President Muhammadu Buhari on Monday signed the 2020 finance bill into law.
According to the President, the law alongside the 2020 Budget is aimed at reforming Nigeria’s tax system to align with global best practices, support MSMEs through the Ease of Doing Business initiative.
The law, which also hopes to raise government revenues, as well as incentivize investments in infrastructure and capital markets, has continued to generate reactions from Nigerians, especially the corporate and organised bodies.
Here are what you should know about the 2020 financial law:
1. Value Added Tax now goes up from 5% to 7.5%
2. Companies that make a turnover of less than N25m will no longer pay Company Income Tax
3. Companies that earn between N25m and N100m yearly will now pay 20% of their profits as CIT
4. Companies that make more than N100m will continue to pay 30% of their profit as CIT
5. The new law removes the tax exemption on dividends paid from the profit of oil companies.
6. Threshold on which stamp duty is to be charged on online transactions has been raised to N10,000 from 1,000.
7. Bank Transfers less than N10,000 will not be subject to stamp duty again.
8. New law may have exempted children education account from payment of stamp duty.
9. Banks will require Tax Identification Numbers for new and existing accounts.
10. Goods and services redefined to cover intangible items