Investor Presentaiton

The Country and its institutions Business Organisation and Regulation Labour and Social Security Regulations The Nigerian Financial Tax System Services Industry Foreign Exchange Transactions Investment in Nigeria Accounting and Auditing Requirements Importation of Goods Exportation of Goods COVID-19 - Economic and Fiscal Measures 3.12 Contributory Pension Scheme (CPS) The Pension Reform Act (PRA), 2004 was amended in 2011 by the PRA (Amendment) Act, 2011, and was repealed and re-enacted as the PRA, 2014 on 1 July 2014. The PRA introduced mandatory contributory pension schemes with Pension Fund Administrators (PFA) and Pension Fund Custodians (PFCs) operating as pension fund managers and custodians of pension fund assets, respectively. The Act requires employees (except those exempted from the Scheme) to maintain a Retirement Savings Account (RSA) with a PFA of their choice. The rates of contribution for the employee and employer in the private sector are a minimum of 8% and 10%, respectively. The rates are applicable to the employee's monthly emoluments (the total emoluments as may be defined in the employee's contract of employment, but which shall not be less than a total sum of basic salary, housing allowance and transportation allowance). However, where an employer chooses to contribute 18% of the employee's monthly emoluments, the employee may not be required to make any contribution. In addition to making monthly pension contributions, an employer is also required to maintain a group life insurance policy for each of its employees for a minimum of three times the annual total emolument of the employee. Specific provisions are made for permissible forms of withdrawal from the RSA under the PRA. From the age of 50 years, withdrawals can be made by way of programmed monthly or quarterly withdrawals, annuity purchased from a life insurance company, or a lump sum withdrawal (provided that the balance left after the lump sum withdrawal is enough to finance a programmed fund withdrawal or annuity for life). The PRA allows individuals to make additional voluntary pension contribution (VC) above the statutory limit and the VC is available for withdrawal subject to certain conditions. Where the VC is withdrawn within five years of contribution, the amount withdrawn may be liable to income tax. To curb the abuse of VC withdrawals for tax planning purposes, PENCOM issued a set of Guidelines in 2017 to provide the modalities for contribution and withdrawal of VCs for various classes of contributors. This was followed by another set of Guidelines in 201830 to further increase the participation base for pension contributions, and to address the quantum of monthly voluntary contributions and the amount that can be withdrawn by active contributors. 30 https://www.pencom.gov.ng/wp-content/uploads/2018/10/guidelines-for-voluntary-contributions-under-contributory-pen- sion-scheme.pdf KPMG How we can support you KPMG in Nigeria meets the increasing needs of our clients for outsourcing their non-core business functions through our people services team. We relieve our clients of the burden of dealing with regulatory agencies to enable them focus on their core business. Our services include: • Tax Compliance Management - - Compliance services Review/completion and submission of VAT registration forms. - Registration on FIRS' online filing portal - Taxpro max Review/computation of the monthly VAT and WHT liabilities Review/completion and submission of VAT and WHT returns Obtaining LIRS bulk receipts and credit notes - Indirect tax health check - Provision of support during audits/investigation and queries by the relevant tax authorities VAT and WHT Regularisation Services Consulting and Advisory Services Review of contracts, international structures, and cross-border arrangements to determine its VAT and WHT implications - Advice on importation/customs procedures, applicable Harmonized System Codes (HSC), taxes and levies, incentives and other need to know information on importation - Advice on the applicability and applicable excise rates. - Identification of opportunities for tax planning and savings - Provision of detailed opinion on client specific needs based on review and interpretation of the provisions of the relevant legislation/ regulations - Engaging the tax authorities with a view to obtaining a favorable ruling on specific client needs Immigration & Business Support Services - Obtaining business permit and all expatriate quota facilities Relevant entry visas and work permits - Filing of relevant statutory returns - Resolution of immigration queries - Immigration compliance audit - Country briefing services for expatriate personnel Administrative staff recruitment and management of contract personnel - Home and Office Space Rental Payroll Advisory Payroll management - Annual payroll reconciliation - Filing of employee & employer annual pay as you earn (PAYE) tax returns Filing of social security returns - Processing employees' tax clearance certificates Registration of companies for PAYE and social security purposes - Tax audit services & social security verification support - Personal income tax training services - Employee compensation structuring/ restructuring for tax efficiency. Key Contact Adewale Ajayi Partner & Head, Tax - Energy & Natural Resources and Managed Services KPMG in Nigeria T: +234 127 18934 E: [email protected] Investment in Nigeria Guide - 8th Edition 36

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