President Muhammadu Buhari, on Monday, January 13, 2020, signed the Finance Bill into law.
The new law, among other provisions, exempts small businesses with turnover o N25 million or less from payment of company income tax. The law also increases the value-added tax (VAT) from five percent to 7.5 percent.
The president said “I am pleased to announce that this morning I signed into law the Finance Bill, 2019. We introduced the bill alongside the 2020 budget, to reform Nigeria’s tax laws to align with global best practices, support MSMEs in line with our Ease of Doing Business Reforms, incentivise investments in infrastructure and capital markets and raise government revenues.”
The Finance Law, which amends several Acts that govern such taxes as Companies Income Tax, Personal Income Tax, Value Added Tax, Petroleum Profit Tax, Stamp Duties Tax, and Capital Gains Tax, will significantly impact on small businesses.