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20 BASIC FOOD ITEMS, SANITARY PADS, OTHERS MAKE VAT EXEMPTION LIST

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*New Law additionally promotes budgetary disinterestedness & supports MSMES

In a bid to ensure that the amount of active does not acceleration for Nigerians because of the changes in the Value-Added Tax, several basal aliment items, locally bogus germ-free towels, pads and allegation apropos to nursery, primary, accessory and tertiary apprenticeship accept been added to the absolution account of appurtenances and casework on the VAT beneath the Finance Bill 2019, active by President Muhammadu Buhari aftermost week, on the 13th January 2020.

Amongst added benefits, the law will consolidate efforts already fabricated in creating the enabling ambiance for bigger clandestine area accord and addition to the abridgement as able-bodied as addition states’ revenues.

According to the President, “the Finance Bill will abutment the allotment and accomplishing of the 2020 Budget. We shall sustain this attitude by ensuring that consecutive budgets are additionally accompanied by a Finance Bill.”

Below are the details:

The Finance Bill, 2019 was submitted to the National Assembly by President Muhammadu Buhari alongside the 2020 Appropriation Bill, and active into law by the President on January 13, 2020.

The Bill, now an Act, has the afterward objectives:

Promoting budgetary disinterestedness by mitigating instances of astern taxation;

Reforming calm tax laws to adjust with all-around best practices;

Introducing tax incentives for investments in basement and basic markets;

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Supporting Micro, Baby and Medium-sized businesses in band with the administration’s Ease of Doing Business Reforms;

Raising Revenues for Federal, State and Local Governments.

FACTSHEET ON NEW FINANCE ACT 2019

The new Act is the aboriginal legislation created to accompany an Appropriation Act back the acknowledgment of capitalism in 1999.

The new Act raises VAT from 5% to 7.5%.

To abate fears that low-income bodies and companies will be marginalized by the new law, abate the accountability of taxation on accessible segments, and advance candid taxation, the Finance Act 2019 has continued the account of appurtenances and casework exempted from VAT. The added exemptions accommodate the following:

Basic aliment items – Additives (honey), bread, cereals, affable oils, comestible herbs, fish, abrade and starch, fruits (fresh or dried), alive or raw meat and poultry, milk, nuts, pulses, roots, salt, vegetables, baptize (natural baptize and table water)

Locally bogus germ-free towels, pads or tampons.

Services rendered by microfinance banks

Tuition apropos to nursery, primary, accessory and tertiary education.

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Nigeria’s added new VAT amount of 7.5% is still the everyman in Africa, and one of the everyman anywhere in the world. (South Africa VAT: 15%; Ghana: 12.5%; Kenya: 16%; Egypt: 14%; Rwanda: 18%; Senegal: 18%)

Under Nigeria’s acquirement administering formula, 85% of calm VAT goes to States and Local Governments. This agency that the aggregate of added VAT revenues accruing from the access will go appear enabling States and Local Governments accommodated their obligations to citizens, including the new minimum allowance as already acclaimed by State Governors. Before now, the Buhari administering had durably resisted antecedent suggestions to accession VAT.

The new Finance Act exempts Businesses with about-face beneath 25 actor from VAT payments.

Companies Income Tax (CIT)

Under the new law baby companies – companies with beneath than N25 actor in anniversary about-face are answerable Zero CIT.

CIT for Companies with revenues amid N25 and N100m (described in the Act as “medium-sized” companies) has been bargain from 30% to 20%     

Large companies – with anniversary about-face greater than N100m – will abide to pay the accepted 30% CIT

The new Act includes a accouterment that grants to all companies “engaged in agronomical production” in Nigeria “an antecedent tax-free aeon of bristles years”, renewable for an added three years.

The new Act additionally provides incentives to advance tax acquiescence through benefit reductions in CIT for aboriginal remittance:

2% benefit for medium-size companies

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1% benefit for added companies.

Personal Income Tax Act

The new Act now includes “electronic mail” as an adequate anatomy of accord for bodies against assessments by the Tax Authorities.

Contributions to Pension and Retirement Funds, Societies and Schemes are now unconditionally tax-deductible.

Stamp Assignment Act

With the new Act, the N50 Brand assignment allegation is now applicative alone to affairs amounting to N10,000 and above, a cogent access on the above beginning of N1,000.

The new Act additionally expands the account of items exempted from brand duty.

Customs and Customs Tariff

To abate arbitrary advantages ahead conferred on alien appurtenances at the amount of locally bogus ones, assertive alien appurtenances are now accountable to customs duties agnate to locally bogus goods.

Laolu Akande

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