Login

Lost your password?

Sign Up

Register

Login

Login

Lost your password?

Register

Thursday, May 19, 2022
  • Home
  • Banking
  • Industry & Trade
  • Investing
  • Money Deals
  • Regional Markets
  • Tech & Biz
  • Countries
  • Opinion

Africa's
Investment
Gateway

The Exchange
  • Login
  • Register
Subscribe
This Month's Edition
Previous Editions
  • Home
  • Banking
  • Industry & Trade
  • Investing
  • Money Deals
  • Regional Markets
  • Tech & Biz
  • Countries
  • Opinion
No Result
View All Result
The Exchange
  • Home
  • Banking
  • Industry & Trade
  • Investing
  • Money Deals
  • Regional Markets
  • Tech & Biz
  • Countries
  • Opinion
No Result
View All Result
The Exchange
LOGIN
Lagos-City

Lagos-City

Nigerian Finance Bill — Implications For Business, Investment

The Bill was signed into law by the President, Muhammadu Buhari, on January13, 2020 and will be effective from the date of same signing.

by The Exchange
February 6, 2020
in Countries
0
Share on FacebookShare on LinkedIn

The Finance Bill, among other things, proposed an increase in the Value Added Tax (VAT) rate from 5 per cent to 7.5 per cent. The additional revenue from the increase in VAT rate would be used to fund healthcare, education and infrastructure. The Government intends to mitigate the impact of the VAT rate increase by introducing a VAT exemption threshold for businesses with a turnover of less than N25 million per annum, and expanding the list of VAT-exempt items to include the following:

  1. Brown and white bread;
  2. cereals including maize, rice, wheat, millet, barley and sorghum;
  3. fish of all kinds;
  4. flour and starch meals;
  5. fruits, nuts, pulses and vegetables of various kinds;
  6. roots such as yam, cocoyam, sweet and Irish potatoes;
  7. meat and poultry products including eggs;
  8. milk;
  9. salt and herbs of various kinds; and
  10. natural water and table water.

The Bill was signed into law by the President, Muhammadu Buhari, on January13, 2020 and will be effective from the date of same signing. It is also not intended to be a ‘one-off’ document as the Nigerian government intends to amend the Finance Act annually along with each appropriation Bill; as a way to ensure that there exists a more integrated fiscal structure in governance, and more efficient planning as well.

The Bill also focuses on making such changes that concern the following:

  • Companies Income Tax: Key Amendments were made to the Act:
  • To update the provisions concerning the CIT as regards modern requirements.
  • That every company intending to open a new bank account must provide a tax identification number to the relevant bank to have the bank account created.
  • The introduction of digital tax imposed on transactions carried out via the internet or internet-enabled services.
  • The introductionof tax on technical, management, consulting, and professional services offered by an offshore company to a company domiciled in Nigeria. To ensure that Nigeria secures a fair amount of revenue from such activities. It is at the discretion of the Minister of Finance to determine where a company carries out substantial business in Nigeria.

 

  • Personal Income Tax: Key Amendments were made to the Act:
  • To introduce the provision that every person intending to open a new bank account must provide a tax identification number to the relevant bank to have the bank account created
  • Customs and Excise duties: This was only amended to include the clause ‘Goods Imported and those manufactured in Nigeria’; according to Part 111, Section 21 of the Customs and Excise Tariff Consolidation Act.

This amendment indicates that the Nigerian government intends to impose excise duties on goods that are imported if the same goods are already produced locally. This is to serve as a deterrent for traders who opted to import goods as a way to avoid the levy of excise on same goods if they were produced locally. It would also encourage the local manufacturing industries.

–        Capital Gains Tax: Changes made are essentially grammatical corrections.

–        Stamp Duty: Changes made are essentially grammatical and others relatedto the definition section of the Act.

Also, the Bill includes an amendment to the First Schedule, by including ‘locally manufactured sanitary towels, tampons or pads’ under the list of VAT-exempted items in the VAT Act.

In general, it is impressive that the National Assembly has taken the initiative to update some tax laws in Nigeria. This will go a long way in boosting investor confidence and reduce issues around multiple taxations.

In all, the increase in VAT, which is the most impactful issue, will affect all consumer goods and services, except those listed above.An increase of VAT on these products from 5 per cent to 7.5 per cent is a burden that will be borne by the end-user but may also affect consumer/buyer attitude in the long run.

It is advised that businesses and intending investors consider taking a strategic approach to confronting this challenge, as a drastic increase in price may hurt their company’s customer base, and a drop in price may hurt the company’s profit margins.

Also, businesses and investors, particularly manufacturers, must intensify engagements with the Nigerian government to focus more on providing the necessary solutions to ease manufacturing and reducing the cost of production and distribution. This would create a wider band within which companies can vary the prices of their goods and compete effectively.

IkechukwuIbeawuchi, BL., LL.M

Business, Regulatory and Public Policy Analyst,

ACIOE Associates, Nigeria.

[email protected]

 

Tags: Investing in NigeriaNigeria's economyNigerian Finance BillNigerian presidentpremium

STATE OF ECONOMY - GET THE REPORT

ASSESSING EAST AFRICA

Loading...

The Exchange

- We provide economic news and analysis on the investment arena in Africa, with a particular interest in doing business. Our key areas of focus include banking, capital markets, energy, mining, manufacturing and industrial development.

Related Posts

www.theexchange.afrcia
Countries

Eyes on trade: Kenya seeking to deepen bilateral relationship with United Arab Emirates

May 11, 2022
Growth in employment earmarks Kenya's post-pandemic economic recovery. www.theexchange.africa
Countries

Growth in employment earmarks Kenya’s post-pandemic economic recovery

May 11, 2022
Zimbabwe: Mnangagwa's freeze on bank lending to save currency value. www.theexchange.africa
Countries

Zimbabwe: Mnangagwa’s freeze on bank lending to save currency value

May 10, 2022
Next Post
Cocoa Beans and Cocoa Powder with Chocolate Bars on Wood Table www.theexchange.africa

West Africa’s cocoa coup and what it could mean for the continent

Education in Tanzania. Source-theirworld:  
 Exchange

Education loan power-play: What next for Tanzania and World Bank?

President Uhuru Kenyatta. www.theexchange.africa

Will events in Kenya, Uganda and Tanzania, bring financial and political freedom this decade?




This months edition

May Edition

Features

EdTech role in African development
Tech & Business

EdTech’s role in African development

by Kanyali Muthui
May 16, 2022
0

Due to the pandemic, the topic of innovation in education has never been more crucial.  While most developed countries moved...

Read more
investment in African science and technology
Tech & Business

Investing in Africa’s science and technology: Where are we now?

by Kanyali Muthui
May 16, 2022
0

The continent’s digital revolution can largely be driven by building the necessary skills for the short- and long-term future, and...

Read more
Fintech revolution in Africa
Tech & Business

The Fintech Revolution in Africa’s FX Markets

by Kanyali Muthui
May 11, 2022
0

With over 548 million registered mobile money users in sub-Saharan Africa, increased internet access and readily available mobile money solutions,...

Read more
www.theexchange.africa
Countries

US – Nigeria Trade Relations: An Overview

by Wanjiku Njugunah
May 2, 2022
0

Nigeria is currently the United States' 54th largest goods trading partner, with US$7.8 billion in total goods trade as of...

Read more
A previous conference for African Insurtech sector. The Insurtech boom is deepening insurance uptake in Africa. www.theexchange.africa
Tech & Business

Insurtech boom deepening the uptake of insurance in Africa

by june njoroge
May 2, 2022
0

Kenya-based Pula is another distinguished insurtech making waves in the continent. It provides small scale farmers with agricultural insurance and...

Read more

News

Banking
Industry & Trade
Investing
Money Deals
Regional Markets
Tech & Biz
Opinion

Countries

Kenya
Tanzania
Uganda
Burundi
Rwanda
Southern Africa
Ethiopia

More

My Account
Contact us
Advertise
About us
Help Center

Subscribers Center

E-paper
Premium Stories
Education Rates
Corporate Subscriptions
Weekely Newsletter

  • My account
  • About us
  • Advertise
  • Contact
  • Privacy Policy
  • Refund Policy – The Exchange
  • Sitemap

No Result
View All Result
  • Home
  • Banking
  • Industry & Trade
  • Investing
  • Money Deals
  • Regional Markets
  • Tech & Biz
  • Countries
  • Opinion
  • Login
  • Sign Up
  • Cart

© 2021 The Exchange - Powered by MediapixManaged by Supported by Digihandler,

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In