Journal • CITN Journal

Editorial Board

Editor-in-Chief

Professor Rafiu Oyesola Salawu

Department of Management & Accounting, Faculty of Administration, Obafemi Awolowo University, Ile-Ife

Managing Editor

Professor Godwin Emmanuel Oyedokun

Department of Management & Accounting, Lead City University, Ibadan, Nigeria

Editorial Board Secretary

Mary-Fidelis Chidoziem Abiahu

Director, Research and Professional Standard, Chartered Institute of Taxation of Nigeria

Editorial Board Members

Professor Chinedum Nathaniel Nwezeaku

Federal University of Technology, Owerri

Professor John Adeoti

Nigeria Institute of Social and Economic Research (NISER), Ibadan

Professor Uche Jack-Osimiri

Faculty of Law, River State University, Port Harcourt

Professor Aruwa Suleiman Akwu-Odo Salihu

Nasarawa State University, Keffi Nasarawa State Nigeria

Dr. Eiya Ofiafoh Ofiafoh (Associate Professor)

Department of Accounting, University of Benin, Benin City, Nigeria

Dr. Stephen Chukwuemeka Mark Abani

MCSA Worldwide Projects Limited, Abuja, Nigeria

Dr. Kenny Adedapo Soyemi

Department of Accounting, Olabisi Onabanjo University, Ago Iwoye, Ogun State, Nigeria

Professor Joseph Uchenna Uwaleke

Department of Banking & Finance, Nasarawa State University, Keffi Nasarawa State, Nigeria

Barrister Chukwuemeka Eze

Faculty of Law, Nasarawa State University, Keffi Nasarawa State, Nigeria

Mr. Simon Nwanmaghyi Kato

Federal Inland Revenue Service, Chairman’s Office, Abuja, Nigeria

ARE THE TRANSFER PRICING REGULATIONS A CLOG TO BUSINESS SUSTAINABILITY IN NIGERIA?

Description

ARE THE TRANSFER PRICING REGULATIONS A CLOG TO BUSINESS SUSTAINABILITY IN NIGERIA?

Authors

Adewusi, Adefolake and Quadri, Moshood

Abstract

Nigeria's population of over 190 million and its continuously expanding consumer market have made it an investment destination of interest to foreign investors for some time due in part to its low corporate taxes relative to other countries. The Income Tax (Transfer Pricing) Regulations 2018 provide guidance on the application of the arm's length principle in related-party transactions which would typically involve a Nigerian incorporated entity and its foreign affiliate. The 2018 TPRegulations which replaced the 2012 version, introduced a regime of specific administrative penalties for noncompliance with the filing of TPforms and documentations. The objective of this paper is to determine whether the TPRegulations are a clog to business sustainability in Nigeria. This paper finds that the TP Regulations where enforced to the letter, may stifle the Nigerian business environment and proposes that in order not to clog operations of small and medium-sized businesses, the right of the Federal Inland Revenue Service (FIRS) to require submission of TP documentation by companies with a controlled transaction value of less than N300 million should be activated only in the most deserving of circumstances. The paper also proposes that large businesses within the TP Regulations net, should proactively prepare their TP returns ahead of their audited accounts to anticipate and address TP issues that could be flagged by FIRS in its review of the audited accounts.

Keywords: