number of sectors of the economy and the effect has been an increased level of activity by investors in such sectors including the Power and Agriculture sectors. Currently, in few Nigerian states, there is in existence Free Trade zones and Free Trade Zones regulations which provide exemptions to companies registered in the zones on all taxes.”

Company: Okonjo, Odiawa & Ebie Name: Patrick Okonjo / Adetola Lawal Email: pokonjo@gmail.com/ info@ooelaw.netWeb: www.okonjo.odiawaebie.net Address: 11, Raymond Njoku Street, Ikoyi, LagosTelephone: +08062633938

OKONJO, ODIAWA & EBIE

CASE STUDY:STEPANOVSKI, PAPAKUL AND PARTNERS LLC (SPP) SPP offer a full range of legal services for businesses; the firm provides highly qualified legal services to Belarusian and foreign companies with their business start-up, operation and protection in Belarus. In its work, the SPP applies the principle of its staff’s focused expertise, which helps us to promptly respond to their Clients’ requests and solve their issues in a professional manner. Dmitry Kovalchik is a tax practice attorney of the Stepanovski, Papakul and Partners Law Firm. He specializes in taxation of Belarusian and foreign businesses related to their operations in Belarus.The tax practice occupies an important place in the structure of our company. The goal of the Stepanovski, Papakul and Partners Law Firm is to offer highly qualified legal services to their Clients that relate to the issues of business taxation and protection from adverse tax implications. The tax practice believes that their job is to resolve their Clients’ issues, achieve in reality their business goals and tax objectives. SPP commented that often, the reason for addressing

tax consultants in Belarus is the complicacy and ambiguousness of interpretation of the tax legislation. The Belarusian tax legislation may be also characterized as unstable and subject to frequent changes. The tax rates, payment procedures, list of tax benefits are changes, in fact, every year. Meanwhile, the errors made by tax payers in applying the tax legislation would generally entail considerable sanctions from tax and other controlling agencies without any fixed limitations. Speaking about the Belarusian tax system, SSP also mentioned the immaturity of judicial contests with the Belarusian tax agencies. In many cases, courts would side with tax and other controlling agencies, which obstructs successful claims against those agencies’ decisions. Therefore, it is crucial to work on tax issues in advance before the company’s foundation, commitment of a major transaction or adoption of other important executive decisions.The system of taxes in the Republic of Belarus comprises central (Republican) and local taxes. The republican taxes are stipulated in the Tax Code and their payment is mandatory throughout the country. Local taxes, as listed in the Tax Code are set by local authorities, and their payment is mandatory in certain localities.

Company: Stepanovski, Papakul and Partners LLC Name: Dmitry Kovalchik Email: d.kovalchik@spplaw.byWeb: www.spplaw.byAddress: 16 Kuibyshev Street, 4th floor, 220029 Minsk, BelarusTelephone: +375 17 209 44 83

January 2012 /