From Uche Usim, Abuja
The volume of Foreign Direct Investment (FDI) from Singapore to Nigeria, which stood at $908.8 million in 2015 is expected to rise remarkably, as both nations, yesterday, entered into an agreement to avoid double taxation on businesses across each other’s corridors.
Already, the balance of trade was N222 billion in favour of Nigeria while balance of trade net of petroleum export stood at N42 billion in favour of Singapore as at 2015.
While the Minister of Finance, Mrs. Kemi Adeosun, signed for Nigeria, Singapore’s Senior Minister of State for Trade and Investments, Dr. Okoh Pohkoon, signed for his country.
According to Adeosun, the agreement on avoidance of double taxation will further strengthen the business bond already existing between the two countries.
“Relationship between Nigeria and Singapore has been on the increase since 2012, culminating in the first Nigeria-Singapore Business and Investment Forum in 2013. In addition, there is a Bilateral Air Services Agreement (BASA) for cargo services, which has been operating between the two countries since 2012.
“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. It operates in a remarkably open and transparent environment, with stable prices and a per capita GDP higher than that of most developed countries,” she said.
Continuing, the Minister said: “Avoidance of double taxation agreement by the two countries spelt out taxing rights of each other in respect of different income derived from each country. It’s meant to facilitate inter-state trade, economic and business activities by ensuring that nationals or enterprises of the two states are not taxed twice on the income of profits derived from the other country; to assist prospective investors know their income tax obligation in the other country as well as available tax incentives; and to spell 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 ongoing efforts to expand its treaty network,” she added.
In his remarks, Singapore’s Senior Minister of State for Trade and Investments commended Adeosun for ensuring that the agreement stands. He noted that both countries enjoy a good relationship, adding that a lot of Singaporean businesses are thriving in Nigeria.
The negotiation for double tax avoidance agreement between Nigeria and Singapore first held in Singapore between October 28 and 30, 2013. It was later concluded in October 2014, after resolving all outstanding issues.