The federal government will be offering more tax incentives to Businesses in the country and individuals through the proposed Finance Bill 2020, a statement from the office of the Vice President has disclosed.
In its continued determination to cushion the socio-economic condition in the country even as the Economic Sustainability Plan (ESP) is in progress, the Buhari administration will be offering more tax incentives to Nigerians especially through the forthcoming 2020 Finance Bill.
The statement said some of the incentives include reduction in duties on tractors from 35 to 10 per cent, reduction in duties on motor vehicles for the transportation of goods from 35 to 10 per cent and another reduction of levy on motor vehicles for the transportation of persons (cars) from 35 per cent to 5 per cent.
Also, small companies will be exempted from payment of education tax under the Tertiary Education Trust fund (TETFUND)-companies with less than N25m turnover are eligible.
There will be a 50 per cent reduction in minimum tax; from 0.5 per cent to 0.25 per cent for gross turnover for financial years ending between January 1st, 2020 and December 31st, 2021.
The federal government is also planning to grant tax relief to companies that donated to the COVID-19 relief fund under the private sector coalition (CACOVID).
Briefing State House Correspondents after the Federal Executive Council (FEC) meeting in Abuja on Wednesday, the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed said the incremental changes referred to in the bill does not mean increasing taxes, but an improvement in the tax law, stressing that the country’s value added tax remains at 7.5 per cent.
According to Ahmed, “you recall that we did a Finance Bill in 2019, through these finance bills, what we are seeking to do is to make incremental changes to tax laws relating to customs excise as well as other fiscal laws, to support the implementation of annual budgets.”
The inclusion in the Finance Bill intended to grant tax relief to companies that donated to the COVID-19 relief fund is expected to serve as an acknowledgement and encouragement of such behavior.
The Finance Act 2019, which is the template for the proposed 2020 Bill, sets five strategic objectives, which include: raising government revenue through various fiscal measures, reforming domestic tax laws to align with global best practice, promoting fiscal equity by mitigating instances of regressive taxation, supporting small business entities in line with Ease of Business Reforms and introducing tax incentives for investments in infrastructure and capital market.