Legal Recap for the Year 2021

2021 was an incredibly busy and exciting year in the Nigerian legal and regulatory landscape. There were major and far-reaching changes in the legal and regulatory frameworks relating to Oil and Gas, FinTech, Banking and Finance, etc. There were also some very brave and landmark judicial pronouncements by the Nigerian judiciary. In this article, we have highlighted some of the major legal, regulatory and judicial changes that occurred in 2021. This article is divided into four parts. In each quarter, we shall deal with all the major legal changes that occurred therein.


1st Quarter (January – March 2021)


In what can only be described as heavy regulatory activities, the first quarter witnessed a buzz of actions by the regulators especially relating to Capital Markets, FinTechs, Taxation, Finance, etc.

  • Companies Regulations 2021: Following the passing of the Companies and Allied Matters Act (CAMA) 2020, which revolutionized company registrations, ownerships and regulations in Nigeria, the Corporate Affairs Commission (CAC) issued the Companies Regulations 2021. The Regulations provide clarifications on some of the seemingly confusing provisions of CAMA 2020 such as the qualifications of a small company, allotment of shares, electronic meeting of directors, etc. Company owners in Nigeria now have some clarity as to some parts of CAMA 2020, which prior to the issuance for the Regulations were subject of several conflicting interpretations.
  • The Central Bank of Nigeria (CBN) Regulatory Framework for Open Banking in Nigeria. In the first quarter, the CBN issued the framework for the principles for sharing of customers’ data with third party firms to build solutions and services that provide efficiency and enhance access to financial services in Nigeria. The framework has provided for the rules governing the sharing of customers’ data and the use of Application Programming Interface (API) to access customers’ data. Prior to this, there were no rules guiding this very important part of customer interface.
  • The Securities and Exchange Commission (SEC) Guidance on the Implementation of Section 60 – 63 0f the Investment and Securities Act 2007. This provides guidance to public companies on corporate financial reporting, the role of the Chief Executive Officer and Chief Financial Officer and the role of the auditor of public companies on corporate financial reporting and the need for public companies to establish a system of internal control over its financial reporting. It also provides that only public accounting firm registered with SEC can prepare or issue audit report in respect of any public company. With the issuance of the Guidance, it now mandates directors to have common procedures for the evaluation of Internal Controls over Financial Reporting (ICFR) such that any other reasonably knowledgeable person can re-perform the same procedures and arrive at the same conclusion.
  • SEC also announced the re-introduction of periodic registration for Capital Market Operators (CMOs). The essence of the re-introduction according to SEC is to obtain updated information on operators in the Nigerian Capital Market, strengthen supervision and monitoring of CMOs and reduce the incidences of unethical practices by CMOs.
  • The Finance Act 2020. This was passed into law on 31 December 2020 but took effect on 1 January 2021 and represented a major shift in the tax regulations in Nigeria. The Act introduced the concept of Significant Economic Presence (SEP) for Personal Income Tax. It also exempts small companies (defined as companies with annual turnover of less than N25 Million) from payment of Tertiary Education Tax. It further excludes land, buildings, money and securities from the definition of goods and services for the purpose of Value Added Tax (VAT), etc.
  • CBN Framework for Regulatory Sandbox Operations. In an attempt to drive innovation and create certainty especially in FinTech, the CBN introduced the Framework. This provides for the conduct of live tests on innovative products, services and other solutions in a controlled environment. It is open to both existing CBN licensees (FinTech and other institutions which may include financial sector companies as well as technology and telecom companies intending to test innovative payments product or services). Prior to this, there were no avenues for innovative products to be tested before being offered to the public.
  • CBN Framework for Quick Response (QR) Code Payments in Nigeria. The framework is to regulate the use of QR Codes in making payments in Nigeria through the provision of guidance and standards for its use. It stipulates the acceptable QR Code specifications and the obligations of participants. It is expected to further promote electronic payments in Nigeria.

2nd Quarter (April – June 2021)


The second quarter was somewhat quiet. However, the CBN, among other regulators, issued the licensing requirements for players in the payment services system which raised the capital requirements for some license categories in the payments system space. A new Tax Appeal Rule was also made to guide tax appeals before the Tax Appeal Tribunal.


  • CBN New License Requirements Payments System. These requirements now include mobile money operators, switching and processing providers, payment solution services providers, payment terminal service providers, payment solution service providers and super-agents. It stipulates the capital requirements and the need to make escrow deposits for the various players in the payments space.
  • SEC’s Regulatory Incubator (RI) Guidelines. These Guidelines were specifically developed for FinTechs operating or seeking to operate in the Nigerian Capital Market and for FinTechs who consider that there are no specific regulations governing their business models or who require clarity on the appropriate regulatory regime that would apply to their business. The RI is however, yet to be operational and shall be operational once the SEC calls for FinTechs to submit their applications.
  • SEC’s Framework on the Interoperability and Financial Market Infrastructure (FMI). This Framework is now linked among Central Securities Depositories (CSDs) with the aim of protecting investors while ensuring the efficiency of the capital market. It provides the requirements for interoperability and the clauses that must be included in any interoperability agreement.
  • Tax Appeal Tribunal (Procedure) Rules, 2021. The Procedure Rules were issued by the Minister of Finance. It repealed the Tax Appeal Tribunal (Procedure) Rules, 2010. It contains innovative provisions such as the power of the tribunal to make an order for joinder, power to grant default judgement, summary appeal procedure, etc. It also aims to solve the problem of delays in prosecuting tax appeals.

3rd Quarter (July – September 2021)


In the third quarter, there seems to have been a resurgence of activities. This quarter saw the enactment of the Petroleum Industry Act 2021 (PIA) and a judicial decision which seems to completely change the VAT collections mechanism in Nigeria.


  • CBN’s Guidelines for Licensing and Regulation of Payments Service Holding Companies in Nigeria. The CBN issues these Guidelines, which requires any payment system company desirous of operating more than one license category i.e. mobile money operations, switching and processing and payment solution services, to set up a Payment Service Holding Company (PSHC) and clearly delineate the activities of its subsidiaries.
  • CBN Regulatory Framework and Guidelines for Mobile Money Services (MMS) in Nigeria. The Framework and Guidelines list institutions that are prohibited from providing MMS and the requirements for Mobile Money Operators. It also, among other things, defines permissible and non-permissible activities for Mobile Money Operators.
  • CBN Regulatory Framework for Non-Bank Acquiring in Nigeria. The CBN issued the Framework which sets out the roles of non-bank acquirers as well as that of other participants in non-bank acquiring. It aims to promote electronic payment and also mandates non-bank acquirers to have and implement policies that include minimum standards set by the payment schemes.
  • A.G Rivers v. FIRS. This was a decision of the Federal High Court (FHC) in Rivers State, following a dispute between the federal government and the Rivers State Government on the collection of VAT. In an unprecedented and very bold decision, the FHC held that the Federal Inland Revenue Service (FIRS) (a federal agency) does not have the powers to collect VAT in Nigeria. Although the federal government has appealed this decision, if upheld on appeal, it is bound to completely change the VAT regime in Nigeria and affect the revenue of the federal government. Following the decision, some state governments enacted their own VAT laws setting VAT at 6% thus further alienating the federal government from the VAT revenue.
  • The Value Added Tax (Modification) Order, 2021 was issued by the Minister of Finance which modifies and expands the list of exempted goods and services in the First Schedule to the Value Added Tax Act. Items such as petroleum products, renewable energy equipment, agricultural seeds and seedlings, raw materials for the production of pharmaceutical products, etc. are now exempt from VAT by virtue of the Order.
  • Petroleum Industry Act 2021 (PIA). The big news in this quarter was no doubt the signing into law of the PIA by the Nigerian president. The PIA as a draft had lingered on at the Nigerian parliament for more than 20 years. This is a ground-breaking piece of legislation which provides for the winding up of the Nigerian national oil company the Nigerian National Petroleum Corporation (NNPC). In its place, a new company known as the Nigerian National Petroleum Company Ltd was set up. The Act is seen as a game changer for the petroleum industry. There are now separate authorities regulating the upstream, midstream and downstream sectors of the oil industry thereby bringing an end to the Department of Petroleum Resources (DPR), Petroleum Products Pricing Regulatory Agency (PPRA) and Petroleum Equalisation Fund (PEF). For the first time the PIA specifically sets up a fund for the host communities and targets gas flaring.
  • The Copyright Repeal and Re-enactment Bill 2021 is currently before the National Assembly. The Bill seeks to repeal the operating Copyright Act 1988 and introduce salient innovative provisions into the Nigerian copyright regime in the light of technological advancement. The Bill has passed second reading and the jury is out as to what becomes of the Bill in coming days
  • It was reported that Nigeria attracted over $8.99 billion investment in the third quarter of 2021. This represents a growth of 130% when compared with the $3.95 billion that was attained in the third quarter of 2020. This was announced by Nigerian Investment Promotion Commission’s (NIPC) Director of Strategic Services.

4th Quarter (October – December 2021)


In the fourth quarter, the eNaira which is a digital currency developed by the CBN to complement the Naira notes was introduced. Various Bills were also passed into law by both the Federal and State Governments. Tax matters were also prominent in the last quarter of 2021. The FIRS also issued guidelines which aim to expand the tax net to non-resident suppliers of goods and services in the coming years. The Finance Bill 2021 is presently before the National Assembly and when passed, it will introduce further significant changes to some tax and regulatory regimes in Nigeria.


  • Regulatory Guidelines on the eNaira. This Guideline was released by the CBN to regulate the use of the eNaira, which is a digital currency unveiled by the president. The regulation provides for various eNaira wallets for the use of CBN, Financial Institutions (FIs), merchants and end users. The eNaira is administered by the CBN and the guidelines apply to all financial institutions and all users of the eNaira.
  • The Climate Change Act. The Climate Change Act among other things seeks to project a net zero emission deadline plan for Nigeria. It provides the legal framework for the achievement of Nigeria’s long-term climate goals, national climate resilience, adequate climate finance and the role of business and civil societies in achieving the long-term climate objectives.
    Asset Management Corporation of Nigeria (Amendment) Act. This Act amends the 2019 AMCON Act and provides clarity on the 2019 Act and also enhance AMCON’s power in debt recovery.
  • MultiChoice Nigeria Limited v. FIRS. in this long running case, FIRS had issued a tax audit assessment N1.8 trillion to MultiChoice after the forensic audit of its records which was challenged by MultiChoice by filing an appeal with the TAT. FIRS urged the TAT to mandate Multichoice to deposit 50 percent (N900 billion) of the disputed amount with it. MultiChoice challenged it and the TAT ruled in its favour which ordered it to make a cost deposit of 8 billion Naira.
  • The Federal High Court, Abuja made an order to allow the unfreezing of the bank accounts of Rise Vest. The court held that the CBN cannot rely on a circular to freeze the bank account of a company. The CBN has sought to rely on a circular it issued to commercial banks to provide information on items not valid for foreign currency The court held that circulars giving directives by a regulator are not law and as such, the CBN cannot rely on a circular to freeze the bank account of a company.
  • Guidelines on Simplified Compliance Regime for Value Added Tax (VAT) for Non-Resident Suppliers. The FIRS issued the Guidelines which mandate Non-Resident Suppliers who, within a period of 12 consecutive months immediately preceding the commencement of the Guidelines or any 12 consecutive months thereafter, has made or expects to make a single or series of supplies to Nigeria which amounts to an aggregate of $25,000 (Twenty Five Thousand US Dollars) or its equivalent in other currencies to register for VATS and obtain a Tax Identification Number (TIN) from FIRS. Non-Resident Suppliers supply taxable goods, services, digital products or intangibles to Nigerian customers through digital or electronic platform or means or intermediaries. The Guidelines will come into effect from 1 January 2022 with respect to supply of services and intangibles and 1 January 2024 for goods.
  • The Finance Bill 2021: The Bill seeks to introduce significant changes to various tax and regulatory laws in Nigeria. It is presently before the National Assembly. Some of the laws which the Bill seeks to amend include Companies and Income Tax Act, Capital Gains Tax Act, Personal Income Tax Act, Stamp Duties Act, Petroleum Profit Tax Act, etc. The key changes the Bill seeks to make include the taxation of gaming revenue of a lottery and gaming business under the Companies Income Tax Act, taxation of foreign companies providing digital services in Nigeria such as e-commerce and online adverts, exclusion of companies with pioneer status incentives or other gas utilization incentives under any law in Nigeria from enjoying the gas utilization incentive under the Companies Income Tax Act, recognition of FIRS as the primary agency of the Federal Government for the purposes of assessment, accounting for, collection and administration of taxes and levies due to the Federal Government, etc.


Despite the economic challenges, 2021 was a very busy year for both the legislatures and regulators in Nigeria. The regulators issued guidelines and oversight regulations on various sectors such as FinTech, Banking and Finance, Capital Markets, etc. Various laws were passed and some very far-reaching judicial decisions were made.

The Finance Act 2020 took effect in the first quarter of 2021 and introduce the concept of significant economic presence and the exclusion of certain items such as land, buildings, securities, etc. from value added tax.

In Q2, new license requirements were issued for operators in the payments system which effectively increased the capital requirements for some license categories. The Tax Appeal Tribunal (Procedure) Rules 2021 was issued to guide the affairs of TAT in tax appeal matters. It introduced innovative provisions to tax appeals such as electronic filing and service, summary appeal, etc.

In Q3, we saw some of the regulations and guidelines aim to regulate and provide guidance to operators in the payment systems, the need for a payment service holding company, regulation of mobile money operators, etc.

The long-awaited Petroleum Industry Act 2021 (PIA) was also passed into law. It is a game-changing legislation for the petroleum industry. The decision of the Federal High Court on the VAT dispute between the federal government and Rivers State Government was a brave and unprecedented decision and could completely change the VAT regime in Nigeria.

In Q4, the Central Bank Digital Currency (eNaira) was unveiled and guidelines were issued by the CBN to regulate its use. In an attempt to expand the tax net, guidelines for the taxation of non-resident suppliers were issued by the FIRS to tax non-resident suppliers of goods and services who have made a single or series of supply within a consecutive period of 12 months. The Finance Bill currently before parliament also aims to introduce significant changes to some tax laws in the country. The lottery and gaming sector is now expected to pay taxes when the Finance Bill is eventually passed into law.


Read the original publication at Goldsmiths Solicitors

Subscribe to our newsletter